Can I get a cash advance on my lawsuit in Minnesota, and what does Minnesota law say?

By Michael Shemtoub, trial attorney, Beverly Law. Updated November 2026.

The Maslowski case: what happened

Pamela Maslowski was hurt in a 2012 car crash in Woodbury and hired a lawyer. On May 21, 2014, needing money for living expenses, she signed a “Sale and Repurchase Agreement” with a funding company and received $6,000. The amount she owed “increased by 30 percent every 6 months,” with a cap of $25,245, and she owed nothing if she recovered nothing. Her lawyer signed the contract’s last page to certify that he had reviewed it with her (Maslowski I, No. A18-1906).

Her injury case settled in July 2015 and she did not pay. The company sued her in New York; she sued in Hennepin County. A New York appellate court dismissed the New York case, finding its forum clause “unreasonable.” The Minnesota district court and court of appeals then held the contract unenforceable as champertous, under earlier Minnesota decisions.

2020: Minnesota abolishes champerty

On June 3, 2020, the Minnesota Supreme Court reversed in an opinion by Justice Hudson. It agreed the contract was champertous under the old cases, then held: “Minnesota’s common law prohibition against champerty is abolished.” The court reasoned that “the ancient prohibition against champerty is no longer necessary,” pointing to rules that now deter frivolous suits, the acceptance of contingent fees and the general freedom to assign claims.

The court did not leave clients without protection:

• “Parties like Maslowski retain the common law defense of unconscionability.”
• Courts “should carefully review uncounseled agreements,” especially where bargaining power is unequal.
• A term letting the funder control or approve a settlement would still be suspect; the court repeated an old Minnesota statement that it is “difficult to conceive of any stipulation more against public policy.”
• “Our abolition of champerty as a defense does not mean that all such agreements are enforceable as written.”

2023: the usury law does not apply

On remand, the district court found the 60 percent annual rate unconscionable because it violated the usury statute. It ordered repayment of the $6,000, a $1,425 processing fee and 8 percent simple interest. The court of appeals agreed the usury law applied, reasoning that the duty to repay was absolute unless Maslowski gave up her claim (978 N.W.2d 447 (Minn. App. 2022), as summarized in the 2023 opinion).

On August 23, 2023, the Supreme Court reversed again, in an opinion by Justice McKeig (Maslowski II, No. A21-1338).

• “It simply cannot be said that Prospect’s ability to recover the money given to Maslowski is absolute.” Even something “extremely likely to happen” may not happen, and Maslowski had “no affirmative obligation” to repay if she lost.
• Because repayment was not absolute, Minn. Stat. 334.01 did not apply. That statute bars taking more than “$8 on $100 for one year” for “the loan or forbearance of money,” except on written contracts of $100,000 or more.
• The court did not decide whether the contract is a loan at all.
• It sent the case back for the district court to decide whether the rate is unconscionable under common law, and said whether usury limits should cover these contracts “is likely a question” for the Legislature.

Justice Moore, joined by two justices, concurred. He listed factors a court could weigh on unconscionability, noted that states regulating these agreements have set caps well below 60 percent, and invited the Legislature to act.

What this means for consumers today

In Minnesota, a contingent advance is not void as champerty and is not capped by the general usury statute. The remaining check is unconscionability, decided case by case after the fact. That puts more weight on the contract you sign. Our page on how much pre-settlement funding costs shows how a rate like 30 percent every six months compounds.

Minnesota bills and lawyer rules

A bill to regulate consumer litigation funding, SF 2929 (companion HF 2677), was introduced on March 24, 2025 and referred to the Senate Commerce and Consumer Protection committee; the Legislature’s site shows no later action (SF 2929 status). As introduced, it would require registration with the Department of Commerce, a ten-business-day right to cancel, a signed acknowledgment from the client’s lawyer, and a payoff set by time intervals instead of a percentage of the recovery (introduced text). It is not law. For how cancellation rights work where they exist, see right to cancel lawsuit funding.

Minnesota’s ethics rule has an unusual option. Rule 1.8(e)(3) lets a lawyer stand as guarantor on “a loan reasonably needed to enable the client to withstand delay in litigation” that would otherwise pressure the client to settle “because of financial hardship rather than on the merits.” The client must remain “ultimately liable for repayment of the loan without regard to the outcome,” and the lawyer may not promise this help before being hired (Minn. R. Prof. Conduct 1.8). Lawyers still may not lend clients money for living expenses. More on this at can my lawyer give me money before settlement.

Your filing deadline in Minnesota

Minnesota has two deadlines that can apply to injury claims. Minn. Stat. 541.05, subd. 1(5) gives six years for “any other injury to the person or rights of another, not arising on contract” (541.05). Minn. Stat. 541.07(1) gives two years for libel, slander, assault, battery, false imprisonment “or other tort resulting in personal injury” (541.07). Which one fits your claim is a question for your lawyer, and an advance does not stop either clock.

What to ask before you sign

• What will I owe at 6, 12, 24 and 36 months, and is there a cap?
• Does any term give the company a say over settlement or limit my contact with my lawyer? The district court in Maslowski found terms restricting her relationship with counsel unconscionable.
• Has my lawyer reviewed it? The 2020 opinion told courts to look hard at “uncounseled agreements.”
• Would a lawyer-backed loan under Rule 1.8(e)(3) be an option in my case?

Common questions

Related pages

Cash advance on a lawsuit · Laws by state · Injury law FAQs

Important: This page is general information, not legal or medical advice, and reading it does not create an attorney-client relationship. Every case is different; talk to a lawyer about yours. Texas cases are handled by the firm’s Texas-licensed attorneys, Joyce Ondich and John Efstathiou. Last reviewed: November 7, 2026.