According to this article in today's Wall Street Journal, several states are considering
whether to limit the business of lending money to plaintiffs to fund litigation and collecting if the plaintiffs' suits are successful. “At the heart of many of the bills are
proposals to subject the lawsuit-funding industry to existing state laws that
regulate the interest rates banks and other lenders can charge,” the article explains. The companies respond that they are not making traditional loans; they are funding suits and taking on risk of not receviing any payment if a suit is not successful. The lobbying effort in support of state restrictions is being headed up by the U.S. Chamber of Commerce.
Uncategorized
States consider limits on loans to finance lawsuits
This does not seem quite fair to plaintiffs filing lawsuits against large corporations and insurance companies. Some of these large companies have unlimited funding to battle these lawsuits. Why should a plaintiff not be allowed to borrow any sum of money to fight a legal battle, assuming there is a willing lender?