Persuasive advocacy by Big I New York paid off with Governor Kathy Hochul’s signature on legislation strengthening consumer protections for third-party litigation financing (TPLF) agreements.
The bill passed earlier this year made important strides toward bringing TPLF out of the shadows. However, it stopped short of requiring disclosure of these agreements during legal proceedings. As a condition of approving the legislation, Governor Hochul negotiated a chapter amendment with the Legislature to “make clear, among other things, the required disclosures and contractual right/duties …"
Big I New York worked closely with the Governor’s office, bill sponsors, legislative leaders, and other industry partners to urge inclusion of the disclosure language requiring greater transparency for courts and all parties involved. While we’re seeking greater clarity on the exact agreement, it is encouraging that the Governor was compelled to negotiate the bill further.
Beyond disclosure, the law establishes:
- Strong consumer protections, including a 25% cap on the amount a litigation funding company may recover from claim proceeds.
- Mandatory contract disclosures.
- Clear statements of one-time charges; and
- A ten-day right to cancel a TPLF agreement, among other safeguards.
The law also:
- Requires TPLF companies to register with the state.
- Prohibits commissions or referral fees between attorneys, medical providers, and funders.
- Bars funders from influencing legal strategy or decisions; and
- Prohibits attorneys from holding a financial interest in a consumer lending company used by their client.
Big I New York will continue to advocate for additional sunlight on the role TPLF plays in driving up litigation costs in New York. This legislation sets a high bar for Congress and other states considering stronger oversight of litigation funders.
We thank Governor Hochul, State Senator Jeremy Cooney, and Assembly Member William Magnarelli for their leadership and will work with them to strengthen TPLF disclosure and transparency as warranted. We are also grateful to the hundreds of Big I New York members who advocated for this issue through legislative breakfasts, in-district meetings, hearings, roundtables, and calls-to-action in support of meaningful TPLF reform.
Learn more:
- In May Big I New York hosted a TPLF webinar featuring Wes Bissett from Big “I", Tom Stebbins from the Lawsuit Reform Alliance of New York, and Travis Wattie from Big I New York.
- VIDEO: What is Third Party Litigation Funding & Why Should You Care?