The Vermont Statutes Online
The Vermont Statutes Online have been updated to include the actions of the 2023 session of the General Assembly.
NOTE: The Vermont Statutes Online is an unofficial copy of the Vermont Statutes Annotated that is provided as a convenience.
Title 8 : Banking and Insurance
Chapter 074 : Consumer Litigation Funding Companies
(Cite as: 8 V.S.A. § 2254)-
§ 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.)
