DEFINITIONS.

As used in this act:

1. "Administrator" means the Administrator of Consumer Credit;

2. "Advertise" means to publish or disseminate a written, electronic, or printed communication, or to publish, disseminate, circulate, or place directly or indirectly before the public a communication by means of a recorded telephone message or a communication transmitted on radio, television, the Internet, or similar communications media, including film strips, motion pictures, and videos, for the purpose of inducing a person to enter into a consumer litigation funding agreement;

3. "Charge" or "charges" means the amount paid to a consumer litigation funder by or on behalf of the consumer, in addition to the funded amount provided by or on behalf of the funder to a consumer. The term includes an administrative fee, origination fee, underwriting fee, and other fees, regardless of how the fee is denominated, and any amounts denominated as interest;

4. "Consumer" means an individual who has a pending legal claim and who:

a.resides in this state, or

b.has a legal claim in this state;

5. "Consumer litigation funder" or "funder" means a person that enters into a consumer litigation funding agreement with a consumer. The term does not include:

a.an attorney who, at the time money is provided to or on behalf of a consumer under a consumer litigation funding agreement, has an attorney-client relationship with the consumer concerning the consumer's legal claim,

b.an accountant who provides accounting services to the consumer, or

c.an immediate family member of the consumer;

6. "Consumer litigation funding agreement" means an agreement:

a.under which money is provided to or on behalf of a consumer by a consumer litigation funder for a purpose other than prosecuting the consumer's legal claim, and

b.the repayment of the money is in accordance with a litigation funding transaction the terms of which are included as part of the consumer litigation funding agreement;

7. "Funded amount" means the amount provided to or on behalf of the consumer under a consumer litigation funding agreement. The term does not include a charge;

8. "Funding date" means the date on which the consumer litigation funder:

a.transfers the funded amount to the consumer by personal delivery or by wire, ACH debit, or other electronic means, or

b.mails the funded amount to the consumer by insured, certified, or registered United States mail;

9. "Immediate family member" means:

a.a parent, sibling, spouse, grandparent, or grandchild of an individual, or

b.a child related by blood, adoption, or marriage to an individual;

10. "Legal claim" includes:

a.a civil action,

b.an alternative dispute resolution proceeding, or

c.an administrative proceeding before an agency of this state, except for workers' compensation claims, which are not assignable;

11. "Litigation funding transaction" means a non-recourse transaction in which a consumer litigation funder purchases, and a consumer assigns to the funder, a contingent right to receive an amount of the potential proceeds of a settlement, judgment, award, or verdict obtained in the consumer's legal claim; and

12. "Resolution date" means the date on which the sum of the amount funded to the consumer and the agreed to charges is delivered to the consumer litigation funder.

Added by Laws 2013, c. 386, § 1, eff. Nov. 1, 2013.

NOTE: Editorially renumbered from Title 14A, § 3-701 to avoid a duplication in numbering.