Bill Text: NY S00880 | 2009-2010 | General Assembly | Introduced

New York Senate Bill 880 (Prior Session Legislation)

Introduced

Bill Title: Prohibits the financing of a lawsuit for investment purposes, where the repayment of the financing is contingent upon success of the lawsuit; establishes that such financing shall be considered a loan and subject to the state usury laws.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2009-02-03 - RECOMMIT, ENACTING CLAUSE STRICKEN [S00880 Detail]

Download: New_York-2009-S00880-Introduced.html

                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                          880
                              2009-2010 Regular Sessions
                                   I N  S E N A T E
                                   January 21, 2009
                                      ___________
       Introduced  by  Sen.  KRUGER -- read twice and ordered printed, and when
         printed to be committed to the Committee on Judiciary
       AN ACT to amend the judiciary law,  in  relation  to  the  financing  of
         lawsuits
         THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section 1. The judiciary law is amended by adding a new  article  15-A
    2  to read as follows:
    3                                ARTICLE 15-A
    4                     FINANCING OF LAWSUIT BY THIRD PARTY
    5  SECTION 499-A. FINANCING OF LAWSUIT BY THIRD PARTY.
    6    S  499-A.  FINANCING  OF LAWSUIT BY THIRD PARTY. 1. THE FINANCING OF A
    7  LAWSUIT, BEFORE OR AFTER SUCH LAWSUIT HAS BEEN FILED, BY A PERSON, PART-
    8  NERSHIP, CORPORATION, FIRM OR OTHER THIRD PARTY FOR INVESTMENT WITH  THE
    9  EXPECTATION  OF  A  RETURN WHICH EXCEEDS THE USURY LAWS OF THIS STATE IN
   10  THE EVENT THE FINANCED PARTY PREVAILS AND WITHOUT THE EXPECTATION  OF  A
   11  RETURN IN THE EVENT THE FINANCED PARTY DOES NOT PREVAIL SHALL BE CONSID-
   12  ERED CHAMPERTOUS AND ILLEGAL UNDER THE LAWS OF THIS STATE.
   13    2.  ANY  FINANCING OF A LAWSUIT BY A THIRD PARTY SHALL BE CONSIDERED A
   14  LOAN AND SUBJECT TO SECTION 5-501 OF THE  GENERAL  OBLIGATIONS  LAW  AND
   15  WHERE  APPLICABLE,  THE  PROVISIONS OF ARTICLE ONE HUNDRED NINETY OF THE
   16  PENAL LAW RELATING TO CRIMINAL USURY.
   17    3. THIS SECTION SHALL IN NO WAY APPLY TO CONTINGENCY FEES THAT ARE  IN
   18  CONFORMANCE  WITH  THE  LAWS OF THIS STATE, INCLUDING BUT NOT LIMITED TO
   19  SECTION FOUR HUNDRED EIGHTY-EIGHT OF THIS CHAPTER.
   20    4. ANY VIOLATION OF THIS SECTION SHALL BE A MISDEMEANOR AND SUBJECT TO
   21  A FINE OF TWO THOUSAND FIVE HUNDRED DOLLARS PER VIOLATION.
   22    S 2. This act shall take effect immediately.
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD06557-01-9