25-3303 Contracts for nonrecourse civil litigation funding; right to cancel; notice; statements required. - Nebraska Statutes

25-3303. Contracts for nonrecourse civil litigationfunding; right to cancel; notice; statements required.(1) All contracts for nonrecourse civillitigation funding shall comply with the following requirements:(a) The contractshall be completely filled in and contain on the front page, appropriatelyheaded and in at least twelve-point bold type, the following disclosures:(i) The totaldollar amount to be funded to the consumer;(ii) An itemization of one-time fees;(iii) The totaldollar amount to be repaid by the consumer, in six-month intervals for thirty-sixmonths, and including all fees;(iv) The total dollar amount in broker feesthat are involved in the transaction; and(v) The annual percentage rate of return,calculated as of the last day of each six-month interval, including frequencyof compounding;(b) The contract shall provide that the consumer may cancel thecontract within five business days following the consumer's receipt of fundswithout penalty or further obligation. The contract shall contain the followingnotice written in a clear and conspicuous manner: "CONSUMER'S RIGHT TO CANCELLATION:YOU MAY CANCEL THIS CONTRACT WITHOUT PENALTY OR FURTHER OBLIGATION WITHINFIVE BUSINESS DAYS FROM THE DATE YOU RECEIVE FUNDING FROM (insert name ofcivil litigation funding company)." The contract also shall specify that inorder for the cancellation to be effective, the consumer shall either returnthe full amount of disbursed funds to the civil litigation funding companyby delivering the civil litigation funding company's uncashed check to thecivil litigation funding company's offices in person, within five businessdays after the disbursement of funds, or mail a notice of cancellation andinclude in that mailing a return of the full amount of disbursed funds inthe form of the civil litigation funding company's uncashed check or a registeredor certified check or money order, by insured, registered, or certified UnitedStates mail, postmarked within five business days after receiving funds fromthe civil litigation funding company, to the address specified in the contractfor the cancellation;(c) The contract shall contain the following statement in at leasttwelve-point boldface type: "THE CIVIL LITIGATION FUNDING COMPANY AGREES THATIT SHALL HAVE NO RIGHT TO AND WILL NOT MAKE ANY DECISIONS WITH RESPECT TOTHE CONDUCT OF THE UNDERLYING LEGAL CLAIM OR ANY SETTLEMENT OR RESOLUTIONTHEREOF AND THAT THE RIGHT TO MAKE THOSE DECISIONS REMAINS SOLELY WITH YOUAND YOUR ATTORNEY IN THE LEGAL CLAIM.";(d) The contract shall contain an acknowledgementby the consumer that such consumer has reviewed the contract in its entirety;(e) The contractshall contain the following statement in at least twelve-point boldface typelocated immediately above the place on the contract where the consumer's signatureis required: "DO NOT SIGN THIS CONTRACT BEFORE YOU READ IT COMPLETELY OR IFIT CONTAINS ANY BLANK SPACES. YOU ARE ENTITLED TO A COMPLETELY FILLED IN COPYOF THIS CONTRACT. BEFORE YOU SIGN THIS CONTRACT YOU SHOULD OBTAIN THE ADVICEOF AN ATTORNEY. DEPENDING ON THE CIRCUMSTANCES, YOU MAY WANT TO CONSULT ATAX, PUBLIC OR PRIVATE BENEFIT PLANNING, OR FINANCIAL PROFESSIONAL. YOU ACKNOWLEDGETHAT YOUR ATTORNEY IN THE LEGAL CLAIM HAS PROVIDED NO TAX, PUBLIC OR PRIVATEBENEFIT PLANNING, OR FINANCIAL ADVICE REGARDING THIS TRANSACTION.";(f) The contractshall contain a written acknowledgment by the attorney representing the consumerin the legal claim that states all of the following:(i) The attorney representingthe consumer in the legal claim has reviewed the contract and all costs andfees have been disclosed including the annualized rate of return applied tocalculate the amount to be paid by the consumer;(ii) The attorney representingthe consumer in the legal claim is being paid on a contingency basis per awritten fee agreement;(iii) All proceeds of the civil litigation will be disbursed viathe trust account of the attorney representing the consumer in the legal claimor a settlement fund established to receive the proceeds of the civil litigationfrom the defendant on behalf of the consumer;(iv) The attorney representingthe consumer in the legal claim is following the written instructions of theconsumer with regard to the nonrecourse civil litigation funding;(v) The attorneyrepresenting the consumer in the legal claim shall not be paid or offeredto be paid commissions or referral fees; and(vi) Whether the attorneyrepresenting the consumer in the legal claim does or does not have a financialinterest in the civil litigation funding company; and(g) All contracts to theconsumer shall have in plain language, in a box with bold fifteen-point fontstating the following in capitalized letters: "IF THERE IS NO RECOVERY OFANY MONEY FROM YOUR LEGAL CLAIM OR IF THERE IS NOT ENOUGH MONEY TO PAY THECIVIL LITIGATION FUNDING COMPANY BACK IN FULL, YOU WILL NOT OWE THE CIVILLITIGATION FUNDING COMPANY ANYTHING IN EXCESS OF YOUR RECOVERY UNLESS YOUHAVE VIOLATED THIS PURCHASE AGREEMENT.".(2) If a dispute arises between the consumerand the civil litigation funding company concerning the contract for nonrecoursecivil litigation funding, the responsibilities of the attorney representingthe consumer in the legal claim shall be no greater than the attorney's responsibilitiesunder the Nebraska Rules of Professional Conduct. SourceLaws 2010, LB1094, § 3.Effective Date: July 15, 2010