SF 2085: Prohibiting litigation financing contracts

What it does

This bill prohibits litigation financing contracts. Litigation financing contracts are agreements between a third party and a plaintiff, an attorney, or a law firm of a civil action in which the third party provides funding for legal expenses in exchange for a percentage of any settlement or judgment. The bill does not prohibit the provision of legal services on a contingency fee basis, or the advancement of legal costs, where such services or costs are provided on or on behalf of a consumer by an attorney representing the consumer in the dispute and in accordance with Iowa rules of professional conduct, a commercial tort claim, or a claim under Code chapter (workers’ compensation). The bill applies to litigation financing contracts entered into on or after the effective date of the bill.

Senate subcommittee · named January 27, 2022

• Sen. Zach Nunn (R)
• Sen. Tim Goodwin (R)
• Sen. Herman C. Quirmbach (D) · herman.quirmbach@legis.iowa.gov

Lobbying · 5 for, 6 against

For: American Property Casualty Insurance Association (APCIA); Annett Holdings; CRST International; Iowa Insurance Institute; Iowa Motor Truck Association

Against: Alliance for Responsible Consumer Legal Funding; American Legal Finance Association; International Legal Finance Association; Iowa Academy of Trial Lawyers; Iowa Association for Justice; Iowa State Bar Association

In plain words

1. January 20, 2022Filed in the Senate and sent to the Commerce committee
2. January 27, 2022Senate subcommittee named: Nunn, Goodwin and Quirmbach