Maintenance Funding Provider
Frequently Asked Questions
The annual registration fee is $300.
Legal funding is a payment of $500,000 or less to an individual in exchange for the right to receive an amount out of the potential proceeds of any realized settlement, judgment, award, or verdict the individual may receive in a civil legal action.
Maintenance funding agreement is an agreement between an individual and a maintenance funding provider under which the maintenance funding provider provides legal funding to the individual. Before executing a maintenance funding agreement, a maintenance funding provider shall file with the division a template of the maintenance funding agreement. For guidance on the maintenance funding agreement.
A maintenance funding provider is a business entity that engages in the business of legal funding. Maintenance funding provider does not include:
- an immediate family member of an individual;
- an accountant providing accounting services to an individual; or
- an attorney providing legal services to an individual.
Yes. The provider must provide the individual a copy of the funding agreement.
Yes. Pursuant to §13-57-202(3) a maintenance provider may not:
- pay or offer to pay a commission, referral fee, or any other form of consideration to the following for referring an individual to the maintenance funding provider:
- an attorney authorized to practice law;
- a health care provider; or
- an employee, independent contractor, or other person affiliated with a person described in Subsection (3)(a)(i) or (ii);
- accept a commission, referral fee, or any other form of consideration from a person described in Subsection (3)(a) for referring an individual to the person;
- refer an individual or potential individual to a person described in Subsection (3)(a), unless the referral is to a local or state bar association referral service;
- intentionally advertise materially false or misleading information about the maintenance funding provider's services;
- make or attempt to influence a decision relating to the conduct, settlement, or resolution of a legal action for which the maintenance funding provider provides legal funding; or
- knowingly pay or offer to pay court costs, filing fees, or attorney fees using legal funding.
The requirements for a maintenance funding provider in 13-57 do not apply to:
- a bank while in the course of conducting a banking business as described in Section 7-3-1;
- a deferred deposit lender, as defined in Section 7-23-102, while engaged in the business of deferred deposit lending;
- a title lender, as defined in Section 7-24-102, while engaged in the business of extending a title loan;
- a creditor, as defined in Section 70C-1-302, subject to the provisions of Title 70C, Utah Consumer Credit Code.
After notice and an opportunity for an administrative hearing in accordance with Title 63G, Chapter 4, Administrative Procedures Act, the division may, in addition to exercising the division's enforcement powers under Section 13-2-6, enforce the provisions of this chapter by:
- revoking or suspending a maintenance funding provider's registration;
- ordering a maintenance funding provider to cease and desist from further legal funding;
- imposing a penalty of up to:
- $1,000 per violation; or
- $10,000 per violation that the division finds willful; or
- ordering the maintenance funding provider to make restitution to an individual.
The division's enforcement powers under this section and Section 13-2-6 do not affect an individual's legal claim against a maintenance funding provider.
On or before April 1 of each year, a maintenance funding provider registered in accordance with Section 13-57-201 shall file a report. The report will need to be on a form created by the Division and will need to include the following information, for the preceding calendar year,
- the number of maintenance funding agreements entered into by the maintenance funding provider;
- the total dollar amount of legal funding the maintenance funding provider provided;
- the total dollar amount of charges under each maintenance funding agreement, itemized and including the annual rate of return;
- the total dollar amount and number of maintenance funding transactions in which the realized profit to the company was as contracted in the maintenance funding agreement;
- the total dollar amount and number of maintenance funding transactions in which the realized profit to the company was less than contracted; and
- any other information the director requires concerning the maintenance funding provider's business or operations in the state.