Missouri Laws Regulating Lawsuit Funding
Missouri regulates consumer legal funding under the Consumer Legal Funding Act Sections 436.550–436.572 RSMo enacted in 2023. Funding companies must register with and be overseen by the Missouri Division of Finance before offering advances to plaintiffs in the state.
These agreements are structured as non-recourse sold-asset transactions rather than loans. Repayment is required only if there is a successful settlement or court award.
Licensing and Disclosure Requirements in Missouri
Missouri law requires funding providers to be licensed through the Missouri Division of Finance. Plaintiffs must be represented by an attorney, and the attorney must receive notice of the funding agreement.
Funding contracts must clearly disclose:
- The total amount to be repaid
- The annual rate of return
- That the agreement is non-recourse and repayment is required only if there is a recovery
Funding proceeds may not be used to pay attorney fees, court costs, or other litigation expenses.
Non-Recourse Protections Under Missouri Law
Missouri law protects plaintiffs by structuring consumer legal funding as non-recourse. If the lawsuit does not result in a settlement or court award, there is no repayment obligation.
This structure separates lawsuit funding from traditional lending and ties repayment strictly to the outcome of the case.
Additional Legal Considerations in Missouri
Missouri follows a pure comparative fault rule, meaning a plaintiff’s compensation may be reduced by their percentage of fault. This can affect the total recovery connected to a funding agreement.
The statute of limitations is generally five years for personal injury, two years for medical malpractice, and three years for wrongful death.