12 Aug 2026
Litigation Funding and the New York Consumer Litigation Funding Act
In this episode of Hard Hats & Justice, Chris Gorayeb takes on the financial pressure that quietly determines case outcomes long before any legal argument does. He opens with the reality every injured construction worker faces: a strong scaffold law case that will take four or five years to resolve, medical bills piling up, rent due, kids needing school and food, and a workers' compensation check capped as of July 2025 at $1,222 per week, which for a worker previously earning $2,500 per week is less than half of prior income. He explains that insurance companies know exactly what an injured worker's bank account looks like and structure their strategy around that financial desperation, making low early offers designed to close cases at a fraction of true value. The math works for the carriers because they do it thousands of times a year. It does not work for the worker, who ends up with a closed case, no workers comp, an evaporated settlement, and often worse economic circumstances than before the accident. Litigation funding, sometimes called lawsuit lending or pre settlement funding, emerged to relieve that pressure. According to market research cited in industry reports, the global litigation funding market was valued at approximately $20.64 billion in 2025 and is projected to reach more than $51 billion by 2036.
Chris then walks through the December 19, 2025 Consumer Litigation Funding Act signed by Governor Hochul, New York's first regulation of the industry. According to Insurance Journal reporting on the legislation, the law caps funding company recovery at 25 percent of the gross recovery from the litigation, requires plain language contracts with specific disclosures of amount received, payment schedule, and maximum total repayment, grants a 10 day right of rescission, prohibits funders from influencing settlement decisions or referring clients to specific attorneys or medical providers, and requires all funding companies to register with New York State and file annual reports. He quotes sponsoring State Senator Jeremy Cooney's characterization of the pre law environment as opaque and often predatory, with vulnerable plaintiffs left in the dark about the true cost of funding. Chris then gives the practical breakdown clients need: the 25 percent cap applies to gross, not net, and the client remains the last person paid after the attorney fee, workers compensation lien, and litigation funding claim are settled. He closes with two warnings. First, never sign a funding agreement without your attorney reviewing it in detail. Second, some law firms need money as badly as their clients and will push early settlements to cover their own bills, which is why choosing an attorney with the financial stability to hold out for full case value matters as much as legal skill.
About Gorayeb & Associates, P.C.
Founded in 1981, Gorayeb & Associates, P.C. is one of New York's leading personal injury law firms, specializing in construction accident litigation. The firm has represented more than 12,000 injured workers and secured over $2 billion in verdicts and settlements. The firm provides bilingual legal services and free community education to immigrant and working class communities across the five boroughs.
For more information visit: https://www.gorayeb.com/en/
Keywords
litigation funding, Consumer Litigation Funding Act, pre settlement funding, New York lawsuit lending, insurance company delay tactics, workers compensation cap, 25 percent recovery cap, Governor Hochul December 2025, financial desperation settlement, Chris Gorayeb
