Beverly Law. Updated November 2026.
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Texas has no consumer funding statute
Many states now regulate these advances with their own statute; our state law table lists them. Texas is not one of them. We found no chapter of the Texas codes that defines consumer legal funding or tells a funding company what its contract must say.
In practice that means four protections found in other states are missing unless the contract adds them. Texas law does not give you a set number of days to cancel. It does not make the company register with any agency. It does not cap the charges. It does not require your lawyer to sign an acknowledgment. Any of these may still appear in a contract, but only because the company chose to include them.
The court decision Texas courts cite
The leading Texas appellate decision is Anglo-Dutch Petroleum International, Inc. v. Haskell, 193 S.W.3d 87, decided May 2, 2006 by the First Court of Appeals in Houston (Anglo-Dutch v. Haskell). Investors had put about $560,000 into an oil company’s lawsuit. The company would pay them back “If and only if” the suit produced a cash recovery. When the case settled, the company argued the deals were usurious loans, pointing to an expert who put the investors’ returns at 62% to 186% a year.
The court disagreed. Because repayment depended on a cash recovery, the company had no absolute obligation to repay, so the deals were not loans and usury law did not apply. The court said the company “confuses the terms ‘contingency’ and ‘risk'”: investors feeling confident did not erase the contingency in the contract, and the later settlement did not make the deals usurious after the fact. The court also rejected arguments that the agreements were champertous or against Texas public policy, noting that the investors had no control over the lawsuit.
Two limits matter for an injured person. The money went to a business for its own lawsuit; no injured consumer was involved. And the court looked at whether the contingency was real. A contract that makes you pay even without a recovery could be judged differently.
Why the word “loan” matters under Texas law
The Texas Finance Code defines a “loan” as an advance of money “the principal amount of which the obligor has an obligation to pay the creditor” (Fin. Code 301.002). The general maximum rate is “10 percent a year except as otherwise provided by law,” and contracts for usurious interest are subject to the penalties in chapter 305 (Fin. Code 302.001).
These sections give background only. Under Anglo-Dutch, an advance you repay only from a recovery is not a loan because you never owe the principal outright. We found no Texas appellate decision applying usury law to a consumer pre-settlement advance. Our page on whether a lawsuit cash advance is a loan explains how courts in other states have split on this.
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Proposals that have not become law
In 2025, Senate Bill 3025 would have added section 22.021 to the Government Code, directing the Texas Supreme Court to adopt rules requiring disclosure of third-party litigation financing agreements to the parties in a civil case (S.B. 3025, introduced). It did not pass: the current chapter 22 of the Government Code goes from section 22.020 to 22.022 with no section 22.021 (Gov’t Code ch. 22).
The Texas Supreme Court’s Advisory Committee has taken up the subject on its own. “Third-Party Litigation Funding” was on its August 29, 2025 agenda, with an August 24, 2025 update memo (SCAC agenda, Aug. 2025), and again on its September 10, 2026 agenda (SCAC agenda, Sept. 2026). We found no adopted rule as of November 2026. The committee’s meeting page posts new agendas and transcripts.
Other Texas rules that matter
What a Texas lawyer is allowed to do
Texas ethics rules are unusual here. Rule 1.08(d) of the Texas Disciplinary Rules of Professional Conduct lets a lawyer advance, or back with a promise to pay, court costs, litigation expenses “and reasonably necessary medical and living expenses,” with repayment that may depend on the outcome (Tex. Disciplinary R. Prof’l Conduct 1.08(d), eff. Mar. 7, 2025; Texas Center for Legal Ethics). Rule 1.08(h) still bars a lawyer from owning a stake in your claim beyond a lien allowed by law and a permitted contingent fee.
Each firm decides whether to offer this help, since the rule allows it without requiring it. Texas cases are handled by the firm’s Texas-licensed attorneys, Joyce Ondich and John Efstathiou. See can my lawyer give me money before settlement.
Your two-year deadline
An advance does not stop the clock. Texas Civil Practice and Remedies Code section 16.003 requires a personal injury suit to be filed “not later than two years after the day the cause of action accrues,” with some exceptions (CPRC 16.003). For death claims, see our page on the Texas wrongful death deadline.
Where to complain in Texas
No Texas agency is assigned to these advances. For a deceptive practice by any business, the Attorney General’s Consumer Protection Division takes complaints through its online complaint page, which also has English and Spanish paper forms, or by mail to Office of the Attorney General, Consumer Protection Division, PO Box 12548, Austin, TX 78711-2548.
What to ask before you sign
Because Texas law supplies few of the terms, read the contract with these questions in mind. Our red flags page has a longer list.
- Do I repay only from my recovery, or could I owe money if I lose or drop the case?
- Does the contract give me any right to cancel, and how many days? Texas law does not, but you can ask; see the right to cancel.
- What is the most I could owe, and at what dates does the amount go up?
- Which state’s law does the contract choose, and where would a dispute be heard?
- Does the company get any say in settlement or in my choice of lawyer?
Common questions
Is pre-settlement funding legal in Texas?
Texas has no statute that bans or regulates it, and the main appellate decision found a contingent funding deal enforceable. Each contract is judged on its own terms.
Is there a cap on what a Texas funding company can charge?
No funding-specific cap exists. The general usury limits in the Finance Code apply to loans, and an advance repaid only from a recovery may not count as one under Anglo-Dutch.
Do I have a right to cancel in Texas?
Only if your contract gives you one. No Texas statute sets a cancellation period for these advances.
Can my Texas lawyer help with rent or medical bills?
Rule 1.08(d) allows a Texas lawyer to advance, or promise to cover, reasonably necessary medical and living expenses, but it does not require it.
Where can I compare Texas with other states?
The laws by state table has every state, and the lawsuit cash advance guide explains how the advances work. Beverly Law does not offer or arrange lawsuit funding and receives no payment from funding companies. Beverly Law offers a free case review in English or Spanish at (310) 552-6959 if you have questions about your injury case. You owe no fees or costs unless we win.
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Related pages
Cash advance on a lawsuit · Laws by state · Injury law FAQs
Sources
- Anglo-Dutch Petroleum Int'l, Inc. v. Haskell, 193 S.W.3d 87 (Tex. App.-Houston [1st Dist.] 2006) (hallapproved.com)
- Texas Finance Code ch. 301 (definitions of "loan" and "interest") (tcss.legis.texas.gov)
- Texas Finance Code ch. 302 (maximum rate, usurious interest) (tcss.legis.texas.gov)
- S.B. 3025, 89th Leg. (2025), introduced text (capitol.texas.gov)
- Texas Government Code ch. 22 (current text) (tcss.legis.texas.gov)
- Supreme Court Advisory Committee meetings 2021-2030 (txcourts.gov)
- SCAC agenda, Aug. 29, 2025 (txcourts.gov)
- SCAC agenda, Sept. 10, 2026 (txcourts.gov)
- Texas Disciplinary Rules of Professional Conduct (eff. Mar. 7, 2025), Rule 1.08 (txcourts.gov)
- Texas Center for Legal Ethics, Rule 1.08 (legalethicstexas.com)
- Texas Civil Practice and Remedies Code ch. 16 (sec. 16.003) (tcss.legis.texas.gov)
- Texas Attorney General, file a consumer complaint (texasattorneygeneral.gov)
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.