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) 3
and 804.09 (2) (a); to amend
138.04, 218.0125 (7), 218.0126, 426.110 (16), 4
628.46 (1), 801.01 (2), 804.01 (1), 804.01 (2) (e) 2., 804.01 (2) (e) 3., 804.01 (3) (a) 5
2., 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) 7
to (e), 803.08 (3) to (10), 803.08 (12) to (15), 804.01 (2) (am), 804.01 (2) (bg), 8
804.01 (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
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.
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
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
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:
100.56 of the statutes is created to read:
2100.56 Consumer lawsuit lending. (1)
In this section:
(a) “Consumer" means an individual who is or may become a plaintiff or 4
claimant or demandant in any dispute.
(b) “Consumer lawsuit lender" means any person that engages in consumer 6
(c) “Consumer lawsuit lending" means any of the following:
1. Providing money to any consumer, for the consumer to use for any purpose 9
other than prosecuting the consumer's dispute, with repayment of the money 10
conditioned on and derived from the consumer's proceeds of the dispute, regardless 11
of whether these proceeds result from a judgment, settlement, or other source.
2. Purchasing from any consumer a contingent right to receive a share of the 13
potential proceeds of the consumer's dispute, regardless of whether these proceeds 14
result from a judgment, settlement, or other source.
(d) “Dispute" means any of the following:
1. Any civil action.
2. Any alternative dispute resolution proceeding.
3. Any administrative proceeding before any agency or instrumentality of the 4
(a) A consumer lawsuit lender may charge or contract for interest in a 6
consumer lawsuit lending transaction at a rate not exceeding 18 percent per year.
(b) A consumer lawsuit lending transaction may be prepaid by the consumer 8
at any time in whole or in part. Upon prepayment of the consumer lawsuit lending 9
transaction in full by cash, renewal, or refinancing, the consumer is entitled to a 10
refund of unearned interest charged, which shall be determined as follows:
1. On a consumer lawsuit lending transaction that is repayable in substantially 12
equal, successive installments at approximately equal intervals of time and the face 13
amount of which includes predetermined interest charges, the amount of the refund 14
shall be as great a proportion of the total interest charged as the sum of the balances 15
scheduled to be outstanding during the full installment periods commencing with 16
the installment date nearest the date of prepayment bears to the sum of the balances 17
scheduled to be outstanding for all installment periods of the consumer lawsuit 18
2. On any consumer lawsuit lending transaction other than one under subd. 20
1., the amount of the refund shall not be less than the difference between the interest 21
charged and interest, at the rate contracted for, computed upon the unpaid principal 22
balances of the consumer lawsuit lending transaction from time to time outstanding 23
prior to prepayment in full.
(a) The term of a consumer lawsuit lending transaction may not exceed 36 25
(b) The maximum total annual fee charged by a consumer lawsuit lender in a 2
consumer lawsuit lending transaction, including any underwriting fee, organization 3
fee, or other fee or charge, may not exceed $360 per year.
(a) A consumer lawsuit lender may not enter into a consumer lawsuit 5
lending transaction unless there is a written agreement between the consumer 6
lawsuit lender and the consumer that includes all of the following:
1. The rate of interest agreed upon in terms either of simple interest computed 8
on the declining principal balance or of the actual interest cost in money.
2. A statement that the consumer lawsuit lending transaction may be prepaid 10
in full or in part and that, if the consumer lawsuit lending transaction is prepaid in 11
full, the consumer may receive a refund of interest charged.
3. On the front page of the agreement, a disclosure of the amount of money to 13
be provided to the consumer and the total amount of money to be assigned by the 14
consumer to the consumer lawsuit lender, described in 6-month intervals for a total 15
period of 36 months, along with an itemization of all one-time fees to be charged to 16
4. A provision that the consumer may cancel the agreement, without penalty 18
or further obligation, within 5 business days after entering into the consumer 19
lawsuit lending transaction if, during this period, the consumer returns to the 20
consumer lawsuit lender either the lender's unnegotiated check or all money 21
provided to the consumer as well as notice of cancellation.
5. A provision that the consumer lawsuit lender has no right to, and will not, 23
make any decisions with respect to the conduct of the dispute or any settlement or 24
resolution of the dispute and that those decisions remain solely with the consumer 25
and the consumer's attorney.
6. A provision that the consumer lawsuit lender has no right to participate in 2
the prosecution of the dispute or to obtain documents or evidence connected with the 3
7. A provision that the consumer lawsuit lender accepts only an assignment of 5
an amount of the potential proceeds from the dispute and does not accept an 6
assignment of the consumer's legal claim. This provision shall also specify that the 7
consumer lawsuit lender has no right to pursue the consumer's legal claim on behalf 8
of or in lieu of the consumer.
8. A provision that the consumer lawsuit lender may be paid only from the 10
consumer's proceeds of the dispute. This provision shall also specify that the 11
consumer does not owe the consumer lawsuit lender anything if there is no recovery 12
by the consumer in the dispute unless the consumer violates the terms of the 13
agreement. This provision shall also specify that, if there are insufficient proceeds 14
to pay the consumer lawsuit lender in full, the consumer lawsuit lender may be paid 15
only to the extent that there are available proceeds from the dispute, unless the 16
consumer violates the terms of the agreement.
9. A provision that, if the consumer is represented by an attorney, any proceeds 18
from the dispute paid to the consumer lawsuit lender may be paid only from the trust 19
account of the consumer's attorney.
(b) Each provision or disclosure required under this subsection shall be in 21
boldface type and of a type size no smaller than 12-point, except that the provision 22
under par. (a) 8. shall be of a type size no smaller than 15-point.
(a) In this subsection, “health care provider" has the meaning given in s. 24
146.81 (1), but also includes any individual licensed or certified in another state for 25
the same or equivalent profession.
(b) A consumer lawsuit lender may not pay or offer to pay commissions or 2
referral fees to any attorney or employee of a law firm, or to any health care provider 3
or employee of a health care provider, for referring a consumer to the consumer 4
(a) Except as provided in par. (b), any consumer lawsuit lender that violates 6
this section is subject to a forfeiture of not less than $25 nor more than $5,000 for each 7
(b) It is a defense to a violation of this section if the consumer lawsuit lender 9
establishes that the violation was the result of an unintentional good faith error and, 10
at the time of the violation, the consumer lawsuit lender had in place policies or 11
procedures designed to achieve compliance with this section.
138.04 of the statutes is amended to read:
13138.04 Legal rate.
The rate of interest upon the loan or forbearance of any 14
or things in action shall be $5 upon the $100 for one year and according 15
to that rate for a greater or less sum or for a longer or a shorter time; but parties may 16
contract for the payment and receipt of a rate of interest not exceeding the rate 17
allowed in ss. 100.56 (2) (a),
138.041 to 138.056, 138.09 to 138.14, 218.0101 to 18
218.0163, or 422.201, in which case such rate shall be clearly expressed in writing.
177.30 (6) of the statutes is created to read:
The administrator may not enter into a contract or other agreement 21
to allow any person to engage in an audit on a contingent fee basis of another person's 22
documents or records as part of an effort to administer this chapter or to purchase 23
information or documents arising from the audit, except that this subsection does not 24
apply to information received from the federal government.
218.0125 (7) of the statutes is amended to read:
A claim made by a franchised motor vehicle dealer for 2
compensation under this section shall be either approved or disapproved within 30 3
days after the claim is submitted to the manufacturer, importer or distributor in the 4
manner and on the forms the manufacturer, importer or distributor reasonably 5
prescribes. An approved claim shall be paid within 30 days after its approval. If a 6
claim is not specifically disapproved in writing or by electronic transmission within 7
30 days after the date on which the manufacturer, importer or distributor receives 8
it, the claim shall be considered to be approved and payment shall follow within 30 9
days. A manufacturer, importer or distributor retains the right to audit claims for 10
a period of one year after the date on which the claim is paid and to charge back any 11
amounts paid on claims that are false or unsubstantiated. If there is evidence of 12
fraud, this subsection does not limit the right of the manufacturer to audit for longer 13
periods and charge back for any fraudulent claim, subject to the limitations period 14
under s. 893.93 (1) (1m)
218.0126 of the statutes is amended to read:
16218.0126 Promotional allowances.
A claim made by a franchised motor 17
vehicle dealer for promotional allowances or other incentive payments shall be either 18
approved or disapproved within 30 days after the claim is submitted to the 19
manufacturer, importer or distributor in the manner and on the forms the 20
manufacturer, importer or distributor reasonably prescribes. An approved claim 21
shall be paid within 30 days after its approval. If a claim is not specifically 22
disapproved in writing or by electronic transmission within 30 days after the date 23
on which the manufacturer, importer or distributor receives it, the claim shall be 24
considered to be approved and payment shall follow within 30 days after approval. 25
A manufacturer, importer or distributor retains the right to audit a claim for a period
of 2 years after the date on which the claim is paid and to charge back any amounts 2
paid on claims that are false or unsubstantiated. If there is evidence of fraud, this 3
section does not limit the right of the manufacturer to audit for longer periods and 4
charge back for any fraudulent claim, subject to the limitations period under s. 5
893.93 (1) (1m)
426.110 (4m) of the statutes is created to read:
Actions commended under this section shall be conducted in 8
accordance with the procedures set forth in s. 803.08.
426.110 (5) to (13) of the statutes are repealed.
426.110 (16) of the statutes is amended to read:
The administrator, whether or not a party to an action, shall bear 12
the costs of notice except that the administrator may recover such costs from the 13
defendant as provided in sub. (11)
628.46 (1) of the statutes is amended to read:
Unless otherwise provided by law, an insurer shall promptly pay 16
every insurance claim. A claim shall be overdue if not paid within 30 days after the 17
insurer is furnished written notice of the fact of a covered loss and of the amount of 18
the loss. If such written notice is not furnished to the insurer as to the entire claim, 19
any partial amount supported by written notice is overdue if not paid within 30 days 20
after such written notice is furnished to the insurer. Any part or all of the remainder 21
of the claim that is subsequently supported by written notice is overdue if not paid 22
within 30 days after written notice is furnished to the insurer. Any payment shall 23
not be deemed overdue when the insurer has reasonable proof to establish that the 24
insurer is not responsible for the payment, notwithstanding that written notice has 25
been furnished to the insurer. For the purpose of calculating the extent to which any
claim is overdue, payment shall be treated as being made on the date a draft or other 2
valid instrument which is equivalent to payment was placed in the U.S. mail in a 3
properly addressed, postpaid envelope, or, if not so posted, on the date of delivery. 4
All overdue payments shall bear simple interest at the annual bank prime loan
rate 5of 12 percent per year as reported by the federal reserve board in federal reserve
6statistical release H. 15 in effect on January 1 of the year in which the insurer is
7furnished written notice of the fact of a covered loss, plus 1 percent
801.01 (2) of the statutes is amended to read:
801.01 (2) Scope.
Chapters 801 to 847 govern procedure and practice in circuit 10
courts of this state in all civil actions and special proceedings whether cognizable as 11
cases at law, in equity or of statutory origin except where different procedure is 12
prescribed by statute or rule. Chapters 801 to 847 shall be construed
13and employed by the court and the parties
to secure the just, speedy and inexpensive 14
determination of every action and proceeding.
802.06 (1) of the statutes is renumbered 802.06 (1) (a).
802.06 (1) (b) of the statutes is created to read:
(b) Upon the filing of a motion to dismiss under sub. (2) (a) 6., a 18
motion for judgment on the pleadings under sub. (3), or a motion for more definite 19
statement under sub. (5), all discovery and other proceedings shall be stayed during 20
the pendency of the motion unless the court finds good cause upon the motion of any 21
party that particularized discovery is necessary.
803.08 (1) of the statutes, as affected by Supreme Court Order 23
15-06, is renumbered 803.08 (1) (intro.) and amended to read:
803.08 (1) Class actions may be maintained action prerequisites.
(intro.) 25When the question before the court is one of a common or general interest of many
1persons or when the parties are very numerous and it may be impracticable to bring
2them all before the court, one One
members of a class
may sue or defend for
3the benefit of the whole, except that no claim may be maintained against the state
4or any other party under this section if the relief sought includes the refund of or
5damages associated with a tax administered by the state. be sued as representative
6parties on behalf of all members only if all of the following apply:
803.08 (1) (a) to (e) of the statutes are created to read:
(a) The class is so numerous that joinder of all members is 9
(b) There are questions of law or fact common to the class.
(c) The claims or defenses and type and scope of injury of the representative 12
parties are typical of the claims or defenses and type and scope of injury of the class.
(d) The representative parties will fairly and adequately protect the interests 14
of the class.
(e) The members of the class are objectively verifiable by reliable and feasible 16
means without individual testimony from putative class members and without 17
substantial administrative burden.
803.08 (2) of the statutes, as created by Supreme Court Order 19
15-06, is renumbered 803.08 (11).
803.08 (3) to (10) of the statutes are created to read:
803.08 (3) Types of class actions.
A class action may be maintained if sub. (1) 22
is satisfied and if the court finds that any of the following applies:
(a) Prosecuting separate actions by or against individual class members would 24
create a risk of one of the following:
1. Inconsistent or varying adjudications with respect to individual class 2
members that would establish incompatible standards of conduct for the party 3
opposing the class.