If your attorney recently suggested a specific funding company while your case is pending, it is fair to wonder why. Is that recommendation based on what fits your situation, or is something else happening behind the scenes?
California has a new answer to that question. Assembly Bill 931 puts real limits on how attorneys and funding companies can work together, and understanding those limits helps you evaluate any recommendation with confidence rather than suspicion. This guide breaks down what the law actually says, what a proper referral looks like, and what you can ask to feel sure about your choice.
What AB 931 prohibits
AB 931 sets clear boundaries around the relationship between attorneys and legal funding companies in California. The rules focus on money changing hands in ways that could compromise your attorney’s independence.
A funding company cannot pay your attorney or their firm a referral fee for sending you their way. This kind of payment, sometimes called a kickback, is off the table under the new law. Your attorney and their immediate family members cannot hold a financial interest in a funding company that is providing funding to you as their client. That separation exists to keep the recommendation focused on your needs rather than someone else’s profit. The law includes penalties for violations, so these are not just guidelines attorneys can quietly ignore. There are consequences for crossing the line.
Practical takeaway: a proper recommendation should not come with a hidden payment. If your attorney points you toward a company, that suggestion is supposed to stand on its own merits.
This matters because plaintiffs already have a lot to manage during an active case. Many people turn to pre-settlement funding to help cover rent, medical bills, and other costs while they wait for their case to resolve, and knowing the referral itself is clean lets you focus on whether the funding terms actually work for you.
What a compliant recommendation looks like
A referral that follows AB 931 does not disappear or become vague. It just looks different from a referral built around a payment. Here is what you should reasonably expect.
Your attorney explains why a particular company fits your situation, based on your case type, your timeline, or your financial needs, not on any arrangement between the firm and the funder.
You receive a written acknowledgement confirming that any required disclosures were reviewed with you before you moved forward. This paperwork exists so there is a clear record that you understood your options. You remain free to choose a different company at any point. Your attorney’s suggestion is a starting point, not a requirement.
Practical takeaway: you always keep the final say on which company you use. No attorney can force your hand on this decision, and a reputable firm will not try.
If you want more detail on how these rules apply from the law firm side, this overview of how AB 931 changes attorney and funding company relationships walks through the same requirements from the attorney’s perspective. Seeing both sides of the rule can help you understand why your attorney’s approach might have shifted recently.
Questions worth asking
Asking direct questions about a funding recommendation is not the same as accusing your attorney of doing something wrong. It is simply part of being an informed client, and any attorney working in California today should expect and welcome these questions.
Ask whether your attorney has any financial interest in the funding company they mentioned. A straightforward answer should be easy to get. Ask why this particular option fits your case, rather than a competitor. A good answer will point to something specific about your situation, not a generic pitch.
Confirm that you received a plain-English contract to review before signing anything, and take the time to actually read it.
Practical takeaway: a direct question about financial interest is fair and easy to ask. If the answer feels evasive, that is worth paying attention to.
It also helps to know the general warning signs that separate a legitimate funding company from one that cuts corners. This guide to spotting funding red flags covers the kinds of practices California plaintiffs should watch for, regardless of how they found the company in the first place.
What You Should Know
AB 931 exists to protect you, not to make attorneys look untrustworthy. Most attorneys already act in your best interest, and this law simply gives that relationship a clearer structure, one where recommendations have to be about fit rather than financial arrangements. Knowing the rules means you can ask good questions, review your paperwork with confidence, and make the choice that actually works for your situation.
If you are weighing a funding recommendation right now, or you just want to understand your options before your attorney brings one up, Fund Capital America is available to walk California plaintiffs through what pre-settlement funding actually involves and how the process works from application to approval.
Who is Fund Capital America?
Since 2006, Fund Capital America (FCA) has been a trusted leader in pre-settlement funding, providing cash advance loans to plaintiffs in personal injury and accident cases. Over the years, FCA has proudly served thousands of law firms and tens of thousands of clients, helping them navigate the financial challenges of litigation. While our core service is pre-settlement funding, we also offer a comprehensive range of services to support law firms and their clients from the beginning of the case to the final settlement check distribution.
Fund Capital America’s Services
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