AN ACT RELATING TO COURTS AND CIVIL PROCEDURE -- PROCEDURE GENERALLY -- LITIGATION LENDING AGREEMENTS (Makes litigation loan agreements subject to state usury laws.)

H7751

2026 -- H 7751
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LC005153
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STATE OF RHODE ISLAND
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2026
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A N A C T
RELATING TO COURTS AND CIVIL PROCEDURE -- PROCEDURE GENERALLY --
LITIGATION LENDING AGREEMENTS

Introduced By:
Representatives Shanley, Potter, Craven, McEntee, Kazarian, and
Corvese

Date Introduced:
February 12, 2026

Referred To:
House Judiciary
It is enacted by the General Assembly as follows:
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SECTION 1. Title 9 of the General Laws entitled "COURTS AND CIVIL PROCEDURE
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-- PROCEDURE GENERALLY" is hereby amended by adding thereto the following chapter:
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CHAPTER 3.1
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LITIGATION LENDING AGREEMENTS
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9-3.1-1. Legislative findings.

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The general assembly finds and declares that:
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(1) Litigation financing contracts are being entered into where companies advance money
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to a litigant in return for payment from litigation proceeds at effective annual interest rates far
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exceeding state usury limits; and
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(2) These contracts often bear annual interest rates which exceed one hundred percent
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(100%); and
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(3) These rates are detrimental to the general welfare of the citizens of this state and it is
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necessary to enact legislation to ensure that litigation-funding advances conform to state laws
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governing usurious loans.
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9-3.1-2. Litigation lending agreement defined.

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A "litigation lending agreement" (LLA) is any agreement whereby monies are paid to
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parties to civil litigation (litigants) in consideration for a litigant's agreement to repay these monies
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(with or without interest, one-time charges, use fees, or any other add-on charges) from the proceeds

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of the litigation. Not included in the definition of an LLA are advancements of expenses of litigation
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made by attorneys on behalf of their clients, as permitted by rule 1.8(e) of the Rhode Island rules
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of professional conduct.
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9-3.1-3. Litigation advances considered loans pursuant to state usury law.

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All payments made by a litigant under an LLA greater than the amount received by the
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litigant under the LLA shall be considered interest on loans subject to the provisions of chapter 26
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of title 6 ("interest and usury") regardless of:
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(1) Whether an LLA characterizes itself as a "loan," an "advance," an "investment," an
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"assignment of proceeds," or any other characterization;
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(2) Whether monies to be repaid under the LLA are called "interest," "use fees," or any
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other term;
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(3) Whether the amount received by the litigant under the LLA otherwise exceeds any
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monetary limit for loans and interest rates falling within the provisions of chapter 26 of title 6; and
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(4) Whether the obligation on the part of the litigant to repay monies is contingent upon a
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particular outcome of the litigation.
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SECTION 2. This act shall take effect upon passage.
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LC005153
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EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO COURTS AND CIVIL PROCEDURE -- PROCEDURE GENERALLY --
LITIGATION LENDING AGREEMENTS
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This act would make litigation loan agreements subject to state usury laws.
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This act would take effect upon passage.
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LC005153
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