At the 2018 Mass Torts Made Perfect conference, I offered a look into one of the newest philanthropic efforts on the block, which advocates for plaintiffs in financial crisis. In case you missed my presentation, “Philanthropy and Civil Justice: Can Families Rely on Social Good to Support Themselves When They Hit Exhaustion During Lawsuits?” here’s the scoop.
The unregulated, for-profit plaintiff funding industry makes $3 billion annually from families who have exhausted their finances during litigation. Their interest rates can be as much as 50% to 100% per year. They justify those exorbitant interest rates because if a plaintiff loses the case, they lose their money. Sometimes, the amount in interest and fees a family ends up owing the funding company becomes larger than the settlement amount after all is said and done. Suddenly, seeking justice means going broke.
Let’s be clear, litigation finance is necessary to have as an option. Without it, a plaintiff who is in the midst of litigation may be forced to take a low settlement in order to end the lawsuit or they may be forced to drop the lawsuit altogether. However, the current rates in the industry may result in the following, which would also be undesirable:
- Plaintiff accepts an early but low settlement, rather than going to trial or waiting for a better settlement offer, because they’re concerned about the interest that is accruing; or
- Plaintiff becomes reluctant to accept a reasonable settlement offer because of a contractual obligation to repay a supplier a substantial portion of the proceeds of the settlement.
I founded the Bairs Foundation with my wife to offer the civil justice space a fair alternative to the options that exist today. Our mission is to provide plaintiffs with low-cost access to capital, so they can go the distance against deep-pocket defendants, without owing an arm and a leg once their suit has settled. Our solution is pre-settlement advances at 7% simple interest. This funding helps individuals and families cover daily living expenses, such as putting food on the table and paying utility bills, rent, and transportation, without financially ruining them after litigation.
Let’s take a quick look at a breakdown of two possible scenarios in which a plaintiff received an advance of $10,000: one from the Bairs Foundation, and one from a for-profit funding company:
Clearly you can see that the Bairs Foundation is able to provide funding at a rate that does not have hidden fees and does not end up as an insurmountable debt owed.
Since our organization’s founding, we have funded more than 130 families and advanced over $953,000.00 at 7% simple interest.
Help Us Help Others
If you’re interested in helping promote our cause, please spread the word to attorneys, clients in need, and civil justice stakeholders. Monetary contributions go directly to families in need.
We’re also interested in connecting with other nonprofits so we can continue to build a philanthropic civil justice network. We hope our mission is replicated by other organizations to help more people and communities in need.
Please visit www.bairsfoundation.org for more information.
A West Point graduate where he served as captain and military aviator, John Bair continues his commitment to our country through his efforts within the settlement planning industry. He has represented families of victims lost in the Flight 3407 crash, offered pro bono services to the families of 9/11 victims and drafted the first consumer protection bill for plaintiffs (H.R. 3699).