A litigation funder has petitioned a New Jersey state court to dismiss its involvement in a suit claiming it, along with two law firms, improperly directed a former client toward securing high-interest loans during a vehicle injury litigation. The funder argues that its financial agreements should not be classified as loans under the provisions of the Consumer Fraud Act. The legal intricacies of this argument center on the distinction between litigation funding agreements and traditional loan products, which might affect regulatory oversight under consumer protection laws.
This case highlights ongoing debates regarding the legal classification and regulation of litigation finance. For further details, you can access the article on Law360’s website.