Missouri SB 484: Establishes the Litigation Financing Consumer Protection Act

Bill Text

FIRST REGULAR SESSION
SENATE BILL NO. 484
100TH GENERAL ASSEMBLY
INTRODUCED BY SENATOR HOSKINS.
Read 1st time February 28, 2019, and ordered printed.
ADRIANE D. CROUSE, Secretary.
2371S.01I
AN ACT
To amend chapter 408, RSMo, by adding thereto eight new sections relating to the
litigation financing consumer protection act.
Be it enacted by the General Assembly of the State of Missouri, as follows:
Section A. Chapter 408, RSMo, is amended by adding thereto eight new
2 sections, to be known as sections 408.900, 408.902, 408.904, 408.906, 408.908,
3 408.910, 408.912, and 408.914, to read as follows:
408.900. 1. The provisions of sections 408.900 to 408.914 shall be
2 known and may be cited as the "Litigation Financing Consumer
3 Protection Act".
4 2. As used in sections 408.900 to 408.914, the following terms
5 mean:
6 (1) "Consumer", any natural person who resides, is present, or is
7 domiciled in this state, or who is or may become a plaintiff or
8 complainant in a dispute in this state;
9 (2) "Litigation financier", a person, entity, or partnership
10 engaged in the business of litigation financing;
11 (3) "Litigation financing" or "litigation financing transaction", a
12 non-recourse transaction in which financing is provided to a consumer
13 in return for a consumer assigning to the litigation financier a
14 contingent right to receive an amount of the potential proceeds of the
15 consumer's judgment, award, settlement, or verdict obtained with
16 respect to the consumer's legal claim.
408.902. 1. (1) No litigation financier shall engage in a litigation
2 financing transaction in this state unless it is registered as a litigation
3 financier in this state.
4 (2) A litigation financier that is a business entity or a

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5 partnership is registered in this state if:
6 (a) It is in compliance with the bond requirements of subsection
7 2 of this section;
8 (b) It has a status of active and in good standing as reflected in
9 the records of the secretary of state; and
10 (c) Its charter, articles of organization, certificate of limited
11 partnership, or other organizational document, or, if a foreign entity,
12 its Missouri application for a certificate of authority contains a
13 statement that it shall be designated as a litigation financier under
14 sections 408.900 to 408.914.
15 (3) A litigation financier that is not a business entity or a
16 partnership is registered in this state if:
17 (a) It is in compliance with the bond requirements of subsection
18 2 of this section; and
19 (b) It files an application for registration as a litigation financier
20 on a form prescribed by the division of finance, along with a filing fee
21 of one hundred dollars, that contains the following:
22 a. The applicant's full legal name;
23 b. The business name of the applicant, if any;
24 c. The physical street address and mailing address of the
25 applicant;
26 d. A telephone number through which the applicant can be
27 reached;
28 e. The name, physical street address, mailing address, and
29 telephone number for a Missouri registered agent appointed to accept
30 service of process on behalf of the applicant;
31 f. A statement that the applicant shall be designated as a
32 litigation financier under this section; and
33 g. Any other information the division of finance deems
34 necessary.
35 2. (1) Each litigation financier shall file and have approved by
36 the division of finance a surety bond in the amount of fifty thousand
37 dollars.
38 (2) Such bond shall be payable to this state for the use of the
39 attorney general and any person who may have a cause of action
40 against the obligor of the bond for any violation of sections 408.900 to
41 408.914. The bond shall continue in effect so long as a litigation

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42 financier is designated as a litigation financier in the records of the
43 division of finance.
44 3. A litigation financier shall amend its registration with the
45 division of finance within thirty days whenever the information
46 contained in such record changes or becomes inaccurate or incomplete
47 in any respect. A litigation financier that is not a business entity or
48 partnership may amend its registration with the division of finance by
49 filing an amendment on a form prescribed by the division of finance,
50 along with a filing fee of twenty dollars.
51 4. All documents filed under this section are public record, as
52 such term is defined in section 610.010.
53 5. The division of finance shall collect a fee of twenty dollars for
54 copying all filed documents under sections 408.900 to 408.914. All such
55 copies shall be certified or validated by the division of finance.
56 6. The division of finance, as appropriate, may promulgate rules
57 in implementing sections 408.900 to 408.914 including, but not limited
58 to, the adoption of fees to cover any administrative costs relating to
59 administering sections 408.900 to 408.914. Any rule or portion of a rule,
60 as that term is defined i