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| 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 |
| (d) The annual percentage rate of return, calculated as of | 27 |
| the last day of each six-month interval, including frequency of | 28 |
| compounding. | 29 |
| (2) The contract shall provide that the consumer may cancel | 30 |
| the contract within five business days following the consumer's | 31 |
| receipt of funds, without penalty or further obligation. The | 32 |
| contract shall contain the following notice written in a clear and | 33 |
| conspicuous manner: "CONSUMER'S RIGHT TO CANCELLATION: YOU MAY | 34 |
| CANCEL THIS CONTRACT WITHOUT PENALTY OR FURTHER OBLIGATION WITHIN | 35 |
| FIVE BUSINESS DAYS FROM THE DATE YOU RECEIVE FUNDING FROM [insert | 36 |
| name of company]." The contract also shall specify that in order | 37 |
| for the cancellation to be effective, the consumer must either | 38 |
| return to the company the full amount of disbursed funds by | 39 |
| delivering the company's uncashed check to the company's offices | 40 |
| in person, within five business days of the disbursement of funds, | 41 |
| or mail a notice of cancellation and include in that mailing a | 42 |
| return of the full amount of disbursed funds in the form of the | 43 |
| company's uncashed check, or a registered or certified check or | 44 |
| money order, by insured, registered or certified United States | 45 |
| mail, postmarked within five business days of receiving funds | 46 |
| from the company, at the address specified in the contract for | 47 |
| the cancellation. | 48 |
| (3) The contract shall contain the following statement in at | 49 |
| least twelve-point boldface type: "THE COMPANY AGREES THAT IT | 50 |
| SHALL HAVE NO RIGHT TO AND WILL NOT MAKE ANY DECISIONS WITH | 51 |
| RESPECT TO THE CONDUCT OF THE UNDERLYING CIVIL ACTION OR CLAIM OR | 52 |
| ANY SETTLEMENT OR RESOLUTION THEREOF AND THAT THE RIGHT TO MAKE | 53 |
| THOSE DECISIONS REMAINS SOLELY WITH YOU AND YOUR ATTORNEY IN THE | 54 |
| CIVIL ACTION OR CLAIM." | 55 |
| (4) The contract shall contain the initials of the consumer | 56 |
| on each page. | 57 |
| (5) The contract shall contain the following statement in at | 58 |
| least twelve-point boldface type located immediately above the | 59 |
| place on the contract where the consumer's signature is required: | 60 |
| "DO NOT SIGN THIS CONTRACT BEFORE YOU READ IT COMPLETELY OR IF IT | 61 |
| CONTAINS ANY BLANK SPACES. YOU ARE ENTITLED TO A COMPLETELY | 62 |
| FILLED IN COPY OF THIS CONTRACT. BEFORE YOU SIGN THIS CONTRACT YOU | 63 |
| SHOULD OBTAIN THE ADVICE OF AN ATTORNEY. DEPENDING ON THE | 64 |
| CIRCUMSTANCES, YOU MAY WANT TO CONSULT A TAX, PUBLIC OR PRIVATE | 65 |
| BENEFIT PLANNING, OR FINANCIAL PROFESSIONAL. YOU ACKNOWLEDGE THAT | 66 |
| YOUR ATTORNEY IN THE CIVIL ACTION OR CLAIM HAS PROVIDED NO TAX, | 67 |
| PUBLIC OR PRIVATE BENEFIT PLANNING, OR FINANCIAL ADVICE REGARDING | 68 |
| THIS TRANSACTION." | 69 |
| (6) The contract shall contain a written acknowledgment by | 70 |
| the attorney representing the consumer in the civil action or | 71 |
| claim that states all of the following: | 72 |
| (a) The attorney representing the consumer in the civil | 73 |
| action or claim has reviewed the contract and all costs and fees | 74 |
| have been disclosed including the annualized rate of return | 75 |
| applied to calculate the amount to be paid by the consumer. | 76 |
| (b) The attorney representing the consumer in the civil | 77 |
| action or claim is being paid on a contingency basis per a | 78 |
| written fee agreement. | 79 |
| (c) All proceeds of the civil litigation will be disbursed | 80 |
| via the trust account of the attorney representing the consumer in | 81 |
| the civil action or claim or a settlement fund established to | 82 |
| receive the proceeds of the civil litigation from the defendant on | 83 |
| behalf of the consumer. | 84 |
| (d) The attorney representing the consumer in the civil | 85 |
| action or claim is following the written instructions of the | 86 |
| consumer with regard to the non-recourse civil litigation advance. | 87 |
| (7) For English, French, and Spanish speaking consumers, the | 88 |
| contract shall be written in the same language in which the oral | 89 |
| negotiations are conducted between the company and the consumer. | 90 |
| For consumers whose primary language is not English, French, or | 91 |
| Spanish, the principal terms of the contract shall be translated | 92 |
| in writing into the consumer's native language, the consumer | 93 |
| shall sign the translated document containing the principal terms | 94 |
| and initial each page, and the translator shall sign a notarized | 95 |
| affirmation confirming that the principal terms have been | 96 |
| presented to the consumer in the consumer's native language and | 97 |
| acknowledged by the consumer, in writing. Principal terms shall | 98 |
| include all items that must be disclosed by this section. | 99 |
| (C) If a dispute arises between the consumer and the company | 100 |
| concerning the contract for a non-recourse civil litigation | 101 |
| advance, the responsibilities of the attorney representing the | 102 |
| consumer in the civil action or claim shall be no greater than the | 103 |
| attorney's responsibilities under the Ohio Rules of Professional | 104 |
| Conduct. | 105 |