§ 6250. — 6250. (Added by Stats. 2025, Ch. 565, Sec. 3.)

California § 6250.

• Jurisdiction: California
• Code BPC: Business and Professions Code - BPC
• Div. 3.: DIVISION 3. PROFESSIONS AND VOCATIONS GENERALLY
• Ch. 4.: CHAPTER 4. Attorneys
• Art. 17.: ARTICLE 17. The California Consumer Legal Funding Act

Text

(a)
“Charges” means the amount of money to be paid to the consumer legal funding company by or on behalf of the consumer, above the funded amount provided by or on behalf of the company to a California consumer pursuant to this article. Charges include all administrative, origination, underwriting, or other fees, including interest, no matter how denominated. Those charges shall not exceed 36 months from the funding date.
(b)
“Consumer” means a natural person who has a pending legal claim and who resides or is domiciled in California.
(c)
“Consumer legal funding” means a nonrecourse transaction in
which a consumer legal funding company purchases and a consumer assigns to the company a contingent right to receive an amount of the potential proceeds of a settlement, judgment, award, or verdict obtained in the consumer’s legal claim.
(d)
“Consumer legal funding company” means a person or entity that enters into a consumer legal funding contract with a consumer. A consumer legal company shall not include any of the following:
(1)
An immediate family member of the consumer.
(2)
A bank, lender, or other special purpose entity that is engaged in either of the following:
(A)
Provides financing to a consumer legal funding company.
(B)
Receives a security interest or transfer of rights from a consumer legal funding company.
(3)
An attorney or accountant who provides services to a consumer.
(e)
“Funded amount” means the amount of moneys provided to, or on behalf of, the consumer through a transaction meeting the definition of consumer legal funding.
(f)
“Funding date” means the date on which the funded amount is transferred to the consumer by the consumer legal funding company either by personal delivery, wire, automated clearing house, or other electronic means, or mailed by insured, certified, or registered United States mail.
(g)
“Immediate family member” means a parent,
sibling, child by blood, adoption, or marriage, spouse, domestic partner, cohabitant, stepchild, immediate in-law, aunt, uncle, first cousin, grandparent, or grandchild.
(h)
“Legal claim” means a bona fide civil claim or cause of action.
(i)
“Resolution date” means the date the funded amount, plus the agreed upon charges, are delivered to the consumer legal funding company by the consumer or the consumer’s attorney.
(j)
Nothing in this article shall apply to support legal services rendered to an attorney regarding the legal claim.

Legislative History

Added by Stats. 2025, Ch. 565, Sec. 3. (AB 931) Effective January 1, 2026.