Bill > A00804

This bill enacts the Consumer Litigation Funding Act, which establishes comprehensive regulations for third-party litigation financing in New York. The legislation aims to protect consumers by creating strict guidelines for companies that provide legal funding, including mandatory contract requirements, disclosure provisions, and consumer protections. Key provisions include: requiring clear, easy-to-understand contracts with no hidden fees; mandating a 10-day right of rescission for consumers; prohibiting funding companies from making decisions about legal claims or paying referral fees; limiting maximum charges to 25% of gross proceeds; requiring registration and annual reporting by funding companies; and ensuring that repayment is based on a predetermined amount rather than a percentage of legal claim recovery. The bill also specifies that funding is non-recourse, meaning consumers are only obligated to repay funds from successful legal claims, and establishes penalties for companies that violate the regulations. The act will take effect 180 days after becoming law and will not apply to litigation funding agreements made before its effective date.

Budget and Finance, Business and Industry, Housing and Urban Affairs

https://www.nysenate.gov/legislation/bills/2025/A804