Tennessee § 47-16-104 - Requirements for litigation financing transactions.

§ 47-16-104. Requirements for litigation financing transactions.

A litigation financier shall fulfill each of the following requirements when engaged in litigation financing: The terms of the litigation financing transaction shall be set forth in a written contract that is completely filled-in with no incomplete sections when the contract is offered or presented to the consumer; The litigation financing contract shall contain a right of rescission, allowing the consumer to cancel the litigation financing contract without penalty or further obligation if, within five (5) business days following the consumer's receipt of the funds or goods, or execution of the litigation financing contract, whichever is later, the consumer gives notice of the rescission and returns any money or goods already provided to the consumer by the litigation financier; The litigation financing contract shall contain a written acknowledgment by the consumer of whether the consumer is represented by an attorney in the dispute; If the consumer acknowledges that the consumer is represented by an attorney in the dispute, the litigation financing contract shall include a written acknowledgment executed by the consumer's attorney in the dispute in which the attorney acknowledges all of the following: The attorney has had the opportunity to review the litigation financing contract on behalf of the consumer; Whether the attorney is being paid on a contingency basis pursuant to a written fee agreement; That all proceeds of the legal claim shall be disbursed by either the trust account of the attorney representing the consumer in the dispute or a settlement fund established to receive the proceeds of the dispute from the defendant on behalf of the consumer; The attorney is representing the consumer with regard to the dispute that is the subject of the litigation financing contract; and The attorney has neither received nor paid a referral fee or any other consideration from or to the litigation financier, nor will the attorney in the future; and In the event that proceeds are paid into a settlement fund or trust, the litigation financier shall notify the administrator of the fund or trust of any outstanding liens arising from the litigation financing contract. Acts 2014, ch. 819, § 1. Compiler's Notes. Pursuant to Article III, Section 18 of the Constitution of Tennessee, Acts 2014, ch. 819 took effect on April 28, 2014, for the purpose of promulgating rules. Effective Dates. Acts 2014, ch. 819, § 3. July 1, 2014; provided that for the purpose of promulgating rules, the act took effect April 28, 2014. [See the Compiler's Note.]