Rhode Island 2026 Regular Session

Rhode Island Senate Bill S3196

Introduced
4/3/26  

Caption

RELATING TO COURTS AND CIVIL PROCEDURE -- PROCEDURE GENERALLY --, LITIGATION LENDING AGREEMENTS

Impact

By designating payments made under an LLA that exceed the amount received as interest on loans, S3196 clarifies the application of state's usury laws to litigation financing. This means that these agreements, often disguised under various terminologies, will now fall under the scrutiny of interest rate regulations. The implications of this bill could result in fairer financial practices in the realm of civil disputes, potentially lowering the cost of litigation for individuals who may otherwise be exploited due to their financial situations. With the bill's passage, litigants may benefit from more equitable terms and conditions regarding financial agreements related to their cases.

Summary

Bill S3196 aims to regulate litigation lending agreements by ensuring they comply with Rhode Island's usury laws. It addresses growing concerns over litigation financing contracts that often impose exorbitantly high interest rates on litigants, sometimes exceeding 100% annually. The bill defines a 'litigation lending agreement' (LLA) as any contract where money is advanced to a litigant with the expectation of repayment from the proceeds of litigation. This legislation is introduced in response to practices that are deemed harmful to the welfare of citizens, highlighting a critical need for oversight in this burgeoning sector of legal financing.

Contention

The bill may encounter opposition from litigation financing companies that argue such regulations could stifle funding opportunities for individuals unable to afford litigation costs upfront. Critics of high-interest litigation loans express concern that regulation might reduce access to justice for certain demographics. However, proponents of S3196 argue it serves to protect vulnerable litigants from predatory lending practices that can exacerbate the financial burdens associated with legal battles. As this sector evolves, balancing access to financing with legal protections remains a focal point of the legislative conversations surrounding the bill.

Companion Bills

No companion bills found.

Previously Filed As

RI H5907

Makes litigation loan agreements subject to state usury laws.

RI S0270

Prohibits gender transition procedures for all minors, uses of public funds, discipline for health care providers, a 30 year statute of limitation, after reaching age of majority, and right to a civil action for damages.

RI S0534

Comprehensively regulates the practices of third-party litigation financiers in Rhode Island.

RI H5221

Comprehensively regulates the practices of third-party litigation financiers in Rhode Island.

RI H5013

HOUSE RESOLUTION AMENDING THE RULES OF THE HOUSE OF REPRESENTATIVES FOR THE YEARS 2023 AND 2024 (Requires the presiding officer to publish and provide to the House, a compilation of House procedures not addressed in the House rules or in Mason's manual of Legislative Procedures.)

RI H5297

Sets standards and procedures to allow and implement conjugal visitation at state correctional facilities.

RI S0704

Mandates transparency in nursing home finances and would establish procedures for compliance.

RI H5557

Establishes prevailing standards and procedures for licensing speech-language pathologists and audiologists in Rhode Island.

RI S0471

Establishes prevailing standards and procedures for licensing speech-language pathologists and audiologists in Rhode Island.

RI H6065

Mandates paid leave by allowing qualified employees to take medical leave to undergo donation procedures, medical tests, and recovery related to being a living organ donor, or bone marrow transplant donor.

Similar Bills

No similar bills found.