§ 899-EEE — Prohibitions and charge limitations

New York § 899-EEE

• Jurisdiction: New York
• Law GBS: General Business
• Art. 39-H: Third Party Litigation Financing

Text

* § 899-eee. Prohibitions and charge limitations. 1. Consumer\nlitigation funding companies shall be prohibited from:\n (a) paying or offering to pay commissions, referral fees, or other\nforms of consideration to any attorney, law firm, medical provider,\nchiropractor or physical therapist or any of their employees for\nreferring a consumer to the company;\n (b) accepting any commissions, referral fees, rebates or other forms\nof consideration from an attorney, law firm, medical provider,\nchiropractor or physical therapist or any of their employees;\n (c) intentionally advertising materially false or misleading\ninformation regarding its products or services;\n (d) referring, in furtherance of an initial legal funding, a customer\nor potential customer to a specific attorney, law firm, medical\nprovider, chiropractor or physical therapist or any of their employees;\nprovided, however, if a customer needs legal representation, the company\nmay refer the customer to a local or state bar association referral\nservice;\n (e) knowingly providing funding to a consumer who has previously\nassigned and/or sold a portion of the consumer's right to proceeds from\ntheir legal claim without first making payment to and/or purchasing a\nprior unsatisfied consumer litigation funding company's entire funded\namount and contracted charges, unless a lesser amount is otherwise\nagreed to in writing by the consumer litigation funding companies,\nexcept that multiple companies may agree to contemporaneously provide\nfunding to a consumer provided that the consumer and the consumer's\nattorney consent to the arrangement in writing;\n (f) receiving any right to, or making, any decisions with respect to\nthe conduct of the underlying legal claim or any settlement or\nresolution thereof. The right to make such decisions shall remain solely\nwith the consumer and the attorney in the legal claim;\n (g) attempting to obtain a waiver of any remedy or right by the\nconsumer, including but not limited to the right to trial by jury; and\n (h) knowingly paying or offering to pay for court costs, filing fees\nor attorney's fees either during or after the resolution of the legal\nclaim, using funds from the consumer litigation funding transaction.\n 2. An attorney or law firm retained by the consumer in the legal claim\nshall not have a financial interest in the consumer litigation funding\ncompany offering consumer litigation funding to that consumer.\n 3. Any attorney who has referred the consumer to their retained\nattorney shall not have a financial interest in the consumer litigation\nfunding company offering consumer litigation funding to that consumer.\n 4. The attorney may only disclose privileged information to the\nconsumer litigation funding company with the written consent of the\nconsumer.\n 5. Provided the consumer's attorney or the consumer provides the\nconsumer litigation funding company with an attestation disclosing the\nfinal amount of the gross proceeds from the claim, the maximum allowable\ncharges shall not exceed twenty-five percent of the gross proceeds from\nthe applicable legal claim, regardless of the funded amount provided for\nthe relevant claim.\n * NB Effective June 17, 2026\n