Bill > S08808

This bill amends existing law to establish comprehensive regulations for litigation funding, which is defined as providing up to $500,000 to a consumer in exchange for a portion of potential legal claim proceeds. The bill mandates specific contract requirements, including clear language, a ten-day rescission period, and detailed disclosures about charges, which are defined as anything paid to the litigation funding company, including interest and the funded amount. It also prohibits litigation funding companies from paying referral fees to attorneys or medical providers, influencing legal decisions, or advertising misleading information, and limits the total charges to 25% of the gross proceeds plus the funded amount. Furthermore, litigation funding companies must register with the state, pay a $500 fee, and submit annual reports detailing their activities, with violations potentially leading to waived charges and civil penalties. The bill also clarifies that attorney-client privilege is not waived by communications between attorneys and litigation funders, and that only attorney's liens or statutory liens take priority over a litigation funder's lien. Importantly, the bill repeals a previous article related to consumer litigation funding and creates a new article within the financial services law to govern these contracts and companies, with registration and reporting requirements taking effect one year after enactment.

https://www.nysenate.gov/legislation/bills/2025/S8808