S1 E57 NY Hits Back on Litigation Funding

Send us Fan MailThis Deep Dive looks at the strong move taken by New York with their recent  Consumer Litigation Funding Act.  This is a proposed New York law designed to regulate the third-party financing industry by establishing strict consumer protections and oversight. Under this bill, companies that provide cash advances to plaintiffs in exchange for a portion of their legal settlements must register with the state and adhere to mandatory licensing and reporting standards. The legislation mandates transparent contract terms, including a ten-day right of rescission and a cap on total charges at 25% of the gross recovery. To preserve the integrity of the legal process, the act prohibits referral fees between funders and attorneys while ensuring that lawyers maintain exclusive control over legal strategy and settlement decisions. Violations of these rules may result in the forfeiture of all fees and significant civil penalties.Support the show