What will happen nationally if philanthropists, civil justice advocates, the judiciary, the trial bar and well intended non profits and charities get on the same page and put a major dent in the consumer litigation finance industry? Nothing but good in my opinion.
Not all litigation finance companies that loan or advance money to plaintiffs at their most dire time of need are bad. This author knows first hand a few reputable for profit lenders who have been in the litigation finance space for many years, and charge, albeit a high interest rate, they are some of the lowest in the for profit space. Plaintiff Support of Getsville, NY and Covered Bridge of PA are two such firms. There will always be cases that have high risk, and those plaintiffs deserve access to capital equally. Capping interest rates in the litigation finance industry will guarantee two results: it will deny almost all plaintiffs of the financial lifeline they need to pay for basic living necessities during litigation, and it will make insurance companies more money.
Our foundation, a public charity 501(c)(3), is the only nonprofit operating in the Consumer litigation finance space. We don’t lend to lawyers, their firms, or fund litigation case expenses. We are currently charging 7% simple annual interest. The only money that is advanced is done on a non recourse basis in the states where that is lawful, and recourse in the states in which the state bar ethics dictate, or case law merits use such as Nebraska, North Carolina, Colorado and Missouri. Our foundation cares not if the contract is non recourse or recourse. We only accept high integrity cases from reputable law firms in order to insure the solvency of our pool of assets, and we will never go after a plaintiff who has lost in their lawsuit, even if we have a contractual right to. We are in the business of providing families who have been devastated by the negligence of others, and who have a very valuable illiquid asset, their lawsuit, and need only the dignity to live at the poverty level in order to get to the end of their lawsuit.
The people who need litigation finance are our neighbors and countrymen and women. They haven’t rigged some lawsuit scam so they can borrow money easily. I guarantee you they would rather not be in a lawsuit fighting for their lives. Litigation is brutal. The families caught up in these tough cases often lose their jobs, are unable to work, lose their healthcare and in most cases their homes, savings. The financing we provide 60% of the time is for basic housing.
There is absolutely no reason why people relying on the 7th amendment and the Civil Justice system, who find themselves desperate financially, should be taken advantage of by firms who are being financed by Wall Street hedgefunds with an appetite for 50% +++ returns. Often worse that payday loans, the abusive contracts and interest rates that lawyers and bar associations generally detest are the ones that do the most harm.
We are proud to have been recognized by the Impact Fund and the Huffington post, we hope that discourse about this financial consumer space is more prevalent and transparent in years to come. We currently are only able to fund but 40% of the request made of our foundation. If you or someone you know would like to help our foundation, please feel free to contact me directly, 716.883.1833.
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).