THE BILL ITSELF
HB 1157
Litigation Financing
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A bill to be entitled
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An act relating to litigation financing; providing a
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short title; designating part I of ch. 69, F.S.,
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entitled "General Provisions"; creating part II of ch.
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69, F.S., entitled "Litigation Financing"; creating s.
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69.101, F.S.; providing definitions; creating s.
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69.103, F.S.; requiring courts to consider potential
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conflicts of interest that may arise from the
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existence of a litigation financing agreement in
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specified circumstances; creating s. 69.105, F.S.;
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prohibiting specified acts by litigation financiers;
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creating s. 69.107, F.S.; requiring certain parties
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that enter into specified litigation financing
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agreements to serve specified notice; providing
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requirements for such notices; providing that certain
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information is not required to be included in such
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notices; authorizing courts to take specified actions
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relating to such notices; prohibiting foreign funders
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from taking specified actions; providing construction;
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providing penalties; creating s. 69.111, F.S.;
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providing that a litigation financing agreement is
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void and unenforceable in specified circumstances;
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providing for enforcement of specified violations
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under the Florida Deceptive and Unfair Trade Practices
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Act; authorizing a court, an agency, or a tribunal of
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competent jurisdiction to impose fines or other
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sanctions for certain violations; providing
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severability; providing applicability; providing an
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effective date.
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Be It Enacted by the Legislature of the State of Florida:
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Section 1. This act may be cited as the "Litigation
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Investment Safeguards and Transparency Act."
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Section 2. Sections 69.011, 69.021, 69.031, 69.041,
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69.051, 69.061, 69.071, and 69.081, Florida Statutes, are
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designated as part I of chapter 69, Florida Statutes, and
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entitled "General Provisions."
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Section 3. Part II of chapter 69, Florida Statutes,
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consisting of ss. 69.101, 69.103, 69.105, 69.107, and 69.111,
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Florida Statutes, is created and entitled "Litigation
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Financing."
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Section 4. Section 69.101, Florida Statutes, is created to
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read:
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69.101 Definitions.—As used in this part, the term:
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(1) "Foreign funder" means a foreign person, foreign
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principal, or sovereign wealth fund that provides funding
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directly or indirectly under a litigation financing agreement.
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(2) "Foreign person" means a person or an entity that is
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not:
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(a) A citizen of the United States;
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(b) An alien lawfully admitted for permanent residence in
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the United States;
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(c) An unincorporated association, a majority of members
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of which are citizens of the United States or aliens lawfully
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admitted for permanent residence in the United States; or
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(d) A corporation incorporated in the United States.
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(3) "Foreign principal" means:
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(a) The government or a government official of any country
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other than the United States;
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(b) A political subdivision or political party, or an
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official thereof, of a country other than the United States; or
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(c) A partnership, an association, a corporation, an
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organization, or other combination of persons organized under
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the laws of, or having its principal place of business in, a
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country other than the United States whose shares or other
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ownership interest is owned by the government or a government
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official of a country other than the United States or owned by a
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political subdivision or political party, or an official
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thereof, of a country other than the United States.
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(4) "Health care practitioner" has the same meaning as in
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s. 456.001.
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(5) "Litigation financier" means a person engaged in the
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business of providing litigation financing.
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(6) "Litigation financing agreement" means a transaction
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in which a litigation financier agrees to provide financing to a
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person who is a party to or an attorney or a law firm
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representing a party in a civil action, an administrative
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proceeding, a claim, or other legal proceeding in exchange for a
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right to receive payment, which right is contingent in any
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respect on the outcome of such action, claim, or proceeding or
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on the outcome of any matter within a portfolio that includes
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such action, claim, or proceeding and involves the same counsel
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or affiliated counsel. However, the term does not apply to any
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of the following:
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(a) An agreement wherein funds are provided for or to a
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party to a civil action, an administrative proceeding, a claim,
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or other legal proceeding for such person's use in paying his or
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her costs of living or other personal or familial expenses
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during the pendency of such action, claim, or proceeding and
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where such funds are not used to finance any litigation or other
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legal costs.
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(b) An agreement wherein an attorney consents to provide
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legal services on a contingency fee basis or to advance his or
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her client's legal costs, and where such services or costs are
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provided by the attorney in accordance with the Florida Rules of
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Professional Conduct.
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(c) An entity with a preexisting contractual obligation to
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indemnify or defend a party to a civil action, an administrative
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proceeding, a claim, or other legal proceeding.
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(d) A health insurer that has paid, or is obligated to
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pay, any sums for health care for an injured person under the
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terms of a health insurance plan or agreement.
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(e) The repayment of a financial institution, as defined
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in s. 655.005(1), for loans made directly to a party to a civil
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action, an administrative proceeding, a claim, or other legal
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proceeding or such party's attorney when repayment of the loan
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is not contingent upon the outcome of such action, claim, or
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proceeding or upon the outcome of any matter within a portfolio
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that includes such action, claim, or proceeding and involves the
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same counsel or affiliated counsel.
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(f) Funding provided to a nonprofit organization, exempt
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from federal income tax under s. 501(c)(3) of the United States
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Internal Revenue Code, provided that the nonprofit organization
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uses the funding only to provide pro bono legal representation
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on behalf of a client or engage in litigation on behalf of
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itself, its members, or a client and does not seek punitive
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damages, regardless of whether the nonprofit organization seeks
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an award of costs or attorney fees.
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(g) Funding provided by a nonprofit organization exempt
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from federal income tax under s. 501(c)(3) of the United States
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Internal Revenue Code, by grant or otherwise, to cover the costs
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and expenses of pro bono legal representation or litigation that
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does not seek punitive damages, regardless of whether the
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recipient of the funding seeks an award of costs or attorney
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fees. The nonprofit organization may, contingent upon the
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outcome of the litigation, receive repayment not to exceed the
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amount of funding provided.
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(7) "Proprietary information" means information developed,
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created, or discovered by a person, or which became known by or
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was conveyed to a person, which has commercial value in the
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person's business. The term includes, but is not limited to,
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domain names, trade secrets, copyrights, ideas, techniques,
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inventions, regardless of whether patentable, and other
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information of any type relating to designs, configurations,
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documentation, recorded data, schematics, circuits, mask works,
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layouts, source code, object code, master works, master
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databases, algorithms, flow charts, formulae, works of
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authorship, mechanisms, research, manufacture, improvements,
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assembly, installation, intellectual property, including patents
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and patent applications, and information concerning the person's
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actual or anticipated business, research, or development or
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received in confidence by or for the person from any other
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source.
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(8) "Sovereign wealth fund" means an investment fund owned
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or controlled by a foreign principal or an agent thereof.
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Section 5. Section 69.103, Florida Statutes, is created to
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read:
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69.103 Litigation financing agreement; representation of
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client interests; potential conflicts of interest.—A court may
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take the existence of a litigation financing agreement into
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account:
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(1) In a class action lawsuit brought in the courts of
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this state when determining whether a class representative or
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class counsel would adequately and fairly represent the
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interests of the class.
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(2) In actions involving a common question of law or fact
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pending before the court which may be or has been consolidated
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when determining whether the lead counsel or any co-lead counsel
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would adequately and fairly represent the interests of the
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parties to such actions.
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Section 6. Section 69.105, Florida Statutes, is created to
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read:
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69.105 Prohibited conduct.—A litigation financier may not:
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(1) Direct, or make any decisions with respect to, the
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course of any civil action, administrative proceeding, claim, or
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other legal proceeding for which the litigation financier has
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provided financing, or any settlement or other disposition
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thereof. This prohibition includes, but is not limited to,
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decisions in appointing or changing counsel, choice or use of
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expert witnesses, and litigation strategy. All rights to make
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decisions with respect to the course and settlement or other
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disposition of the subject civil action, administrative
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proceeding, claim, or other legal proceeding remain solely with
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the parties to such action, claim, or proceeding and their
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counsel of record.
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(2) Contract for or receive, whether directly or
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indirectly, a larger share of the proceeds of a civil action, an
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administrative proceeding, a claim, or other legal proceeding
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financed by a litigation financing agreement than the share of
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the proceeds collectively recovered by the plaintiffs to any
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such action, claim, or proceeding after the payment of any
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attorney fees and costs owed in connection to such action,
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claim, or proceeding.
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(3) Pay or offer to pay a commission, referral fee, or
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other consideration to any person, including an attorney, a law
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firm, or a health care practitioner, for referring a person to
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the litigation financier.
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(4) Assign or securitize a litigation financing agreement,
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in whole or in part.
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(5) Be assigned rights to or in a civil action, an
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administrative proceeding, a claim, or other legal proceeding
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for which the litigation financier provided financing, other
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than the right to receive a share of the proceeds of such
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action, claim, or proceeding pursuant to the litigation
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financing agreement.
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Section 7. Section 69.107, Florida Statutes, is created to
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read:
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69.107 Transparency for foreign litigation funders.—
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(1) If a party to a civil action, administrative
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proceeding, claim, or other legal proceeding, or that party's
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counsel of record, has entered into a litigation financing
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agreement with a foreign person, foreign principal, or sovereign
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wealth fund, the party shall, within 14 days after execution of
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the agreement or within 7 days after filing such action,
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whichever occurs first, file and serve a notice that:
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(a) Identifies the existence of the funding relationship.
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(b) Identifies the foreign person, foreign principal, or
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sovereign wealth fund by legal name and the jurisdiction under
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the law of which the litigation financing agreement is
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organized.
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(c) Identifies each foreign person, foreign principal, or
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sovereign wealth fund that, directly or indirectly, owns or
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controls 3 percent or more of the capital, equity, or other
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beneficial ownership interests in the litigation financier,
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including the legal name, address, and citizenship or country of
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incorporation or registration of each such person or entity.
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(2) The notice required in subsection (1) must be filed
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with the court, administrative agency, or tribunal in which the
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action is pending, served on all parties, and provided to the
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Department of Financial Services and the Office of the Attorney
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General.
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(3) The dollar amounts, financing terms, and other
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proprietary or trade-secret information contained in or related
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to the litigation financing agreement are not required to be
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disclosed in the notice. The court may permit the notice or
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supporting documentation to be filed under seal and may issue
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protective orders as necessary to safeguard proprietary or
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confidential information.
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(4) A foreign funder or any person acting on behalf of the
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foreign funder may not:
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(a) Use a domestic entity or affiliate to conceal or evade
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the disclosure requirements of this section; or
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(b) Receive, transmit, or share proprietary, privileged,
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or national security-related information obtained through
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litigation financing with any foreign person, foreign principal,
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or sovereign wealth fund that is not a party or an attorney to
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the action.
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(5) The requirements of this section apply to a litigation
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financing agreement entered into with a litigation financier if
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a foreign person, foreign principal, or sovereign wealth fund
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has provided or will provide funds, whether directly or
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indirectly, to the litigation financier that amount to 5 percent
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or more of the funds the financier has provided or is committed
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to provide under the litigation funding agreement.
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(6) Failure to comply with this section may subject the
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noncomplying party to appropriate sanctions under s. 69.111 or
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the applicable rules of civil procedure. This section does not
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create a private cause of action.
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Section 8. Section 69.111, Florida Statutes, is created to
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read:
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69.111 Penalties; enforcement.—
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(1) A litigation financing agreement executed in violation
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of this part is void and unenforceable.
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(2) A violation of s. 69.105 is a deceptive and unfair
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trade practice actionable under part II of chapter 501.
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(3) A court, an agency, or a tribunal of competent
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jurisdiction may impose fines or any other sanction it deems
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appropriate upon any person who violates s. 69.107.
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Section 9. If any provision of this act or its application
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to any person or circumstance is held invalid, the invalidity
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does not affect other provisions or applications of the act
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which can be given effect without the invalid provision or
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application, and to this end the provisions of this act are
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severable.
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Section 10. The disclosure requirements in s. 69.107,
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Florida Statutes, as created by this act, apply to any civil
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action, administrative proceeding, claim, or other legal
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proceeding pending or commenced on or after July 1, 2026. Any
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party to or counsel of record for a civil action, an
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administrative proceeding, a claim, or other legal proceeding
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pending on July 1, 2026, who would have been required to make a
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disclosure under s. 69.107, Florida Statutes, had it been in
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effect at the time the relevant action occurred, must make such
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disclosure within 30 days after July 1, 2026. Failure to do so
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is sanctionable as provided in s. 69.111, Florida Statutes.
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Section 11. Except as otherwise provided herein, this act
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applies to a litigation financing agreement entered into on or
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after July 1, 2026.
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This act shall take effect July 1, 2026. Section 12.