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House amends maintenance funding practices, establishes registry and reporting requirements
Summary
House Bill 312, which creates a lightweight regulatory framework for firms that advance settlement proceeds to plaintiffs (maintenance funding), was adopted with a second substitute after sponsor changes and passed the House 64-3; the bill creates a registry with the consumer protection division and reporting requirements.
Representative Dunnigan presented House Bill 312 on Feb. 25 to set a basic framework for companies that provide maintenance funding (advances against anticipated settlements). The sponsor said these companies advance money to individuals awaiting settlements and then recover advances plus fees when a settlement or judgment is realized.
The bill requires maintenance funders to register with the state consumer protection division, pay a fee, disclose their fees for public transparency and report certain settlement receipts. The second substitute amended reporting requirements so that the total amount of any realized settlement or judgment must be listed only if the maintenance funder received payment during the reporting period; it also removed a requirement that plaintiff attorneys validate the appropriateness of funding agreements.
Representative Dunnegan explained the two fixes in the second substitute as limited clarifications to reporting cadence and attorney responsibilities. The House adopted the second substitute and passed the bill (tallied 64 yes, 3 no); the bill will be transmitted to the Senate for further consideration.
