New York § 1005 - 1005Disclosures

§ 1005. 1005Disclosures

§ 1005. Disclosures. All litigation funding contracts shall contain the disclosures specified in this section, which shall constitute material terms of the contract. Unless otherwise specified, such disclosures shall be typed in at least twelve point bold type font and be placed clearly and conspicuously within the contract, as follows: (a) On the front page under appropriate headings, language specifying: (i) the funded amount; (ii) an itemization of all charges; (iii) a payment schedule to help consumers understand how much they will have to pay in charges based on different hypothetical resolutions of the consumer's legal claim; and (iv) the following statement in at least twelve point type font: "The maximum amount you may be required to pay cannot exceed 25% of the gross recovered amount received for your claim plus the amount paid to you by the litigation funding company, but only to the extent that there are proceeds available from your legal claim." (b) Within the body of the contract in at least twelve point type font: "Consumer's right to cancellation: you may cancel this contract without penalty or further obligation within ten business days after the date you receive the payment from the litigation funding company if you return to the litigation funding company the full amount of the disbursed funds." (c) Within the body of the contract, an explanation that the litigation funding company shall have no role in deciding whether, when and how much the legal claim is settled for, however, the consumer and consumer's attorney must notify the company of the outcome of the legal claim by settlement or adjudication prior to paying the company from the proceeds of any settlement, judgment, award or verdict that may be paid to resolve that consumer's legal claim. The company may seek updated information about the status of the legal claim but in no event shall the company interfere with the independent professional judgment of the attorney in the handling of the legal claim or any settlement thereof. (d) Within the body of the contract, in all capital letters in at least twelve point bold type font contained within a box: "THE AGREED UPON CHARGES SHALL BE PAID ONLY FROM ANY PROCEEDS OF YOUR LEGAL CLAIM, AND SHALL BE PAID ONLY TO THE EXTENT THAT THERE ARE AVAILABLE PROCEEDS FROM YOUR LEGAL CLAIM. YOU WILL NOT OWE (INSERT NAME OF THE LITIGATION FUNDING COMPANY) ANYTHING IF THERE ARE NO PROCEEDS FROM YOUR LEGAL CLAIM, UNLESS YOU HAVE VIOLATED ANY MATERIAL TERM OF THIS CONTRACT OR YOU HAVE COMMITTED FRAUD AGAINST (INSERT NAME OF LITIGATION FUNDING COMPANY)." (e) Located immediately above the place on the contract where the consumer's signature is required, in twelve point bold type font: "Do not sign this contract before you read it completely. Do not sign this contract if it contains any blank spaces. You are entitled to a completely filled-in copy of the contract before you sign this contract. Depending on the circumstances, you may want to consult a tax, public or private benefits planning, or financial professional. You acknowledge that your attorney in the legal claim has provided no tax, public or private benefit planning, or financial advice regarding this contract. You further acknowledge that your attorney has explained the terms and conditions of the litigation funding contract." (f) A copy of the executed contract shall promptly be delivered to the attorney for the consumer. (g) The following shall be printed within the body of the contract in all capital letters in at least twelve point bold type font: "PURSUANT TO THE LAWS OF THE STATE OF NEW YORK, THE MAXIMUM AMOUNT YOU MAY BE REQUIRED TO PAY CANNOT EXCEED 25% OF THE GROSS RECOVERED AMOUNT RECEIVED FOR YOUR CLAIM PLUS THE AMOUNT PAID TO YOU BY THE LITIGATION FUNDING COMPANY."