OPINION:
Every American should be outraged by allegations of staged truck accidents, organized insurance fraud and criminal enterprises exploiting our civil justice system (“Staged truck accidents expose America’s lawsuit abuse crisis,” Web, July 5).
Anyone who intentionally causes accidents, fabricates injuries or submits fraudulent insurance claims should be investigated, prosecuted and punished to the fullest extent of the law.
Unfortunately, whenever such stories dominate the headlines, consumer legal funding is often swept — unfairly — into the discussion.
That is both inaccurate and harmful.
Consumer legal funding has nothing to do with staging accidents, recruiting plaintiffs or manufacturing lawsuits. By the time a funding company becomes involved, the consumer has already been injured and retained an attorney and has a legitimate legal claim. The lawsuit already exists.
Consumer legal funding provides modest, non-recourse financial assistance, typically between $3,000 and $5,000, to help injured consumers pay everyday expenses and medical bills as their cases move through the legal system. It does not finance litigation, attorneys’ fees or legal strategy.
As we often say at the Alliance for Responsible Consumer Legal Funding, we are funding lives, not litigation.
Equally important, consumer legal funding is non-recourse. If a consumer does not recover, the funding company receives nothing. This means that companies have every incentive to support legitimate claims, not frivolous ones.
For many injured Americans, this financial assistance provides the breathing room needed to avoid being forced into an unfair settlement simply because bills continue to pile up while they recover. It allows families to remain financially stable while their attorneys pursue a fair resolution.
Over the past two decades, many states have enacted comprehensive laws governing consumer legal funding. They now require clear disclosures, written contracts, attorney acknowledgments, cancellation periods and prohibitions against influencing litigation or settlement decisions.
These safeguards protect consumers while preserving access to an important financial option.
America can fight fraud while protecting responsible access to consumer legal funding for injured consumers facing financial hardship. Those goals are not in conflict; they complement one another.
Consumer Legal Funding is not part of the lawsuit abuse problem. It is part of the solution for injured Americans who need temporary financial assistance while waiting for justice.
ERIC SCHULLER
President, Alliance for Responsible Consumer Legal Funding (ARC)
Chicago, Illinois
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