2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 74 - Consumer Litigation Funding Companies › § 2253. Contracts; disclosures and requirements

§ 2253. Contracts; disclosures and requirements
(a) A contract shall be written in a clear and coherent manner using words with common, everyday meanings to enable the average consumer who makes a reasonable effort under ordinary circumstances to read and understand the terms of the contract without having to obtain the assistance of a professional.
(b) Each contract shall include consumer disclosures on the front page. The consumer disclosures shall be in a form prescribed by the Commissioner and shall include:
(1) a description of possible alternatives to a litigation funding contract, including secured or unsecured personal loans, and life insurance policies;
(2) notification that some or all of the funded amount may be taxable;
(3) a description of the consumer’s right of rescission;
(4) the total funded amount provided to the consumer under the contract;
(5) an itemization of charges;
(6) the annual percentage rate of return;
(7) the total amount due from the consumer, including charges, if repayment is made any time after the funding contract is executed;
(8) a statement that there are no fees or charges to be paid by the consumer other than what is disclosed on the disclosure form;
(9) in the event the consumer seeks more than one litigation funding contract, a disclosure providing the cumulative amount due from the consumer for all transactions, including charges under all contracts, if repayment is made any time after the contracts are executed;
(10) a statement that the company has no right to make any decisions regarding the conduct of the legal claim or any settlement or resolution thereof and that the right to make such decisions remains solely with the consumer and his or her attorney;
(11) a statement that, if there is no recovery of any money from the consumer’s legal claim, the consumer shall owe nothing to the company and that, if the net proceeds of the claim are insufficient to repay the consumer’s indebtedness to the company, then the consumer shall owe the company no money in excess of the net proceeds; and
(12) any other statements or disclosures deemed necessary or appropriate by the Commissioner.
(c) Each contract shall include the following provisions:
(1) Definitions of the terms “consumer,” “consumer litigation funding,” and “consumer litigation funding company.”
(2) A right of rescission, allowing the consumer to cancel the contract without penalty or further obligation if, within five business days following the execution of the contract or the consumer’s receipt of any portion of the funded amount, the consumer gives notice of the rescission to the company and returns any funds provided to the consumer by the company.
(3) A provision specifying that, in the event of litigation involving the contract and at the election of the consumer, venue shall lie in the Vermont Superior Court for the county where the consumer resides.
(4) An acknowledgment that the consumer is represented by an attorney in the legal claim and has had an opportunity to discuss the contract with his or her attorney. (Added 2015, No. 128 (Adj. Sess.), § A.1.)