State Rules

How each state regulates pre-settlement funding.

Licensing, disclosure, rate limits and champerty rules differ by state. Criterica Capital prices legal assets from the court record and brings them to capital partners built for each transaction: acquisitions, credit, portfolio sales and risk transfer.

State pages
State rules
States With Restrictive Rules

The states listed below maintain champerty, maintenance, or barratry rules that restrict or prohibit third-party litigation funding.

Alabama
Anti-champerty statute
Arkansas
Maintenance & champerty doctrine
Kentucky
No statutory safe harbor
Louisiana
Barratry provisions under civil law
Maryland
Champerty prohibitions apply
Minnesota
Regulatory review underway
Mississippi
Common law champerty restrictions
Nebraska
No third-party funding statute
North Carolina
Champerty prohibitions enforced
South Carolina
No funding framework — 2026–2027 reform expected
West Virginia
Champerty restrictions — legislative activity pending

Local regulations govern pre-settlement funding. States listed as "pending" are in a regulatory process. Your attorney can advise on what applies in your state, and you can contact us with questions.

Why State Rules Differ

Pre-settlement funding is regulated at the state level. A combination of champerty and maintenance doctrines, interest rate caps, mandatory disclosure requirements, and attorney ethics rules creates different legal frameworks in each jurisdiction. Some states prohibit third-party litigation funding explicitly, and others have regulatory environments that make compliant funding impractical.

Champerty & Maintenance Laws
Several states maintain common law champerty doctrines that prohibit third parties from having a financial interest in litigation. While courts have generally interpreted modern litigation finance as distinct from historic champerty, some jurisdictions have not updated their interpretation to accommodate structured non-recourse funding agreements.
Interest Rate Caps & Usury
Some states apply usury statutes to pre-settlement funding, treating the transaction as a loan subject to interest rate limits. Because pre-settlement funding is non-recourse, not technically debt, this classification is legally disputed, but the regulatory uncertainty makes compliant product design difficult without explicit statutory authorization.
Disclosure & Licensing Requirements
States in the "pending" category are actively developing pre-settlement funding regulations. South Carolina and West Virginia have pending legislative activity expected to conclude in 2026–2027.
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