§ 25-3304.Civil litigation funding company; prohibited acts.

Section 25-3304 targets conflicts of interest and deceptive practices on both sides of a funding transaction. A civil litigation funding company cannot pay, or offer to pay, commissions or referral fees to any attorney, law firm employee, medical provider, chiropractor, or physical therapist for sending it business. The prohibition runs the other direction too: the company cannot accept commissions, referral fees, or rebates from any of those same people. The point is to keep referrals from turning into a paid pipeline that steers consumers toward a particular funding company.

The section also bars false or intentionally misleading advertising about the company’s products or services, and it addresses what happens when a consumer has already assigned part of a future recovery to a different funding company. A company cannot knowingly extend new funding to that consumer unless it first buys out the earlier company’s entire accrued balance — unless the companies and the consumer agree in writing to some other arrangement. That rule keeps a single legal claim from being carved up among competing funders without everyone’s consent.