|
|
| To enact section 1349.55 of the Revised Code to set | 1 |
| forth requirements governing non-recourse civil | 2 |
| litigation advance contracts. | 3 |
| Section 1. That section 1349.55 of the Revised Code be | 4 |
| enacted to read as follows: | 5 |
| Sec. 1349.55. (A) As used in this section: | 6 |
| (1) "Non-recourse civil litigation advance" means a | 7 |
| transaction in which a company makes a cash payment to a consumer | 8 |
| who has a pending civil claim or action in exchange for the right | 9 |
| to receive an amount out of the proceeds of any realized | 10 |
| settlement, judgment, award, or verdict the consumer may receive | 11 |
| in the civil lawsuit. | 12 |
| (2) "Company" means a person or entity that enters into a | 13 |
| non-recourse civil litigation advance transaction with a consumer. | 14 |
| (3) "Consumer" means a person or entity residing or domiciled | 15 |
| in Ohio and represented by an attorney with a pending civil claim | 16 |
| or action. | 17 |
| (B) All contracts for a non-recourse civil litigation advance | 18 |
| shall comply with the following requirements: | 19 |
| (1) The contract shall be completely filled in and contain on | 20 |
| the front page appropriately headed and in at least twelve-point | 21 |
| bold type, the following disclosures: | 22 |
| (a) The total dollar amount to be advanced to the consumer; | 23 |
| (b) An itemization of one-time fees; | 24 |
| (c) The total dollar amount to be repaid by the consumer, in | 25 |
| six-month intervals for thirty-six months, and including all fees | 26 |
| as well as any minimum monthly required payment amount; | 27 |
| (d) The annual percentage rate of return, calculated as of | 28 |
| the last day of each six-month interval, including frequency of | 29 |
| compounding. | 30 |
| (2) The contract shall provide that the consumer may cancel | 31 |
| the contract within five business days following the consumer's | 32 |
| receipt of funds, without penalty or further obligation. The | 33 |
| contract shall contain the following notice written in a clear and | 34 |
| conspicuous manner: "CONSUMER'S RIGHT TO CANCELLATION: YOU MAY | 35 |
| CANCEL THIS CONTRACT WITHOUT PENALTY OR FURTHER OBLIGATION WITHIN | 36 |
| FIVE BUSINESS DAYS FROM THE DATE YOU RECEIVE FUNDING FROM [insert | 37 |
| name of company]." The contract also shall specify that in order | 38 |
| for the cancellation to be effective, the consumer must either | 39 |
| return to the company the full amount of disbursed funds by | 40 |
| delivering the company's uncashed check to the company's offices | 41 |
| in person, within five business days of the disbursement of funds, | 42 |
| or mail a notice of cancellation and include in that mailing a | 43 |
| return of the full amount of disbursed funds in the form of the | 44 |
| company's check, or a registered or certified check or money | 45 |
| order, by insured, registered or certified United States mail, | 46 |
| postmarked within five business days of receiving funds from the | 47 |
| company, at the address specified in the contract for such | 48 |
| cancellation. | 49 |
| (3) The contract shall contain the following statement in at | 50 |
| least twelve-point boldface type: "THE COMPANY AGREES THAT IT | 51 |
| SHALL HAVE NO RIGHT TO AND WILL NOT MAKE ANY DECISIONS WITH | 52 |
| RESPECT TO THE CONDUCT OF THE UNDERLYING CIVIL ACTION OR CLAIM OR | 53 |
| ANY SETTLEMENT OR RESOLUTION THEREOF AND THAT THE RIGHT TO MAKE | 54 |
| SUCH DECISIONS REMAIN SOLELY WITH THE CONSUMER AND THE CONSUMER'S | 55 |
| ATTORNEY." | 56 |
| (4) The contract shall contain the initials of the consumer | 57 |
| on each page. | 58 |
| (5) The contract shall contain the following statement in at | 59 |
| least twelve-point boldface type located immediately above the | 60 |
| place on the contract where the consumer's signature is required: | 61 |
| "DO NOT SIGN THIS CONTRACT BEFORE YOU READ IT COMPLETELY OR IF IT | 62 |
| CONTAINS ANY BLANK SPACES. BEFORE YOU SIGN THIS CONTRACT YOU | 63 |
| SHOULD OBTAIN THE ADVICE OF YOUR ATTORNEY. YOU ARE ENTITLED TO A | 64 |
| COMPLETELY FILLED IN COPY OF THIS CONTRACT." | 65 |
| (6) The contract shall contain a written acknowledgment by an | 66 |
| attorney that states all of the following: | 67 |
| (a) The attorney has reviewed the contract and all costs and | 68 |
| fees have been disclosed including the annualized rate of return | 69 |
| applied to calculate the amount to be paid by the consumer. | 70 |
| (b) The attorney is being paid on a contingency basis per a | 71 |
| written fee agreement. | 72 |
| (c) All proceeds of the civil litigation will be disbursed | 73 |
| via the attorney's trust account. | 74 |
| (d) The attorney is following the written instructions of the | 75 |
| consumer with regard to the non-recourse civil litigation advance. | 76 |
| (7) For English, French, and Spanish speaking consumers, the | 77 |
| contract shall be written in the same language in which the oral | 78 |
| negotiations are conducted between the company and the consumer. | 79 |
| For consumers whose primary language is neither English, French, | 80 |
| nor Spanish, the principal terms of the contract shall be | 81 |
| translated in writing into the consumer's native language, the | 82 |
| consumer shall sign the translated document containing the | 83 |
| principal terms and initial each page, and the translator shall | 84 |
| sign a notarized affirmation confirming that the principal terms | 85 |
| have been presented to the consumer in the consumer's native | 86 |
| language and acknowledged by the consumer, in writing. Principal | 87 |
| terms shall include all items that must be disclosed by this | 88 |
| section. | 89 |
| (8) To the extent the contract provides for the company to | 90 |
| pay the consumer's attorney's fees and costs, in addition to any | 91 |
| amount due and owing under the contract, the contract shall | 92 |
| provide, in the case of a breach of the contract by either party, | 93 |
| that reasonable attorney's fees and costs may be recoverable by | 94 |
| the other party. Any contractual cap on such attorney's fees and | 95 |
| costs shall apply equally to both parties. | 96 |