Legislation

* § 1005. Disclosures. All litigation funding contracts shall contain
the disclosures specified in this section, which shall constitute
material terms of the contract. Unless otherwise specified, such
disclosures shall be typed in at least twelve point bold type font and
be placed clearly and conspicuously within the contract, as follows:

(a) On the front page under appropriate headings, language specifying:

(i) the funded amount;

(ii) an itemization of all charges;

(iii) a payment schedule to help consumers understand how much they
will have to pay in charges based on different hypothetical resolutions
of the consumer's legal claim; and

(iv) the following statement in at least twelve point type font: "The
maximum amount you may be required to pay cannot exceed 25% of the gross
recovered amount received for your claim plus the amount paid to you by
the litigation funding company, but only to the extent that there are
proceeds available from your legal claim."

(b) Within the body of the contract in at least twelve point type
font: "Consumer's right to cancellation: you may cancel this contract
without penalty or further obligation within ten business days after the
date you receive the payment from the litigation funding company if you
return to the litigation funding company the full amount of the
disbursed funds."

(c) Within the body of the contract, an explanation that the
litigation funding company shall have no role in deciding whether, when
and how much the legal claim is settled for, however, the consumer and
consumer's attorney must notify the company of the outcome of the legal
claim by settlement or adjudication prior to paying the company from the
proceeds of any settlement, judgment, award or verdict that may be paid
to resolve that consumer's legal claim. The company may seek updated
information about the status of the legal claim but in no event shall
the company interfere with the independent professional judgment of the
attorney in the handling of the legal claim or any settlement thereof.

(d) Within the body of the contract, in all capital letters in at
least twelve point bold type font contained within a box: "THE AGREED
UPON CHARGES SHALL BE PAID ONLY FROM ANY PROCEEDS OF YOUR LEGAL CLAIM,
AND SHALL BE PAID ONLY TO THE EXTENT THAT THERE ARE AVAILABLE PROCEEDS
FROM YOUR LEGAL CLAIM. YOU WILL NOT OWE (INSERT NAME OF THE LITIGATION
FUNDING COMPANY) ANYTHING IF THERE ARE NO PROCEEDS FROM YOUR LEGAL
CLAIM, UNLESS YOU HAVE VIOLATED ANY MATERIAL TERM OF THIS CONTRACT OR
YOU HAVE COMMITTED FRAUD AGAINST (INSERT NAME OF LITIGATION FUNDING
COMPANY)."

(e) Located immediately above the place on the contract where the
consumer's signature is required, in twelve point bold type font: "Do
not sign this contract before you read it completely. Do not sign this
contract if it contains any blank spaces. You are entitled to a
completely filled-in copy of the contract before you sign this contract.
Depending on the circumstances, you may want to consult a tax, public or
private benefits planning, or financial professional. You acknowledge
that your attorney in the legal claim has provided no tax, public or
private benefit planning, or financial advice regarding this contract.
You further acknowledge that your attorney has explained the terms and
conditions of the litigation funding contract."

(f) A copy of the executed contract shall promptly be delivered to the
attorney for the consumer.

(g) The following shall be printed within the body of the contract in
all capital letters in at least twelve point bold type font: "PURSUANT
TO THE LAWS OF THE STATE OF NEW YORK, THE MAXIMUM AMOUNT YOU MAY BE
REQUIRED TO PAY CANNOT EXCEED 25% OF THE GROSS RECOVERED AMOUNT RECEIVED
FOR YOUR CLAIM PLUS THE AMOUNT PAID TO YOU BY THE LITIGATION FUNDING
COMPANY."

* NB Effective June 17, 2026