The consumer lawsuit funding debate has many sides and interests just like any other debates. There are several sides to different stories and arguments. You need to know the players as well as their motivations in order to understand the debate.
The Insurance Industry and Lawsuit Targets
Companies and industries such as the insurance industry are more likely to be the defendants in consumer lawsuits than others. Their trade groups advocate policies that make it easier for defendants to win their cases and limit their liabilities. As a result, they get to save more money. If legal funding does not help plaintiffs win more settlement money, insurance lobbyists would not care about it.
These insurance companies as well as other defendants encourage lawmakers to ratify strict statutes and regulations that would make legal financing unfeasible. Influential groups such as the Chamber of Commerce usually lead these companies. The irony is so obvious since these are business entities and organizations that traditionally fight against heavy-handed governing intrusions into a free and competitive market.
The Legal Funding Industry
There are many legal funding companies existing nowadays. All of them have assigned interest in ensuring their services remain legal and unperturbed by regulations. Over the years, several trade groups emerged for two reasons. The first is to create standards that allow legal funders to ensure consumer protection. The second is to establish a united financial front to fight against efforts to make their industry nonexistent. One example is the industry opposes all efforts to cap their rates or return as well as classify their industry as a type of lending.
Despite their intention of a unified financial front, the industry does not take a single stance on all the regulations. Larger funding companies act in their own interests and support policies that prevent newer and smaller funding companies from entering the industry. Financing companies try to pass laws turning the industry into an ultimate legitimacy. They are proposing changes that most of them abide by anyway.
In addition, these companies try to pass state laws that would clearly codify their industry into law, which leads to its ultimate legitimacy. Many companies operate in states where there are no laws for settlement funding. As a result, they operate their business in an uncomfortable belief that their business activities are completely legal. These funding companies are proposing reforms that most of them abide by anyway. Funding companies would secure their businesses’ legality through codifying their best practices.
.:About the author:.
James Sheridan is the Contracts Manager at Pegasus Legal Funding LLC and is responsible for the final stage of the funding approval process. James focus and priority is delivering to PLF’s clients the funds they need as quickly as possible