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NY S08006

Bill

Official Source

Status

Engrossed

6/18/2016

Primary Sponsor

Robert Ortt

Click for details

Origin

Senate

2015-2016 General Assembly

AI Summary

  • Creates Article 39-H in General Business Law to regulate consumer litigation funding companies that provide non-recourse loans to consumers contingent on settlement, judgment, or award proceeds
  • Requires contracts to include: 10 business day rescission right with full refund, attorney written acknowledgment of contingency fee arrangement without referral fees, itemized fee structure with percentage charges, and prepayment option without penalty
  • Prohibits litigation funding companies from paying referral fees to medical providers, therapists, or attorneys; obtaining waivers of consumer remedies; requiring arbitration or jury trial waivers; or assigning contracts
  • Caps charges at the rate prescribed in Banking Law Section 14-a, with excess charges considered usurious under General Obligations Law Section 5-501
  • Requires consumer litigation funding companies to register with the Department of Financial Services with $500 initial fee and biennial renewal by September 30; violations result in forfeiture of funded amount and fees for that case

Legislative Description

Establishes contract requirements for third party litigation financing which includes requiring contracts to contain a right of rescission, a written acknowledgement by the attorney retained, a clear outline of the scheduled fee structure and a no penalty provision.

Last Action

referred to ways and means

6/17/2016

Committee Referrals

Rules6/17/2016
Consumer Affairs and Protection6/3/2016

Full Bill Text

No bill text available