Bill > S01104

This bill enacts the Consumer Litigation Funding Act to establish comprehensive regulations for third-party litigation financing in New York. The bill defines consumer litigation funding as a non-recourse financial transaction where a funding company purchases a contingent right to a portion of a legal claim's potential proceeds. Key provisions include mandatory contract requirements such as clear language, a right of rescission within 10 business days, and specific disclosure obligations. The bill prohibits funding companies from interfering with legal claims, paying referral fees, or making settlement decisions. It caps maximum charges at 25% of gross proceeds and requires funding companies to register with the state, pay registration fees, and submit annual reports. The legislation aims to protect consumers by ensuring transparency, limiting predatory practices, and requiring attorney acknowledgment of the funding terms. Importantly, the bill mandates that repayment is based on predetermined amounts tied to time intervals, not a percentage of recovery, and emphasizes that consumers are only obligated to repay from legal claim proceeds unless they commit fraud or materially breach the contract. The act will take effect 180 days after becoming law and will not retroactively apply to existing litigation funding agreements.

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https://www.nysenate.gov/legislation/bills/2025/S1104