Bill Text: NY A05410 | 2011-2012 | General Assembly | Introduced
Bill Title: Sets forth requirements for non-recourse civil litigation advance contracts: in writing, disclose amounts to be advanced to the consumer; provides itemization of one-time fees; requires total dollar amount to be repaid by the consumer to the company; provides for cancellation provisions; requires initials of consumer agreeing to such contract on each page; provides attorney disclosures.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2011-04-20 - enacting clause stricken [A05410 Detail]
Download: New_York-2011-A05410-Introduced.html
S T A T E O F N E W Y O R K
________________________________________________________________________
5410
2011-2012 Regular Sessions
I N A S S E M B L Y
February 18, 2011
___________
Introduced by M. of A. TOWNS -- read once and referred to the Committee
on Judiciary
AN ACT to amend the general obligations law, in relation to the regu-
lation of non-recourse civil litigation advance contracts
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
1 Section 1. Article 5 of the general obligations law is amended by
2 adding a new title 8 to read as follows:
3 TITLE 8
4 NON-RECOURSE CIVIL LITIGATION ADVANCE CONTRACTS
5 SECTION 5-801. NON-RECOURSE CIVIL LITIGATION ADVANCE CONTRACTS.
6 S 5-801. NON-RECOURSE CIVIL LITIGATION ADVANCE CONTRACTS. 1. AS USED
7 IN THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:
8 (A) "NON-RECOURSE CIVIL LITIGATION ADVANCE" MEANS A TRANSACTION OR
9 AGREEMENT WHEREIN A COMPANY MAKES A PAYMENT OF MONEY TO A CONSUMER WHO
10 EITHER HAS COMMENCED IN THE MANNER PROVIDED BY LAW, OR MAY COMMENCE A
11 CIVIL ACTION OR PROCEEDING FOR MONEY DAMAGES BEFORE A COURT OF COMPETENT
12 JURISDICTION IN THIS STATE, IN EXCHANGE FOR THE RIGHT TO COLLECT MONIES
13 DUE PURSUANT TO THE TERMS OF THE CONTRACT BETWEEN THE CONSUMER AND THE
14 COMPANY.
15 (B) "COMPANY" MEANS ANY PERSON, PARTNERSHIP, CORPORATION OR OTHER
16 BUSINESS ENTITY WHICH ENTERS INTO A NON-RECOURSE CIVIL LITIGATION
17 ADVANCE TRANSACTION CONTRACT WITH A CONSUMER.
18 (C) "CONSUMER" MEANS A PERSON OR ENTITY WHO IS BOTH (I) REPRESENTED BY
19 AN ATTORNEY ADMITTED TO PRACTICE IN THIS STATE AT THE TIME OF ANY
20 CONTRACT ENTERED INTO WITH A COMPANY; AND (II) HAS COMMENCED, IN THE
21 MANNER PROVIDED BY LAW, OR MAY COMMENCE A CIVIL ACTION OR PROCEEDING FOR
22 MONEY DAMAGES BEFORE A COURT OF COMPETENT JURISDICTION IN THIS STATE, IN
23 EXCHANGE FOR THE RIGHT TO COLLECT MONIES DUE PURSUANT TO THE TERMS OF
24 THE CONTRACT BETWEEN A CONSUMER AND THE COMPANY.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD09617-01-1
A. 5410 2
1 2. ON AND AFTER THE EFFECTIVE DATE OF THIS SECTION, ALL CONTRACTS
2 ENTERED INTO FOR A NON-RECOURSE CIVIL LITIGATION ADVANCE SHALL COMPLY
3 WITH SECTION 5-702 OF THIS CHAPTER, AS WELL AS THE FOLLOWING REQUIRE-
4 MENTS:
5 (A) ALL CONTRACTS SHALL BE COMPLETELY FILLED IN AND CONTAIN THE
6 FOLLOWING DISCLOSURES ON THE FRONT PAGE IN AT LEAST TWELVE-POINT BOLD
7 TYPE, APPROPRIATELY HEADED:
8 (I) THE TOTAL DOLLAR AMOUNT TO BE ADVANCED TO THE CONSUMER;
9 (II) AN ITEMIZATION OF ANY ONE-TIME FEES BROKEN OUT ITEM BY ITEM (E.G.
10 APPLICATION, PROCESSING, ATTORNEY REVIEW, BROKER OR SIMILAR CHARGES);
11 (III) THE TOTAL DOLLAR AMOUNT TO BE REPAID TO THE COMPANY BY THE
12 CONSUMER, IN SIX-MONTH INTERVALS FOR THIRTY-SIX MONTHS, AND INCLUDING
13 ALL FEES AS WELL AS ANY MINIMUM MONTHLY REQUIRED PAYMENT AMOUNT; AND
14 (IV) THE PERCENTAGE FEE OR RATE OF RETURN, STATED ON AN ANNUALIZED
15 BASIS, INCLUDING FREQUENCY OF COMPOUNDING.
16 (B) THE CONTRACT SHALL PROVIDE THAT THE CONSUMER MAY CANCEL THE
17 CONTRACT WITHIN FIVE BUSINESS DAYS FOLLOWING THE CONSUMER'S RECEIPT OF
18 FUNDS, WITHOUT PENALTY OR FURTHER OBLIGATION. THE CONTRACT SHALL CONTAIN
19 THE FOLLOWING NOTICE WRITTEN IN A CLEAR AND CONSPICUOUS MANNER, ALSO IN
20 AT LEAST TWELVE-POINT BOLDFACE TYPE: "CONSUMER'S RIGHT TO CANCELLATION:
21 YOU MAY CANCEL THIS CONTRACT WITHOUT PENALTY OR FURTHER OBLIGATION WITH-
22 IN FIVE BUSINESS DAYS FROM THE DATE YOU RECEIVE FUNDING FROM (INSERT
23 NAME OF COMPANY).". THE CONTRACT ALSO SHALL SPECIFY THAT IN ORDER FOR
24 THE CANCELLATION TO BE EFFECTIVE, THE CONSUMER MUST EITHER RETURN TO THE
25 COMPANY THE FULL AMOUNT OF DISBURSED FUNDS BY DELIVERING THE COMPANY'S
26 UNCASHED CHECK TO THE OFFICE ADDRESS OF THE COMPANY, WITHIN FIVE BUSI-
27 NESS DAYS OF THE DISBURSEMENT OF FUNDS, OR MAIL A NOTICE OF CANCELLATION
28 AND INCLUDE IN THAT MAILING A RETURN OF THE FULL AMOUNT OF DISBURSED
29 FUNDS IN THE FORM OF THE COMPANY'S CHECK, OR A REGISTERED OR CERTIFIED
30 CHECK OR MONEY ORDER, BY INSURED, REGISTERED OR CERTIFIED UNITED STATES
31 MAIL, POSTMARKED WITHIN FIVE BUSINESS DAYS OF RECEIVING FUNDS FROM THE
32 COMPANY, AT THE ADDRESS SPECIFIED IN THE CONTRACT FOR SUCH CANCELLATION.
33 (C) THE CONTRACT SHALL ADDITIONALLY CONTAIN THE FOLLOWING STATEMENT IN
34 AT LEAST TWELVE-POINT BOLDFACE TYPE: "THE COMPANY AGREES THAT IT SHALL
35 HAVE NO RIGHT TO AND WILL NOT MAKE ANY DECISIONS WITH RESPECT TO THE
36 CONDUCT OF THE UNDERLYING CIVIL ACTION OR CLAIM OR ANY SETTLEMENT OR
37 RESOLUTION THEREOF AND THAT THE RIGHT TO MAKE SUCH DECISIONS REMAIN
38 SOLELY WITH THE CONSUMER AND THE CONSUMER'S ATTORNEY."
39 (D) THE CONTRACT SHALL CONTAIN THE INITIALS OF THE CONSUMER ON EACH
40 PAGE.
41 (E) THE CONTRACT SHALL ALSO CONTAIN THE FOLLOWING STATEMENT IN AT
42 LEAST TWELVE-POINT BOLDFACE TYPE LOCATED IMMEDIATELY ABOVE THE PLACE ON
43 THE CONTRACT WHERE THE CONSUMER'S SIGNATURE IS REQUIRED: "DO NOT SIGN
44 THIS CONTRACT BEFORE YOU READ IT COMPLETELY OR IF IT CONTAINS ANY BLANK
45 SPACES. BEFORE YOU SIGN THIS CONTRACT YOU SHOULD OBTAIN THE ADVICE OF
46 YOUR ATTORNEY. YOU ARE ENTITLED TO A COMPLETELY FILLED IN COPY OF THIS
47 CONTRACT. DEPENDING ON YOUR CIRCUMSTANCES, YOU MAY WANT TO CONSULT A TAX
48 BENEFIT PLANNING AND/OR A FINANCIAL PROFESSIONAL."
49 (F) THE CONTRACT SHALL CONTAIN A WRITTEN CERTIFICATION BY THE CONSUM-
50 ER'S ATTORNEY OF RECORD THAT HE OR SHE HAS RECEIVED THE CONTRACT AND
51 EXPLAINED TO THE CONSUMER ITS TERMS, INCLUDING THE ANNUALIZED RATE OF
52 RETURN APPLIED TO CALCULATE THE AMOUNT TO BE PAID BY THE CONSUMER.
53 (G) FOR FRENCH AND SPANISH SPEAKING CONSUMERS, THE CONTRACT SHALL ALSO
54 BE WRITTEN IN THE SAME LANGUAGE IN WHICH THE TERMS HAVE BEEN DISCUSSED,
55 AS BETWEEN THE COMPANY AND THE CONSUMER. FOR CONSUMERS WHOSE PRIMARY
56 LANGUAGE IS NEITHER ENGLISH, FRENCH, NOR SPANISH, THE PRINCIPAL TERMS OF
A. 5410 3
1 THE CONTRACT SHALL BE TRANSLATED IN WRITING INTO THE CONSUMER'S NATIVE
2 LANGUAGE; THE CONSUMER AND THE COMPANY SHALL SIGN THE TRANSLATED DOCU-
3 MENT, AND THE TRANSLATOR SHALL SIGN A NOTARIZED AFFIDAVIT OR AFFIRMATION
4 CONFIRMING THAT THE TERMS OF THE CONTRACT HAVE BEEN PRESENTED TO THE
5 CONSUMER IN THE CONSUMER'S NATIVE LANGUAGE AND ACKNOWLEDGED BY THE
6 CONSUMER, IN WRITING.
7 S 2. This act shall take effect on the ninetieth day after it shall
8 have become a law.
