Legislation

* § 1003. Prohibitions and charge limitations. Litigation funding
companies shall be prohibited from:

(a) paying or offering to pay commissions, referral fees, or any other
form of consideration to any attorney, law firm, medical provider,
chiropractor or physical therapist or any of their employees for
referring a consumer to the company;

(b) accepting any commissions, referral fees, rebates or any other
form of consideration from an attorney, law firm, medical provider,
chiropractor or physical therapist or any of their employees;

(c) advertising materially false or misleading information regarding
its products or services;

(d) referring a customer or potential customer to a specific attorney,
law firm, medical provider, chiropractor or physical therapist or any of
their employees; provided, however, if a customer needs legal
representation, the company may refer the customer to a local or state
bar association referral service;

(e) knowingly providing funding to a consumer who has previously
signed a litigation funding contract with a another litigation funding
company for the same claim without first acquiring or extinguishing the
consumer's obligations pursuant to the prior litigation funding
contract, provided that nothing herein shall prohibit multiple companies
from agreeing to contemporaneously provide funding to a consumer
provided that the consumer and the consumer's attorney consent to the
arrangement in writing as long as the interest held by those litigation
funding companies, in aggregate, does not exceed the funded amount plus
twenty-five percent of the proceeds of the consumer's legal claim;

(f) influencing or attempting to influence any decisions with respect
to the conduct of the consumer's legal claim or any settlement or
resolution thereof. The right to make such decisions shall remain solely
with the consumer and the consumer's attorney in the legal claim;

(g) obtaining a waiver of any remedy or right by the consumer,
including but not limited to the right to trial by jury;

(h) knowingly paying or offering to pay for court costs, filing fees
or attorney's fees either during or after the resolution of the legal
claim, using funds from the litigation funding transaction;

(i) entering into a litigation funding contract with a consumer who
the litigation funding company knows is represented by an attorney or
law firm in the legal claim that has a financial interest in the
litigation funding company offering litigation funding to that consumer;

(j) requiring an attorney who represents a consumer to disclose
privileged information to the litigation funding company without the
written consent of the consumer. The attorney who represents the
consumer shall disclose to the litigation funding company the amount of
the proceeds of the settlement, judgment, award or verdict;

(k) requiring a consumer to pay charges that exceed twenty-five
percent of the gross proceeds from the applicable legal claim plus the
funded amount;

(l) requiring a consumer to pay anything that exceeds the available
proceeds from a resolution of the consumer's claim;

(m) providing more than five hundred thousand dollars to a consumer to
fund litigation; and

(n) entering into a litigation funding contract with a consumer if the
litigation funding company has any reasonable basis to believe that the
consumer's legal claim is frivolous, based on a false statement of facts
or otherwise that it is not meritorious.

* NB Effective June 17, 2026