To enact sections 1357.01, 1357.011, 1357.02, 1357.03, 1357.04, 1357.05, 1357.06, 1357.07, 1357.08, 1357.09, and 1357.10 and to repeal section 1349.55 of the Revised Code to revise and supplement state regulations concerning non-recourse litigation funding agreements.
HB105 creates a new chapter of Ohio law to regulate non-recourse litigation funding agreements, including both consumer litigation funding and commercial litigation financing. The bill defines key terms, sets disclosure requirements, and establishes rules for how these agreements must be written, signed, canceled, and administered. For consumer agreements, it requires plain-language contracts, prominent front-page disclosures, a 10-business-day cancellation right, and an attorney acknowledgment confirming review of the agreement and the absence of referral fees or improper advice.
The bill also limits what funding companies may do. It bars referral fees to attorneys and certain medical providers, prohibits companies from directing litigation strategy or settlement decisions, restricts charges to no more than 10% of the funded amount per year, and makes violations unfair or deceptive acts under Ohio consumer protection law. It further gives the attorney general enforcement authority and makes noncompliant agreements unenforceable. For commercial litigation financing, the bill adds restrictions on foreign funding, protects sealed or protected information, requires disclosure of financing agreements to parties and insurers, and authorizes equitable remedies, including barring violators from doing business in Ohio.
HB105 would affect Ohio’s Revised Code by adding sections 1357.01 through 1357.08 and repealing section 1349.55. It would also interact with existing consumer protection law, attorney ethics rules, lien priorities, discovery rules, and medical and workers’ compensation lien provisions. The bill expressly preserves certain liens tied to the underlying claim, such as attorney fee liens, Medicaid liens, Medicare liens, and workers’ compensation liens, while placing litigation funding interests ahead of later-perfected liens on claim proceeds.
The general sentiment reflected in the voting history is broadly favorable, with the bill passing House committee 12-0 and the full House 76-14. That suggests substantial support for regulating litigation funding and protecting consumers and the court system, though the 14 no votes indicate meaningful opposition. No committee transcript was provided, so the record does not show detailed debate, but the bill’s structure suggests supporters likely view it as a consumer-protection and anti-abuse measure.
The main points of contention appear to be the scope and restrictiveness of the regulation. Potential concerns include the cap on charges, the enforceability penalties, the prohibition on foreign-backed litigation funding, and the disclosure obligations imposed on consumers, attorneys, and financiers. Opponents may also object to the bill’s strong policy statement against champerty and maintenance, its treatment of litigation funding as a lien on proceeds, and the broad enforcement powers given to the attorney general.
HB105 would add a comprehensive regulatory framework to Ohio law for litigation funding transactions, creating new statutory duties for consumer litigation funding companies, commercial litigation financiers, consumers, attorneys, and insurers. It would amend the Revised Code by enacting new sections in Chapter 1357 and repealing section 1349.55, while also affecting consumer protection enforcement, discovery practice, lien priority, and attorney-client disclosure practices. The bill would make certain violations actionable under Ohio’s deceptive practices law and would give courts and the attorney general new tools to invalidate agreements and restrict violators.
The available voting history indicates strong but not unanimous support for the bill. It passed the House Insurance Committee unanimously and cleared the House by a comfortable margin, suggesting that many lawmakers support tighter oversight of litigation funding. The absence of committee transcripts limits insight into floor debate, but the vote totals imply that the bill is generally viewed favorably as a consumer-protection and litigation-integrity measure, with a minority of members likely concerned about overregulation or burdens on access to funding.
The most likely areas of disagreement are the bill’s limits on litigation funding companies and its treatment of foreign capital, both of which could be seen as necessary safeguards by supporters and as overly restrictive by critics. The 10% annual charge cap, mandatory attorney acknowledgments, disclosure requirements to opposing parties and insurers, and the prohibition on foreign-domiciled funding sources are especially notable. Another point of contention is the bill’s strong enforcement scheme, including unenforceability of noncompliant agreements and attorney general authority to seek broad equitable remedies, which may be viewed as necessary consumer protection by supporters and as punitive or market-limiting by opponents.