HOUSE BILL No. 1206
DIGEST OF INTRODUCED BILL
Citations Affected: IC 24-11.
Synopsis: Third party lawsuit lending. Prohibits a loan to a plaintiff in
an action in exchange for the contingent right to receive a part of the
potential proceeds of the action.
Effective: July 1, 2012.
Culver, Foley, Steuerwald
January 9, 2012, read first time and referred to Committee on Judiciary.
Second Regular Session 117th General Assembly (2012)
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HOUSE BILL No. 1206
A BILL FOR AN ACT to amend the Indiana Code concerning trade
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 24-11; (12)IN1206.1.1. -->
SECTION 1. IC 24-11 IS ADDED TO THE INDIANA CODE AS
ARTICLE TO READ AS FOLLOWS [EFFECTIVE JULY 1,
ARTICLE 11. PROHIBITED LEGAL FUNDING
Chapter 1. Definitions
Sec. 1. (a) As used in this article, "legal action" means:
(1) a bona fide civil action or statutory claim in which
damages may be awarded; or
(2) a cause of action or legal claim upon which a civil action
or statutory claim described in subdivision (1) may be based.
(b) The term includes:
(1) any settlement or negotiations toward settlement of a civil
action described in subsection (a)(1); or
(2) any agreement or negotiations toward an agreement under
which a civil action based upon a cause of action described in
subsection (a)(2) would not be initiated.
Sec. 2. As used in this article, "legal funding transaction" means
a transaction in which:
(1) a lender provides legal funding to another person; and
(2) the person receiving the legal funding assigns to the lender
the contingent right to receive a part of the proceeds of the
settlement, insurance payment, or award of damages obtained
in the person's legal action.
Sec. 3. As used in this article, "lender" means a person or entity
that enters into a legal funding transaction with a person.
Sec. 4. As used in this article, "person" means an individual, a
partnership, a corporation, a limited liability company, or another
Chapter 2. Legal Funding
Sec. 1. (a) A lender may not enter into a legal funding
transaction with another person.
(b) A legal funding contract entered into in violation of this
section is void.
Sec. 2. (a) A violation of this chapter is a deceptive act that is
actionable by the attorney general.
(b) The attorney general may bring an action under this article
to obtain any or all of the following:
(1) An injunction to enjoin future violations of this chapter.
(2) A civil penalty of not more than ten thousand dollars
($10,000) per deceptive act.
(3) The attorney general's reasonable costs in:
(A) the investigation of the deceptive act; and
(B) maintaining the action.