Bill would decrease personal injury statute of limitations

The Judiciary Committee heard testimony Feb. 5 on a bill that would reduce the Nebraska statute of limitations for personal injury actions from four years to two.

LB199, introduced by Elkhorn Sen. Tony Sorrentino, also would require disclosure of any nonrecourse civil litigation financing contracts, which are agreements between a plaintiff and a third party that provide funds to cover the plaintiff’s legal expenses in exchange for a share of the settlement.

Under the bill, a consumer or their attorney would be required to disclose and provide a copy of any contract for civil litigation funding to:
● each party to the legal claim or their attorney;
● any court, agency or tribunal in which the legal claim is pending; and
● any known person, including an insurer, with a preexisting contractual obligation to reimburse or defend a party to the legal claim.

Sorrentino said LB199 would align Nebraska with most other states, 26 of which have adopted a two-year statute of limitations. Doing so would encourage timely claims and reduce the risk of lost documents or fading memories, he said, which can affect fairness in legal proceedings.

“[A] long statute of limitations can leave businesses and individuals in a state of prolonged uncertainty about a potential lawsuit,” Sorrentino said. “The goal is to achieve faster resolution of disputes, enabling parties to move forward without lingering legal risk.”

Additionally, he said, LB199 would promote transparency by requiring the disclosure of nonrecourse civil litigation financing agreements, which have become increasingly common.

“The problem with this practice is [that] once third-party funding is involved, a case is no longer just about compensation for the injured plaintiff but also about profit for the financier,” Sorrentino said.

Korby Gilbertson testified in support of the bill on behalf of the American Property Casualty Insurance Association and the Nebraska Insurance Federation.

The use of civil litigation financing has ballooned, Gilbertson said, with the industry grossing $19 billion annually. The use of litigation funding has the potential to raise the overall cost of litigation and the cost of insurance, she said.

Kent Grisham, president of the Nebraska Trucking Association, also supported the measure. Statutes of limitations ensure that disputes brought to court are resolved promptly, he said, preventing cases from being litigated long after witnesses’ memories fade or evidence deteriorates.

“Statutes of limitations do not deny justice,” Grisham said. “They encourage timely justice where plaintiffs receive appropriate restitution and defendants do not have to live with years of uncertainty.”

Jennifer Turco Meyer testified in opposition to the bill on behalf of the Nebraska Association of Trial Attorneys. She noted that 24 states have a statute of limitations of more than two years, while others, such as Colorado and Kentucky, have a two-year statute of limitations with the possibility of longer for motor vehicle accidents.

LB199 is a solution in search of a problem, Turco Meyer said.

“We’re not hearing anything about Nebraska cases,” she said. “We’re not hearing about how this is affecting Nebraska’s judicial system.”

Representing the Alliance for Responsible Consumer Legal Funding, Eric Schuller also opposed the measure, citing the bill’s disclosure requirements.

Some states require individuals to disclose civil litigation financing only upon request, Schuller said. That method is more equitable than requiring automatic disclosure, he said, because individuals who are not using litigation financing are not obligated to reveal their legal payment methods.

“It’s the same thing as saying you have to automatically, as soon as you file a lawsuit, turn over your bank account [or] turn over your credit card statements,” Schuller said.

The committee took no immediate action on LB199.