Court Financing Agreements

Therefore, no, the IRS was not at all inconsistent: these trial financing agreements resulted in lawsuits against Mr. Novoselsky, even though those rights were not loans under federal tax legislation. Litigation funding is widespread enough to attract the attention of the federal government. In 2019, Senator Grassley introduced a bill, the Litigation Funding Transparency Act, that requires various disclosures to the court and the parties on litigation financing. The Family Act of 1975 provides for parties to a marriage or, de facto, to enter into a binding legal agreement on financial arrangements in the event of a breakdown of their marriage or de facto relationship. Sometimes people know these agreements as “marital agreements,” but the legal term is “financial arrangements.” Justice Harris found that previous submissions regarding judicial sanctions for funding agreements were obedient and therefore did not include a binding judicial precedent. He then clarified the law: the conclusion of a legal financing agreement is a matter of the ordinary powers of a liquidator and there is no need for judicial authorization. Not only are liquidators not required to obtain judicial sanction, but they should not go to court if there is no concrete legal issue. Certification is an important procedure in which some appelal courts, which deal with a complex and unprecedented issue of New York law, may request an answer to this question from The highest court in New York. 22 N.Y.C.R.R. 500.27 (a). Under New York law, certification only requires that there be no decision to review (1) the New York Court of Appeals on the issue at issue; and (2) the certified compliant question is decisive for the outcome of the case.

Id. Some courts have additional requirements before submitting a certified compliant application. The Second Circuit examines, for example , (1) whether “the New York Court of Appeals has dealt with the issue and, if not, whether the decisions of other New York courts allow [the Court] to predict how the Court of Appeals would resolve it; 2. if “the issue is important to the state and may require value judgments and public policy decisions”; and (3) if the issue is “decisive for a claim.” Expressions Hair Design v. Schneiderman, 877 F.3d 99, 105 (2d Cir. 2017) (in-between internal quotation marks omitted).