Back in 2017, New York State Assembly members introduced a bill that would mandate certain consumer protections concerning the arrangement and engagement of litigation funding agreements. Each legislative session since has seen a new version of the Consumer Litigation Funding Act debated by New York legislators. On May 3, 2022, a new draft of the Act was amended and recommitted to the Consumer Affairs and Protection committee for debate.
Does Consumer Legal Funding Put Consumers in Debt?
Back in 2017, New York State Assembly members introduced a bill that would mandate certain consumer protections concerning the arrangement and engagement of litigation funding agreements. Each legislative session since has seen a new version of the Consumer Litigation Funding Act debated by New York legislators. On May 3, 2022, a new draft of the Act was amended and recommitted to the Consumer Affairs and Protection committee for debate.
According to New York State Assembly Bill A1270A’s summary, the Act would promote consumer litigation finance protections by regulating contractual mandates as part of New York State law. For example, the proposed Act would stipulate that claimants hold rights to ‘prepay’ the funded amount before their case is settled, without penalty.
The Consumer Litigation Funding Act would be a game changer for the New York State legal scene. Special interest groups are sure to be lobbying both sides of the Act’s debate.
Litigation Finance Journal will continue reporting on the Act’s progress through the New York State legislature.
