For New York’s Litigation Funders, Reducing Deal Risk Is Tricky

Reid Skibell and Joseph Gallagher of Glenn Agre Bergman & Fuentes examine a New York appellate ruling that voided a litigation funding agreement as usurious because its repayment guarantees effectively eliminated the funder’s risk, warning that contractual protections allowing recovery independent of litigation outcomes can cause funding arrangements to be reclassified as loans subject to state interest rate caps, particularly in light of New York’s new Consumer Litigation Funding Act.

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