Provides for "litigation financing" regulation by DBR.

Rhode Island Third-Party Litigation Financing – Plain English Summary

This bill would create a set of rules in Rhode Island to regulate an industry known as "litigation financing" or "lawsuit lending." In this practice, a private company (called a third-party funder) provides money to someone who has filed a lawsuit — essentially advancing them cash while their case is ongoing. In return, the funder receives a portion of any eventual settlement or court award. Right now, this industry largely operates without specific oversight in Rhode Island. This bill would place it under the supervision of the state's Department of Business Regulation (DBR).

Under the bill, companies that offer litigation financing would need to follow specific consumer protection rules. This likely includes requirements around disclosure — meaning funders would have to clearly explain the terms of their agreements, including fees and how much of a settlement they are entitled to receive. The goal is to make sure people who use these services fully understand what they are agreeing to before signing a contract, and to prevent potentially predatory or confusing lending arrangements.

The people most directly affected are Rhode Island residents who are involved in lawsuits and might consider using a litigation financing company to cover living expenses or legal costs while waiting for their case to resolve. Litigation financing companies doing business in Rhode Island would also be affected, as they would face new licensing or regulatory requirements from the DBR.

As of now, the bill has been referred to the Senate Judiciary Committee and recommended for further study, meaning it has not yet been passed into law. It is scheduled for additional consideration in early 2026.