N.Y. FIS Law § 1003 — New York Code / Act FIS / Article 10 / Section 1003
Prohibitions and charge limitations
Status: in_force

§ 1003. Prohibitions and charge limitations. Litigation funding\ncompanies shall be prohibited from:\n  (a) paying or offering to pay commissions, referral fees, or any other\nform of consideration to any attorney, law firm, medical provider,\nchiropractor or physical therapist or any of their employees for\nreferring a consumer to the company;\n  (b) accepting any commissions, referral fees, rebates or any other\nform of consideration from an attorney, law firm, medical provider,\nchiropractor or physical therapist or any of their employees;\n  (c) advertising materially false or misleading information regarding\nits products or services;\n  (d) referring a customer or potential customer to a specific attorney,\nlaw firm, medical provider, chiropractor or physical therapist or any of\ntheir employees; provided, however, if a customer needs legal\nrepresentation, the company may refer the customer to a local or state\nbar association referral service;\n  (e) knowingly providing funding to a consumer who has previously\nsigned a litigation funding contract with a another litigation funding\ncompany for the same claim without first acquiring or extinguishing the\nconsumer's obligations pursuant to the prior litigation funding\ncontract, provided that nothing herein shall prohibit multiple companies\nfrom agreeing to contemporaneously provide funding to a consumer\nprovided that the consumer and the consumer's attorney consent to the\narrangement in writing as long as the interest held by those litigation\nfunding companies, in aggregate, does not exceed the funded amount plus\ntwenty-five percent of the proceeds of the consumer's legal claim;\n  (f) influencing or attempting to influence any decisions with respect\nto the conduct of the consumer's legal claim or any settlement or\nresolution thereof. The right to make such decisions shall remain solely\nwith the consumer and the consumer's attorney in the legal claim;\n  (g) obtaining a waiver of any remedy or right by the consumer,\nincluding but not limited to the right to trial by jury;\n  (h) knowingly paying or offering to pay for court costs, filing fees\nor attorney's fees either during or after the resolution of the legal\nclaim, using funds from the litigation funding transaction;\n  (i) entering into a litigation funding contract with a consumer who\nthe litigation funding company knows is represented by an attorney or\nlaw firm in the legal claim that has a financial interest in the\nlitigation funding company offering litigation funding to that consumer;\n  (j) requiring an attorney who represents a consumer to disclose\nprivileged information to the litigation funding company without the\nwritten consent of the consumer. The attorney who represents the\nconsumer shall disclose to the litigation funding company the amount of\nthe proceeds of the settlement, judgment, award or verdict;\n  (k) requiring a consumer to pay charges that exceed twenty-five\npercent of the gross proceeds from the applicable legal claim plus the\nfunded amount;\n  (l) requiring a consumer to pay anything that exceeds the available\nproceeds from a resolution of the consumer's claim;\n  (m) providing more than five hundred thousand dollars to a consumer to\nfund litigation; and\n  (n) entering into a litigation funding contract with a consumer if the\nlitigation funding company has any reasonable basis to believe that the\nconsumer's legal claim is frivolous, based on a false statement of facts\nor otherwise that it is not meritorious.\n