Section 436.554

Title XXVIII CONTRACTS AND CONTRACTUAL RELATIONS

Chapter 436

Effective - 28 Aug 2023   

  436.554.  Contract requirements. — 1.  All consumer legal funding contracts shall meet the following requirements:

  (1)  The contract shall be completely filled in when presented to the consumer for signature;

  (2)  The contract shall contain, in bold and boxed type, a right of rescission allowing the consumer to cancel the contract without penalty or further obligation if, within ten business days after the funding date, the consumer either:

  (a)  Returns the full amount of the disbursed funds to the consumer legal funding company by delivering the company's uncashed check to the company's office in person; or

  (b)  Mails a notice of cancellation by insured, certified, or registered United States mail to the address specified in the contract and includes a return of the full amount of disbursed funds in such mailing in the form of the company's uncashed check or a registered or certified check or money order;

  (3)  The contract shall contain the initials of the consumer on each page; and

  (4)  The contract shall require the consumer to give nonrevocable written direction to the consumer's attorney requiring the attorney to notify the consumer legal funding company when the legal claim has been resolved.  Once the consumer legal funding company confirms in writing the amount due under the contract, the consumer's attorney shall pay, from the proceeds of the resolution of the legal claim, the consumer legal funding company the amount due within ten business days.

  2.  The consumer legal funding company shall provide the consumer's attorney with a written notification of the consumer legal funding contract provided to the consumer within three business days of the funding date by way of postal mail, courier service, facsimile, or other means of proof of delivery method.

  3.  A consumer legal funding contract shall be entered into only if the contract involves an existing legal claim in which the consumer is represented by an attorney.

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(L. 2023 S.B. 103)