New York § 1003 - 1003Prohibitions and charge limitations

§ 1003. 1003Prohibitions and charge limitations

§ 1003. Prohibitions and charge limitations. Litigation funding companies shall be prohibited from: (a) paying or offering to pay commissions, referral fees, or any other form of consideration to any attorney, law firm, medical provider, chiropractor or physical therapist or any of their employees for referring a consumer to the company; (b) accepting any commissions, referral fees, rebates or any other form of consideration from an attorney, law firm, medical provider, chiropractor or physical therapist or any of their employees; (c) advertising materially false or misleading information regarding its products or services; (d) referring a customer or potential customer to a specific attorney, law firm, medical provider, chiropractor or physical therapist or any of their employees; provided, however, if a customer needs legal representation, the company may refer the customer to a local or state bar association referral service; (e) knowingly providing funding to a consumer who has previously signed a litigation funding contract with a another litigation funding company for the same claim without first acquiring or extinguishing the consumer's obligations pursuant to the prior litigation funding contract, provided that nothing herein shall prohibit multiple companies from agreeing to contemporaneously provide funding to a consumer provided that the consumer and the consumer's attorney consent to the arrangement in writing as long as the interest held by those litigation funding companies, in aggregate, does not exceed the funded amount plus twenty-five percent of the proceeds of the consumer's legal claim; (f) influencing or attempting to influence any decisions with respect to the conduct of the consumer's legal claim or any settlement or resolution thereof. The right to make such decisions shall remain solely with the consumer and the consumer's attorney in the legal claim; (g) obtaining a waiver of any remedy or right by the consumer, including but not limited to the right to trial by jury; (h) knowingly paying or offering to pay for court costs, filing fees or attorney's fees either during or after the resolution of the legal claim, using funds from the litigation funding transaction; (i) entering into a litigation funding contract with a consumer who the litigation funding company knows is represented by an attorney or law firm in the legal claim that has a financial interest in the litigation funding company offering litigation funding to that consumer; (j) requiring an attorney who represents a consumer to disclose privileged information to the litigation funding company without the written consent of the consumer. The attorney who represents the consumer shall disclose to the litigation funding company the amount of the proceeds of the settlement, judgment, award or verdict; (k) requiring a consumer to pay charges that exceed twenty-five percent of the gross proceeds from the applicable legal claim plus the funded amount; (l) requiring a consumer to pay anything that exceeds the available proceeds from a resolution of the consumer's claim; (m) providing more than five hundred thousand dollars to a consumer to fund litigation; and (n) entering into a litigation funding contract with a consumer if the litigation funding company has any reasonable basis to believe that the consumer's legal claim is frivolous, based on a false statement of facts or otherwise that it is not meritorious.