§ 6252. — 6252. (Added by Stats. 2025, Ch. 565, Sec. 3.)

(a)
All contracts for a consumer legal funding transaction shall disclose material terms to the consumer, including, but not limited to, all of the following:
(1)
Clear and conspicuous language, on the first page of the contract, detailing all of the following:
(A)
The funded amount to be paid to the consumer by the consumer legal funding company upon the completion of litigation.
(B)
An itemization of any one-time charges.
(C)
The maximum total amount to be assigned by the consumer to
the consumer litigation funding company, including the funded amount and all charges.
(D)
A repayment schedule, including the dates in which all payments are due to the consumer litigation funding company.
(2)
A disclosure stating, “Consumer’s right to cancellation: You may cancel this contract without penalty or further obligation within five business days after the funding date if you return to the consumer legal funding company the full amount of the disbursed funds.”
(3)
(A)
A disclosure stating that the consumer legal funding company shall have no role in deciding whether, when, or for what dollar amount a legal claim may be settled.
(B)
Notwithstanding subparagraph (A), the consumer legal funding company may seek updated information about the status of the legal claim.
(b)
All contracts for a consumer legal funding transaction shall require the consumer or the consumer’s attorney to notify the consumer legal funding company of the outcome of the legal claim, including, but not limited to, all settlements, verdicts, or other means of dispute resolution.

Legislative History

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