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Please see http://docs.legis.wisconsin.gov for the production version.
LRB-4700/1
MJ/TD/AG/KP/MP:all
2017 - 2018 LEGISLATURE
December 19, 2017 - Introduced by Representatives Born, Nygren, Ballweg,
Bernier, R. Brooks, Duchow, Felzkowski, Hutton, Kitchens, Kooyenga,
Krug, Kulp, Loudenbeck, Mursau, Petersen, Ripp, Rohrkaste, Spiros,
Tauchen, Tittl, VanderMeer, Wichgers and Edming, cosponsored by
Senators Tiffany, Craig, Darling, Olsen and Stroebel. Referred to
Committee on Judiciary.
AB773,2,2 1An Act to repeal 426.110 (5) to (13); to renumber 802.06 (1), 803.08 (2), 804.01
2(2) (e) 1., 893.93 (1) (a) and 893.93 (1) (b); to renumber and amend 803.08 (1)
3and 804.09 (2) (a); to amend 138.04, 218.0125 (7), 218.0126, 426.110 (16),
4628.46 (1), 801.01 (2), 804.01 (1), 804.01 (2) (e) 2., 804.01 (2) (e) 3., 804.01 (3) (a)
52., 804.01 (4), 804.09 (2) (b) 1., 804.12 (1) (a), 893.53, 893.89 (1) and 893.89 (3)
6(b); and to create 100.56, 177.30 (6), 426.110 (4m), 802.06 (1) (b), 803.08 (1) (a)
7to (e), 803.08 (3) to (10), 803.08 (12) to (15), 804.01 (2) (am), 804.01 (2) (bg),
8804.01 (2) (e) 1g., 804.01 (2m), 804.01 (8), 804.09 (2) (a) 3. and 893.93 (1m)
9(intro.) of the statutes; relating to: discovery of information in court
10proceedings; procedural requirements relating to class actions; consumer
11lawsuit lending; the statute of limitations for certain civil actions; agreements

1by the secretary of revenue to allow third-party audits related to unclaimed
2property; interest rates for overdue insurance claims; and providing a penalty.
Analysis by the Legislative Reference Bureau
Discovery procedures
This bill makes certain changes to discovery procedure in court proceedings.
Under the bill, the court must limit the frequency or extent of discovery if it
determines that the discovery sought is cumulative or duplicative, or can be obtained
from some other source that is more convenient, less burdensome, or less expensive
or that the burden or expense of the proposed discovery outweighs its likely benefit
or is not proportional to the claims and defenses at issue. In addition, the bill limits
the type of electronic information that can be discovered such that a court may not
require a party to keep or provide the following types of electronic information: data
that cannot be retrieved without substantial additional programming or without
transforming it into another form before search and retrieval can be achieved;
backup data that are substantially duplicative of data that are more accessible
elsewhere; legacy data remaining from obsolete systems that are unintelligible on
successor systems; and any other data that are not available to the producing party
in the ordinary course of business and that the party identifies as not reasonably
accessible because of undue burden or cost.
The bill also creates a mandatory disclosure requirement that requires a party,
without awaiting a discovery request, to disclose any agreement under which any
person, other than an attorney who is permitted to charge a contingent fee for
representing a party, has a right to receive compensation that is contingent on and
sourced from any proceeds of the civil action.
CLASS ACTIONS
This bill creates detailed procedures relating to class actions where previously
Wisconsin had few procedural requirements relating to class actions. The
procedures implemented in the bill closely track the federal procedures for filing and
maintaining a class action, and are similar to changes proposed by the Wisconsin
Judicial Council in 2017 petition number 17-03 to the Supreme Court. The bill
creates prerequisites for filing a class action; differentiates between three different
types of class actions that may be certified; creates requirements that the court must
follow with regard to certifying a class, notifying potential class members, and
entering a judgment; enumerates procedures for conducting a class action; requires
the court to be involved in settling a class action; describes certain aspects of
appellate procedure for a class action; requires the court to select counsel for the class
in a class action; and creates a procedure for recovery of attorney fees.
consumer lawsuit lending
This bill creates provisions governing consumer lawsuit lending transactions.
Under the bill, a “consumer" is an individual who is or may become a plaintiff or
claimant in a civil action or other proceeding (dispute). “Consumer lawsuit lending"

means 1) providing money to a consumer, for the consumer to use for any purpose
other than prosecuting the consumer's dispute, with repayment of the money
conditioned on and derived from the consumer's proceeds of the dispute; or 2)
purchasing from a consumer a contingent right to receive a share of the potential
proceeds of the consumer's dispute. In a consumer lawsuit lending transaction, all
of the following apply: 1) the lender may charge interest at a rate of no more than
18 percent per year; 2) the consumer may prepay the transaction at any time and,
upon prepayment in full, is entitled to a refund of unearned interest charged; 3) the
transaction term may not exceed 36 months; 4) the lender may not charge fees of
more than $360 per year; 5) the lender may not pay commissions or referral fees to
attorneys or health care providers; and 6) there must be a written agreement
between the lender and the consumer that contains specified information, including
the interest rate and the consumer's right to receive a refund of interest charged if
prepayment is made in full, as well as provisions that disclose all one-time fees
charged to the consumer, disclose the amount to be received by the consumer and the
amount the consumer assigns to the lender, state that the consumer has a right to
cancel the agreement within five days, state that the lender has no right to make
decisions or otherwise participate in the dispute, and state that the lender may be
paid only from the consumer's proceeds of the dispute and is not entitled to be repaid
if there are no such proceeds. A lender that violates any of these requirements or
restrictions is subject to a civil forfeiture of not less than $25 nor more than $5,000,
unless the lender establishes that the violation was the result of an unintentional
good faith error and the lender had in place policies or procedures designed to achieve
compliance. The Department of Trade, Agriculture and Consumer Protection has
enforcement authority over violations.
The bill requires a consumer, upon commencing a lawsuit or within ten days
after entering into a consumer lawsuit lending transaction, to provide the court and
all parties to the lawsuit with a copy of the consumer lawsuit lending transaction
agreement and any documents the consumer provided to the lender in connection
with the agreement.
Statutes of limitation
Under current law, the statute of limitations for an action for injury to character
is six years. Under the bill, the statute of limitations is shortened to three years.
Under current law, the statute of limitations for an action for injury resulting
from improvements to real property is ten years. Under the bill, the statute of
limitations is shortened to six years.
Under current law, the statute of limitations for an action upon a liability
created by statute when a different limitation is not prescribed by law and for an
action for relief on the ground of fraud is six years. Under the bill, the statute of
limitations is shortened to three years.
Third-party tax audits
This bill prohibits the secretary of revenue from entering into an agreement to
allow a person to engage in an audit on a contingent fee basis of another person's
documents or records in order to administer the unclaimed property law or to

purchase information arising from the audit, except for information received by the
federal government.
Timely payment of claims
This bill changes the interest rate that an insurer must pay for overdue
insurance claims from 12 percent to the Federal Reserve Board's bank prime loan
rate on January 1 of the year in which the insurer is furnished written notice of the
fact of a covered loss plus 1 percent. Current law requires an insurer to promptly pay
every insurance claim and, generally, a claim is considered overdue if the claim is not
paid within 30 days after the insurer has written notice of the fact and amount of a
covered loss.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB773,1 1Section 1. 100.56 of the statutes is created to read:
AB773,4,2 2100.56 Consumer lawsuit lending. (1) In this section:
AB773,4,43 (a) “Consumer" means an individual who is or may become a plaintiff or
4claimant or demandant in any dispute.
AB773,4,65 (b) “Consumer lawsuit lender" means any person that engages in consumer
6lawsuit lending.
AB773,4,77 (c) “Consumer lawsuit lending" means any of the following:
AB773,4,118 1. Providing money to any consumer, for the consumer to use for any purpose
9other than prosecuting the consumer's dispute, with repayment of the money
10conditioned on and derived from the consumer's proceeds of the dispute, regardless
11of whether these proceeds result from a judgment, settlement, or other source.
AB773,4,1412 2. Purchasing from any consumer a contingent right to receive a share of the
13potential proceeds of the consumer's dispute, regardless of whether these proceeds
14result from a judgment, settlement, or other source.
AB773,4,1515 (d) “Dispute" means any of the following:
AB773,5,1
11. Any civil action.
AB773,5,22 2. Any alternative dispute resolution proceeding.
AB773,5,43 3. Any administrative proceeding before any agency or instrumentality of the
4state.
AB773,5,6 5(2) (a) A consumer lawsuit lender may charge or contract for interest in a
6consumer lawsuit lending transaction at a rate not exceeding 18 percent per year.
AB773,5,107 (b) A consumer lawsuit lending transaction may be prepaid by the consumer
8at any time in whole or in part. Upon prepayment of the consumer lawsuit lending
9transaction in full by cash, renewal, or refinancing, the consumer is entitled to a
10refund of unearned interest charged, which shall be determined as follows:
AB773,5,1811 1. On a consumer lawsuit lending transaction that is repayable in substantially
12equal, successive installments at approximately equal intervals of time and the face
13amount of which includes predetermined interest charges, the amount of the refund
14shall be as great a proportion of the total interest charged as the sum of the balances
15scheduled to be outstanding during the full installment periods commencing with
16the installment date nearest the date of prepayment bears to the sum of the balances
17scheduled to be outstanding for all installment periods of the consumer lawsuit
18lending transaction.
AB773,5,2319 2. On any consumer lawsuit lending transaction other than one under subd.
201., the amount of the refund shall not be less than the difference between the interest
21charged and interest, at the rate contracted for, computed upon the unpaid principal
22balances of the consumer lawsuit lending transaction from time to time outstanding
23prior to prepayment in full.
AB773,5,25 24(3) (a) The term of a consumer lawsuit lending transaction may not exceed 36
25months.
AB773,6,3
1(b) The maximum total annual fee charged by a consumer lawsuit lender in a
2consumer lawsuit lending transaction, including any underwriting fee, organization
3fee, or other fee or charge, may not exceed $360 per year.
AB773,6,6 4(4) (a) A consumer lawsuit lender may not enter into a consumer lawsuit
5lending transaction unless there is a written agreement between the consumer
6lawsuit lender and the consumer that includes all of the following:
AB773,6,87 1. The rate of interest agreed upon in terms either of simple interest computed
8on the declining principal balance or of the actual interest cost in money.
AB773,6,119 2. A statement that the consumer lawsuit lending transaction may be prepaid
10in full or in part and that, if the consumer lawsuit lending transaction is prepaid in
11full, the consumer may receive a refund of interest charged.
AB773,6,1612 3. On the front page of the agreement, a disclosure of the amount of money to
13be provided to the consumer and the total amount of money to be assigned by the
14consumer to the consumer lawsuit lender, described in 6-month intervals for a total
15period of 36 months, along with an itemization of all one-time fees to be charged to
16the consumer.
AB773,6,2117 4. A provision that the consumer may cancel the agreement, without penalty
18or further obligation, within 5 business days after entering into the consumer
19lawsuit lending transaction if, during this period, the consumer returns to the
20consumer lawsuit lender either the lender's unnegotiated check or all money
21provided to the consumer as well as notice of cancellation.
AB773,6,2522 5. A provision that the consumer lawsuit lender has no right to, and will not,
23make any decisions with respect to the conduct of the dispute or any settlement or
24resolution of the dispute and that those decisions remain solely with the consumer
25and the consumer's attorney.
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