Georgia Supreme Court Says Terms Of Litigation Funding Agreement Show That Arrangement Is Not Subject to Usury, Payday Lending Laws

Georgia Supreme Court Says Terms Of Litigation Funding Agreement Show That Arrangement Is Not Subject to Usury, Payday Lending Laws

The headline reads “Litigation funding not subject to Georgia’s interest rate laws, state Supreme Court rules.”

And it is true that the Georgia Supreme Court ruled in favor of a litigation funding company, on the grounds that the state’s usury or payday loan laws did not apply.

But the terms of the litigation funding agreements were the basis for the conclusion that the statutes were inapplicable, and had those terms been different – such as if the terms required repayment (with interest) of advance payments, or principal, regardless of the outcome of the litigation – the court might have reached another decision.  In other words, it is not necessarily true that every litigation funding agreement is not subject to Georgia’s lending laws.

The news story, from LegalNewsLine, is available here.  The Georgia Supreme Court’s opinion is available here.

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