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

Article 33: Nonrecourse Civil Litigation Act · Last amended 2010 · Last verified July 22, 2026

In one sentenceThis section spells out the disclosures, warnings, and acknowledgments a nonrecourse civil litigation funding contract must contain, including a five-business-day cancellation right, boldface independence and repayment statements, and a written acknowledgment from the consumer’s own attorney.

Full Text of § 25-3303

Text size

(1) All contracts for nonrecourse civil litigation funding shall comply with the following requirements:

(a) The contract shall be completely filled in and contain on the front page, appropriately headed and in at least twelve-point bold type, the following disclosures:

(i) The total dollar amount to be funded to the consumer;

(ii) An itemization of one-time fees;

(iii) The total dollar amount to be repaid by the consumer, in six-month intervals for thirty-six months, and including all fees;

(iv) The total dollar amount in broker fees that 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 frequency of compounding;

(b) The contract shall provide that the consumer may cancel the contract within five business days following the consumer's receipt of funds without penalty or further obligation. The contract shall contain the following notice written in a clear and conspicuous manner: "CONSUMER'S RIGHT TO CANCELLATION: YOU MAY CANCEL THIS CONTRACT WITHOUT PENALTY OR FURTHER OBLIGATION WITHIN FIVE BUSINESS DAYS FROM THE DATE YOU RECEIVE FUNDING FROM (insert name of civil litigation funding company)." The contract also shall specify that in order for the cancellation to be effective, the consumer shall either return the full amount of disbursed funds to the civil litigation funding company by delivering the civil litigation funding company's uncashed check to the civil litigation funding company's offices in person, within five business days after the disbursement of funds, or mail a notice of cancellation and include in that mailing a return of the full amount of disbursed funds in the form of the civil litigation funding company's uncashed check or a registered or certified check or money order, by insured, registered, or certified United States mail, postmarked within five business days after receiving funds from the civil litigation funding company, to the address specified in the contract for the cancellation;

(c) The contract shall contain the following statement in at least twelve-point boldface type: "THE CIVIL LITIGATION FUNDING COMPANY AGREES THAT IT SHALL HAVE NO RIGHT TO AND WILL NOT MAKE ANY DECISIONS WITH RESPECT TO THE CONDUCT OF THE UNDERLYING LEGAL CLAIM OR ANY SETTLEMENT OR RESOLUTION THEREOF AND THAT THE RIGHT TO MAKE THOSE DECISIONS REMAINS SOLELY WITH YOU AND YOUR ATTORNEY IN THE LEGAL CLAIM.";

(d) The contract shall contain an acknowledgment by the consumer that such consumer has reviewed the contract in its entirety;

(e) The contract shall contain the following statement in at least twelve-point boldface type located immediately above the place on the contract where the consumer's signature is required: "DO NOT SIGN THIS CONTRACT BEFORE YOU READ IT COMPLETELY OR IF IT CONTAINS ANY BLANK SPACES. YOU ARE ENTITLED TO A COMPLETELY FILLED IN COPY OF THIS CONTRACT. BEFORE YOU SIGN THIS CONTRACT YOU SHOULD OBTAIN THE ADVICE OF AN ATTORNEY. DEPENDING ON THE CIRCUMSTANCES, YOU MAY WANT TO CONSULT A TAX, PUBLIC OR PRIVATE BENEFIT PLANNING, OR FINANCIAL PROFESSIONAL. YOU ACKNOWLEDGE

THAT YOUR ATTORNEY IN THE LEGAL CLAIM HAS PROVIDED NO TAX, PUBLIC OR PRIVATE BENEFIT PLANNING, OR FINANCIAL ADVICE REGARDING THIS TRANSACTION.";

(f) The contract shall contain a written acknowledgment by the attorney representing the consumer in the legal claim that states all of the following:

(i) The attorney representing the consumer in the legal claim has reviewed the contract and all costs and fees have been disclosed including the annualized rate of return applied to calculate the amount to be paid by the consumer;

(ii) The attorney representing the consumer in the legal claim is being paid on a contingency basis per a written fee agreement;

(iii) All proceeds of the civil litigation will be disbursed via the trust account of the attorney representing the consumer in the legal claim or a settlement fund established to receive the proceeds of the civil litigation from the defendant on behalf of the consumer;

(iv) The attorney representing the consumer in the legal claim is following the written instructions of the consumer with regard to the nonrecourse civil litigation funding;

(v) The attorney representing the consumer in the legal claim shall not be paid or offered to be paid commissions or referral fees; and

(vi) Whether the attorney representing the consumer in the legal claim does or does not have a financial interest in the civil litigation funding company; and

(g) All contracts to the consumer shall have in plain language, in a box with bold fifteen-point font stating the following in capitalized letters: "IF THERE IS NO RECOVERY OF ANY MONEY FROM YOUR LEGAL CLAIM OR IF THERE IS NOT ENOUGH MONEY TO PAY THE CIVIL LITIGATION FUNDING COMPANY BACK IN FULL, YOU WILL NOT OWE THE CIVIL LITIGATION FUNDING COMPANY ANYTHING IN EXCESS OF YOUR RECOVERY UNLESS YOU HAVE VIOLATED THIS PURCHASE AGREEMENT.".

(2) If a dispute arises between the consumer and the civil litigation funding company concerning the contract for nonrecourse civil litigation funding, the responsibilities of the attorney representing the consumer in the legal claim shall be no greater than the attorney's responsibilities under the Nebraska Rules of Professional Conduct.

Source

Laws 2010, LB1094, § 3.

Plain-English Summary

Section 25-3303 is the act’s longest and most detailed provision, and it works by requiring a checklist of disclosures on the face of every funding contract. The front page must show, in at least twelve-point bold type, the total dollar amount funded, an itemization of one-time fees, the total the consumer will repay across six-month intervals up to thirty-six months, any broker fees involved, and the annualized percentage rate of return as of the end of each six-month interval. None of that can be buried in later pages or fine print.

The contract must also give the consumer five business days after receiving funds to cancel without penalty, spelled out in a specific notice, and must explain exactly how to cancel — by returning an uncashed check in person or by insured, registered, or certified mail postmarked within that window. A separate boldface statement must make clear that the funding company has no say over how the underlying claim is handled or settled; that decision stays with the consumer and the consumer’s attorney. Before the signature line, the contract must warn the consumer not to sign an incomplete contract, to get a filled-in copy, and to consider seeking legal, tax, or financial advice, while also confirming that the consumer’s litigation attorney has given no tax or benefit-planning advice about the funding itself.

The consumer’s own attorney has to sign a written acknowledgment covering six points: that the attorney reviewed the contract and all its costs, including the annualized rate; that the attorney is being paid on a contingency basis; that the litigation proceeds will move through the attorney’s trust account or a settlement fund; that the attorney is following the consumer’s written instructions about the funding; that the attorney is not being paid a commission or referral fee for the arrangement; and whether the attorney has a financial interest in the funding company. Finally, every contract must carry a large boxed statement, in bold fifteen-point type, guaranteeing the consumer will not owe the funding company more than the recovery unless the consumer broke the agreement — the core nonrecourse promise made explicit. If a dispute later arises between the consumer and the funding company, subsection (2) makes clear the attorney’s duties in that dispute go no further than what the Nebraska Rules of Professional Conduct already require.

Frequently Asked Questions

What financial terms does the contract have to disclose up front?

The total amount funded, an itemization of one-time fees, the total repayment amount broken into six-month intervals up to thirty-six months, any broker fees, and the annualized percentage rate of return, all in at least twelve-point bold type on the front page.

Can a consumer cancel a litigation funding contract after signing it?

Yes. The contract must give the consumer five business days after receiving the funds to cancel without penalty or further obligation, following the specific notice and return procedure the section requires.

Does the funding company get any say over how the lawsuit is settled?

No. The contract must state in bold type that the funding company has no right to make decisions about the claim or its settlement, and that those decisions stay with the consumer and the consumer’s attorney.

What must the consumer’s attorney certify in the contract?

That the attorney reviewed the contract and its costs, is paid on a contingency basis, will route proceeds through a trust account or settlement fund, is following the consumer’s written instructions, is not receiving a commission for the referral, and whether the attorney has a financial interest in the funding company.

What does the boxed statement about “no recovery” guarantee?

It guarantees that if the legal claim produces no money, or not enough to repay the funding company in full, the consumer owes nothing beyond the recovery, unless the consumer violated the agreement.

What happens if a dispute arises between the consumer and the funding company?

Subsection (2) provides that the attorney’s responsibilities in that dispute are no greater than what the Nebraska Rules of Professional Conduct already require of the attorney.

Source & verification. Section text and the amendment-history citation are reproduced verbatim from the Nebraska Legislature, Revisor of Statutes, enacted by the Nebraska Legislature. Last verified July 22, 2026. · Official source

Also known as: lawsuit funding contract disclosures Nebraskaright to cancel litigation funding contractattorney acknowledgment litigation funding contractconsumer protections lawsuit loan Nebraska