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Bill

A 240

Provides for protections regarding consumer litigation funding

2025 Regular Session Introduced by William Colton and 3 co-sponsors

A 240 protects consumers who use third-party litigation funding by ensuring disclosures, fair terms, and safeguards against predatory or abusive funding.

REFERRED TO CONSUMER AFFAIRS AND PROTECTION
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Bill Summary · A 240

Summary of Bill A 240 — Provides for protections regarding consumer litigation funding

Bill at a glance

  • Bill number: A 240
  • Title: Provides for protections regarding consumer litigation funding
  • Status: Referred to the Consumer Affairs and Protection committee
  • Introduced: January 8, 2025
  • Primary sponsor: Erik Dilan
  • Cosponsors: Kwani O’Pharrow, William Colton, Karines Reyes
  • Related bills: A 8966, A 3228, A 3315, A 2702, A 6827 (prior-session); S 3666 (companion)

Purpose and scope

A 240 is designed to establish protections for consumers who obtain funding for litigation from third-party funders. While the full text is not provided here, the bill’s title indicates an emphasis on safeguarding consumers in litigation-funding arrangements, aiming to promote transparency, fair terms, and safeguards against predatory or abusive practices.

Potential provisions (subject to the bill’s actual text)

Note: The following categories reflect common elements in litigation-funding protection measures. The exact provisions of A 240 should be consulted when the bill text is available.

  • Disclosures and transparency: Requirements for funders to disclose terms, costs, repayment structures, and potential effects on settlement outcomes.
  • Licensing and conduct: Possible licensing or registration for litigation funders and standards of practice to prevent abusive behavior.
  • Fees and terms: Possible limits or prohibitions on certain fee structures, interest, or non-dischargeable costs.
  • Consumer protections: Provisions to protect plaintiffs from coercive or exploitative funding terms and to ensure informed consent.
  • Relationship with counsel and litigation strategy: Safeguards to prevent funders from interfering with counsel choices or court strategy.
  • Regulatory oversight and enforcement: Mechanisms for enforcement, penalties for violations, and processes for complaints.

Who would be affected

  • Consumers/potential plaintiffs who use third-party litigation funding
  • Litigation funders and financing entities
  • Attorneys and law firms that engage with funded cases
  • Courts that may review funding arrangements as part of case proceedings

Procedural and timeline notes

  • Introduced and referred to the Consumer Affairs and Protection committee on January 8, 2025.
  • The bill’s progress beyond referral (e.g., hearings, amendments, passage) is not provided here.
  • Related/companion measures in both houses (e.g., S 3666) suggest coordinated consideration with potential cross-chamber alignment.

Key takeaways for readers

  • A 240 signals a legislative focus on protecting consumers who rely on third-party funding for litigation.
  • The exact protections, limitations, and enforcement mechanisms will depend on the final bill text and any amendments during committee review.
  • Stakeholders to watch include consumer advocates, plaintiffs who pursue funded suits, litigation funders, and legal practitioners involved in funded litigation.
  • For up-to-date details, review the bill text and subsequent committee actions once published.

Compiled from official sources — confirm details with the bill’s official record.

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