Bill > A09442

This bill amends existing law to establish comprehensive regulations for litigation funding, which is when a company provides money to a consumer for a legal claim in exchange for a portion of any potential settlement or judgment. The bill, titled the "litigation funding act," replaces previous legislation and introduces new requirements for litigation funding companies, including mandatory registration with the state and annual reporting on their activities. It also sets strict rules for litigation funding contracts, requiring clear disclosures to consumers about all charges, a right for consumers to cancel the contract within ten business days, and limitations on the total amount a company can charge, capped at the funded amount plus twenty-five percent of the gross proceeds from the legal claim. The bill prohibits various practices by litigation funding companies, such as paying referral fees to attorneys or medical providers, influencing legal decisions, or advertising false information. It also clarifies that communications between a consumer's attorney and the funding company do not waive attorney-client privilege. The new regulations will take effect on a staggered basis, with registration and reporting requirements becoming effective one year after the bill becomes law.

Business and Industry, Housing and Urban Affairs

https://www.nysenate.gov/legislation/bills/2025/A9442