Vermont Statutes Title 8 Sec. 2254
Terms Used In Vermont Statutes Title 8 Sec. 2254
- company: means a person that provides consumer litigation funding to a consumer. See
- Consumer: means a natural person who is seeking or has obtained consumer litigation funding for a pending legal claim, provided:
- contract: means a contract between a company and a consumer for the provision of consumer litigation funding. See
- Contract: A legal written agreement that becomes binding when signed.
- Fees: shall mean earnings due for official services, aside from salaries or per diem compensation. See
- following: when used by way of reference to a section of the law shall mean the next preceding or following section. See
- funding: means a nonrecourse transaction in which a company purchases and a consumer assigns to the company a contingent right to receive an amount of the potential net proceeds of a settlement or judgment obtained from the consumer's legal claim. See
- Litigation: A case, controversy, or lawsuit. Participants (plaintiffs and defendants) in lawsuits are called litigants.
- Net proceeds: means the amount recovered by a consumer as a result of a legal claim less costs associated with the legal claim or the underlying events giving rise to the legal claim, including:
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
- Trial: A hearing that takes place when the defendant pleads "not guilty" and witnesses are required to come to court to give evidence.
- Uniform Commercial Code: A set of statutes enacted by the various states to provide consistency among the states' commercial laws. It includes negotiable instruments, sales, stock transfers, trust and warehouse receipts, and bills of lading. Source: OCC
§ 2254. Prohibited acts
(a) A consumer litigation funding company shall not engage in any of the following conduct or practices:
(1) Pay or offer to pay commissions, referral fees, or any other form of consideration to any attorney, law firm, health care provider, health care facility, or an employee of a law firm, health care provider, or health care facility for referring a consumer to the company.
(2) Accept any commissions, referral fees, or any other form of consideration from any attorney, law firm, health care provider, health care facility, or an employee of a law firm, health care provider, or health care facility.
(3) Advertise false or misleading information regarding its products or services.
(4) Receive any right to nor make any decisions with respect to the conduct of the consumer’s legal claim or any settlement or resolution. The right to make such decisions shall remain solely with the consumer and his or her attorney.
(5) Knowingly pay or offer to pay for court costs, filing fees, or attorney’s fees either during or after the resolution of the legal claim.
(6) Refer a consumer to a specific attorney, law firm, health care provider, or health care facility.
(7) Fail to provide promptly copies of contract documents to the consumer or to the consumer’s attorney.
(8) Obtain a waiver of any remedy the consumer might otherwise have against the company.
(9) Provide legal advice to the consumer regarding the funding or the underlying legal claim.
(10) Assign a contract in whole or in part to a third party. Provided, however, if the company retains responsibility for collecting payment, administering, and otherwise enforcing the consumer litigation funding contract, the prohibition in this subdivision (10) shall not apply to an assignment:
(A) to a wholly owned subsidiary of the company;
(B) to an affiliate of the company that is under common control with the company; or
(C) granting a security interest under Article 9 of the Uniform Commercial Code or as otherwise permitted by law.
(11) Report a consumer to a credit reporting agency if insufficient funds remain from the net proceeds to repay the company.
(12) Require binding arbitration in the event of a dispute between the consumer and the company. A consumer has the right to a trial in the event of a contractual dispute.
(b) An attorney or law firm retained by a consumer shall not have a financial interest in a company offering litigation funding to the consumer and shall not receive a referral fee or other consideration from such company, its employees, or its affiliates. (Added 2015, No. 128 (Adj. Sess.), § A.1.)