New York A 240: Provides for protections regarding consumer litigation funding

Bill Text

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A00240 Summary:

BILL NOA00240 

&nbsp

SAME ASSAME AS S03666

&nbsp

SPONSORDilan

&nbsp

COSPNSRColton, Reyes

&nbsp

MLTSPNSR

&nbsp

Add Art 39-H §§899-aaaa - 899-kkkk, Gen Bus L

&nbsp

Establishes that consumer litigation funding transactions should be subject to state regulation and sets forth requirements regarding disclosure, licensing, funding company and attorney responsibilities and limitations, violations and other provisions.

Go to top A00240 Actions:

BILL NOA00240 

&nbsp

01/08/2025referred to consumer affairs and protection

01/07/2026referred to consumer affairs and protection

Go to topA00240 Committee&nbspVotes:

Go to topA00240 Floor&nbspVotes:

There are no Assembly votes for this bill in this legislative session.

Go to topA00240 Text:

 STATE OF NEW YORK
 ________________________________________________________________________

 240

 2025-2026 Regular Sessions

 IN ASSEMBLY

 (Prefiled)

 January 8, 2025
 ___________

 Introduced by M. of A. DILAN -- read once and referred to the Committee
 on Consumer Affairs and Protection

 AN ACT to amend the general business law, in relation to consumer liti-
 gation funding

 The People of the State of New York, represented in Senate and Assem-
 bly, do enact as follows:

 1 Section 1. Short title. This act shall be known and may be cited as
 2 the "consumer litigation funding act".
 3 § 2. Legislative intent. In an effort to promote consumer protections
 4 related to consumer litigation funding transactions, this act estab-
 5 lishes that such transactions should be subject to state regulation and
 6 sets forth requirements regarding disclosure, licensing, funding company
 7 and attorney responsibilities and limitations, violations and other
 8 items.
 9 § 3. The general business law is amended by adding a new article 39-H
 10 to read as follows:
 11 ARTICLE 39-H
 12 CONSUMER LITIGATION FINANCING
 13 Section 899-aaaa. Definitions.
 14 899-bbbb. Contract requirements; right of rescission.
 15 899-cccc. Prohibitions.
 16 899-dddd. Contracted amounts.
 17 899-eeee. Disclosures.
 18 899-ffff. Violations.
 19 899-gggg. Assignability; liens.
 20 899-hhhh. Effect of communication on privileges.
 21 899-iiii. Registration.
 22 899-jjjj. Reporting.
 23 899-kkkk. Severability.

 EXPLANATION--Matter in italics (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD01347-01-5

 A. 240 2

 1 § 899-aaaa. Definitions. As used in this article, the following terms
 2 shall have the following meanings:
 3 1. "Advertise" means publishing or disseminating any written, aural,
 4 electronic or printed communication or any communication by means of
 5 recorded telephone messages or transmitted or broadcast on radio, tele-
 6 vision, the internet or similar communications media, including audio
 7 recordings, film strips, motion pictures and videos, published, dissem-
 8 inated, circulated or placed before the public, directly or indirectly,
 9 for the purpose of inducing a consumer to enter into a consumer liti-
 10 gation funding.
 11 2. "Charges" means the amount of money to be paid to the consumer
 12 litigation funding company by or on behalf of the consumer, above the
 13 funded amount provided by or on behalf of the company to a New York
 14 consumer pursuant to this article. Charges include all administrative,
 15 origination, underwriting or other fees no matter how denominated.
 16 3. "Consumer litigation funding" means a non-recourse transaction in
 17 which a consumer litigation funding company purchases and a consumer
 18 assigns to the company a contingent right to receive an amount of the
 19 potential proceeds of a settlement, judgment, award, or verdict obtained
 20 in the consumer's legal claim.
 21 4. "Consumer litigation funding company" or "company" means a person
 22 or entity that enters into a consumer litigation funding with a consum-
 23 er. This term shall not include:
 24 (a) an immediate family member of the consumer;
 25 (b) a bank, lender, financing entity, or other special purpose entity:
 26 (i) that provides financing to a consumer litigation funding company;
 27 or
 28 (ii) to which a consumer litigation funding company grants a security
 29 interest or transfers any rights or interest in a consumer litigation
 30 funding; or
 31 (c) an attorney or accountant wh