AN ACT RELATING TO COURTS AND CIVIL PROCEDURE -- PROCEDURE GENERALLY -- LITIGATION LENDING AGREEMENTS

This bill proposes to apply Rhode Island's existing state usury laws to litigation lending agreements, which are contracts where third parties provide money to people involved in lawsuits in exchange for repayment from the lawsuit's settlement or judgment. By reclassifying these financial arrangements as loans, the legislation aims to cap the effective interest rates charged to litigants, preventing them from paying rates that often exceed 100% annually. The measure specifically targets the total amount a litigant must repay compared to what they received, regardless of how the contract labels the fees or whether the repayment depends on winning the case. If passed, this change would directly affect companies that fund legal cases and the individuals who sign agreements with them, ensuring such deals comply with standard state lending regulations.