This bill adds a new rule to federal law that requires parties in civil cases to tell the court and other parties when a third person will receive money or something of value that depends on the case outcome. The party must also give the court and other parties any agreement that created that right, unless the court or parties agree otherwise. The rule does not apply when the payment is only the repayment of a loan, repayment of a loan with limited interest (not more than the higher of 7% or two times the prior year's average 30-year Treasury yield), or reimbursement of attorney fees. Disclosures must be made by the later of 10 days after the agreement is signed or when the case is filed. If a disclosure becomes incomplete or wrong, the party must correct it in a timely way or when the court orders it. The rule applies to civil cases pending on or started after the law goes into effect.
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The bill is titled to provide "transparency and oversight of third-party beneficiaries in civil actions." Sponsors introduced it to require disclosure of who stands to receive contingent payments and the agreements that create those rights.
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