consumer legal funding

ARC Advisory Council Member Writes LAW 360 Article on the Importance of Free Markets

Jeremy Kidd, a law and economics scholar at Mercer University’s Walter F. George School of Law, recently scribed an article for the legal publication Law 360 discussing how anti-market, pro-business protectionism is threatening American democracy.  In the article, he describes the difference between supporting pro-market ideologies established by free market theorist Adam Smtih and supporting pro-business initiatives that forward the interests of specific businesses and hurt consumers in the process.

In the article, he describes the difference between supporting pro-market ideologies established by free market theorist Adam Smtih and supporting pro-business initiatives that forward the interests of specific businesses and hurt consumers in the process.

Kidd calls out the U.S. Chamber of Commerce for pushing the business interests of their top donors–many massive insurance company backers–to the detriment of consumers.

In recent years, the Chamber has advocated for a ban on the use of consumer legal funding in states across the country, which could leave many personal injury victims without financial options when trying to pursue a fair claim. Consumer legal funding helps families replace lost income now, after an accident, so that they can meet basic household needs until their case settles.

From the article:

It is difficult, if not impossible, for victims to hold insurance companies accountable when victims must accept an insufficient settlement offer in order to avoid starvation, eviction or inability to obtain medical care. As in so many other areas of our lives, financial intermediaries have arisen to correct this market imperfection.

Kidd, who is a member of the ARC Advisory Council, is also one of the nation’s leading experts on the topic of consumer legal funding. His latest paper on the topic, Modeling the Likely Effect of Litigation Financingwhich was published last year.

Check out the article on Law 360’s site HERE.

Read the full text HERE.

financially fit

Taking It To the Next Level—ARC Launches Financial Literacy Tool to Mark Financial Literacy Month

The Alliance for Responsible Consumer Legal Funding (ARC) is proud to announce the launch of a new website called Financially Fit in honor of National Financial Literacy Month, which is observed in April every year. Financially Fit a user-friendly financial resource site for people who are facing a financial crisis after an accident or injury, or who simply want to move toward long-term financial wellness.

To develop the site, we partnered with our ARC member companies and Money Management International (MMI), a well-respected 501 (c)(3) non-profit credit counseling service that has been serving consumers since 1958. Members of our Advisory Council were also integral to the site’s development.

ARC is committed to promoting practices and regulations that lead to consumer’s informed decisions about their finances.

We believe that informed decisions start with financial education.

The site entered beta testing on December 1, 2016. Since then it’s garnered over 3,000 visits and more than 650 people have called MMI for free 1-on-1 budget counseling through the site.

We are excited to share this resource, to take our engagement with consumers to the next level. We hope that it will provide the tools necessary to get visitors on the path to financial health.

consumer legal funding

Rob Johnson’s Biting Response to U.S. Chamber’s Lisa Rickard

The hypocrisy of the U.S. Chamber of Commerce’s stance on regulation can sometimes be hard to stomach.

The organization is known for their firm opposition to regulations on businesses, lobbying for de-regulation at every turn, citing harm to the market and the economy. However, they are happy to push to impose regulations on small business if it’s in the interest of their members—huge insurance companies like State Farm and Allstate—unconcerned that it would hurt everyday people in the process.

In a recent op-ed out of Alabama, U.S. Chamber Institute for Legal Reform president, Lisa Rickard, derides consumer legal funding (which she intentionally mischaracterizes as “lawsuit loans”) by spouting glaring falsehoods (too many to even address properly in one blog), slinging mud, and pushing a bill that would hurt consumers in that state.

ARC Executive Director Rob Johnson just wrote a measured but biting response in The Gadsden Times titled “More bureaucracy, less choice? What is U.S. Chamber thinking?” calling out the Chamber for being so out of touch with the people of Alabama—and people across the country:

The November election revealed an overwhelming tide of people who felt left behind by the system and invisible to policymakers. These are people who go to work every day and just want to forge the best lives they can for their families. The voice of Alabamans rang loud and clear — they want less government, not more bureaucracy. They want more choices for their families, not fewer… Overregulation is not consumer protection. It’s just out of touch with the voices of voters and leaves people behind.

It’s recommended reading for President Rickard.

The legislation she is pushing for her industry backers is not only a wolf in sheep’s clothing, but goes against the sentiments just expressed by Alabama voters in November. It’s a good thing legislators have been good shepherds the last few times she’s tried to hurt their Alabama constituents.

Check out Rob Johnson’s response HERE.

Gorsuch consumer legal funding

Supreme Court Nominee Brings National Attention to the Cost of Delay in Judicial System

On day 2 of U.S. Supreme Court nominee Judge Neil Gorsuch’s Senate confirmation hearings, Judge Gorsuch did something important—he laid out the cost of delay in the judicial system on a national stage.

The costs are high. Delay puts justice out of reach for many Americans that can’t afford to sustain themselves during extended litigation.

Gorsuch consumer legal funding

Judge Gorsuch brought attention to this fact during Sen. Mike Crapo’s (R-Iowa) line of questioning (see 9:48:50). He talked about Americans’ Seventh Amendment right to trial and the access to justice issues that plague the system, lamenting that it can be difficult litigants to get a jury trial because so much time is spent in discovery. “Lawyers become poets of nastygrams…I’m not sure that’s a good thing” said Gorsuch.

“When it gets so expensive and takes so long to get to a jury, to get to a trial… defendants sometimes you feel like you have to settle, not because the case has merit, but the cost and the delay to the client are so significant in getting to a decision, that you can’t afford to do it. You’ve got to get on” he said, adding that it’s a major issue needs to be addressed.

Our legal system operates on a timetable that isn’t friendly to everyday citizens, which undermines equity. Delay weakens the justice system.

scales of justice consumer legal funding

Fifteen years ago, consumer legal funding emerged as a solution. In most jurisdictions, regular people can use consumer legal funding to pay for daily household needs as their valid legal claim makes its way through the system. Funding doesn’t go toward the cost of litigation—retaining an attorney, court costs and fees, etc.—only for personal expenses, ensuring that funding increases equity while avoiding additional burden on the system. It gives people a chance to seek a fair resolution.

Professor Jeremy Kidd wrote in a recent Law 360 article that “when legitimate claims are brought and justice served, it can actually benefit the economy by deterring bad and inefficient behavior.”

Judge Gorsuch shined a bright light on the issue, showing the negative effect delay can have on meritorious claims, to the detriment of our democracy. Ensuring equity in the system is of significant importance.

The Danger of Using Credit Cards During a Legal Claim

Cycle of debt—three little words that strike fear in the hearts of every financially independent adult. It’s something that we all work hard to avoid. We all want to be Beyoncé when it comes to money.



But with 73% of us living paycheck-to-paycheck, it’s something that is oh so easy slip into.

Cycle of Debt

And a cycle of debt can be crippling, not only because of the continued bite it takes out of your paycheck, but because it can put you one illness, accident, or job loss away from badly damaged credit, collections, and even bankruptcy.

That’s why using a credit card can be so dangerous if you don’t have a guaranteed, steady, and robust income.

Here’s an example:

Say you take out a credit card with 26% interest and charge $2,000. If you make the standard 4% minimum payment—$80 every month—it will take you 10 years and 6 months to pay off in full.

Credit card payoff 1

Another example:

You have credit card with 36% interest and charge $2,000. If you make the standard 4% minimum payment—$80 every month—it will take you a whopping 17 years and 9 months to pay off in full.

Credit card payoff 2

Now, that’s IF you can make the monthly payments in full EVERY MONTH. Sometimes that is a hard thing to guarantee.

Accidents, for example, can cause injuries that can threaten a person’s ability to go to work and earn a living as they usually do. Some people just need time to recover, others need surgery. Still others are injured permanently and need to either change careers or are unable to work at all.

And being compensated after an accident can take time. The more severe the injuries, the longer an insurance or legal claim is likely to take to reach a settlement.

That leaves people in a bind, and unable to make ends meet.


According to a recent Harris Poll survey, 62% of Americans would struggle to meet BASIC HOUSEHOLD NEEDS without 3 months of income.

So what do you do? Put it on a credit card?

Maybe, but that can be very dangerous if you’ve been in an accident, are pursuing a legal claim, and don’t have regular income. One missed payment and can damage your credit and put you on the road to bankruptcy. People often take out loans to pay off other loans, creating a cycle of debt.


That’s why maintaining access to consumer legal funding is so important.

Consumer legal funding gives people a choice to replace lost income now by selling a small part of their future anticipated recovery. Because it’s a purchase, it doesn’t create debt, isn’t connected to consumer credit, and can never put someone in collections or bankruptcy.

There’s no monthly payment, which is great when there is no other income coming in. And all costs are spelled out in dollars and cents—no interest calculations. All payments come from the settlement, so if something goes wrong with a case, nothing has to be paid back—even the funding. Nothing.

It’s a product specifically designed to help people in this situation, and something that is much safer for consumers than putting expenses on credit cards.

People should have options to avoid cycles of debt. Consumer legal funding is one of those necessary options.


Source: Credit card payoff calculations made with’s online calculator.

consumer legal funding

The Austin Lawyer: Hulk Hogan and Gawker Expose Many to Litigation Finance

In this can’t miss article, Texas attorney Eric Woomer talks about the highlights of a headline-grabbing year for litigation finance and breaks down the differences between litigation finance and consumer legal funding.

The big difference? “…the money goes to everyday people to meet basic living expenses, not to fund any litigation or pay legal bills.”

More from the article:

Funding is provided on a contingent basis, like with litigation finance, and can help plaintiffs see their day in court even if they don’t have oil money.

Most people who use it are pursuing a fair claim settlement from an insurance company after a car accident, and are out of work due to their injuries.  With 76% of Americans living paycheck to paycheck, many have found it hard make ends meet while letting the legal process work.

Professor Jeremy Kidd from Mercer University, one of the ARC Advisory Council members is referenced:

Some critics will rail against all legal finance resources alleging that funding of cases will increase litigation, encourage frivolous lawsuits, and hurt the economy. Yet, these assertions conflict heavily with Kidd’s 2015 research.  Regarding consumer legal funding, Kidd concluded that “when legitimate claims are brought and justice served, it can actually benefit the economy by deterring bad and inefficient behavior.”

Read the article HERE (page 21).

consumer legal funding

Big-Time Litigation Funding vs. Consumer Legal Funding—Advisory Council Member Writes on Hulk Hogan, Gawker, and Peter Thiel

Last month, ARC Advisory Council member Jeremy Kidd was published in Law 360 with an article that illuminates the differences between litigation funding—like was recently seen Hulk Hogan’s case against Gawker—and consumer legal funding. The piece talks about the Gawker case’s implications for on journalism and free speech, and also shows why public policy makers need to separate litigation funding and consumer legal funding when determining proper regulatory schema.

He references his own October 2015 research in the article, noting:

“With consumer legal funding… when legitimate claims are brought and justice served, it can actually benefit the economy by deterring bad and inefficient behavior.”

Kidd is Associate Professor of Law at Mercer University’s Walter F. George School of Law and holds both a Ph.D. in Economics from Utah State University and a J.D. from George Mason University School of Law. He is a preeminent thought leader on consumer legal funding, and has testified on the topic before state legislative bodies.

Read the full text Kidd’s article HERE.

Photo Credit: Flickr

consumer legal funding

Recent Survey Says 75% of Americans Are Worried About Losing Housing

Survey after survey tells us that the vast majority of Americans are living on the financial edge. More than just living paycheck to paycheck, few would be able to survive a $1,000 crisis intact. Now, a new study from the NHP Foundation (NHPF), a nonprofit affordable housing provider, shows that 75% of Americans are worried about housing stability. 57% of respondents are “concerned” or “very concerned” that they or a friend or relative could lose their housing—one of life’s most basic necessities. Another 19% are “somewhat concerned.”

Strikingly, nearly 40% of those surveyed are worried that job loss would cost them their housing. The issue transcends home ownership, issues with affordable housing, differences in income levels, and race and ethnic barriers. People from all walks are living far closer to homelessness than should be possible.

Accidents can unwittingly disrupt a person’s ability to earn an income, and you never get to stop paying rent, or the mortgage. Those bills keep coming, even if you are laid up with an injury, trying to recover. Surprisingly little protects people in these situations.

Consumer legal funding can help families stay in their homes, and regain stability in order to move on with their lives. By purchasing a small portion of a person’s anticipated recovery from his or her legal settlement—usually a personal injury claim—providers can help families can get the money they need to get by, while they wait for a full, fair settlement. Consumer legal funding gives people an option to ensure constancy during a trying time, and can improve quality of life.

Though housing is a critical public policy issue that must be addressed on a multitude of levels, it is imperative to ensure families have options now, while they work to make ends meet.

U.S. Chamber of Commerce Putting Big Business Profits Over People…Again

Everyday people in this country are struggling to make ends meet. They are living paycheck to paycheck, with little or no savings, and many have few places to turn when they face an emergency. No emergency is as tragic or heartbreaking then a death in the family. Many people buy life insurance policies to make sure their families are taken care of in the case of their untimely death, and expect the policies to be paid out in order to cover the mounting expenses that can result from such a loss.

But, as many in Illinois recently discovered, these benefits have often gone unpaid because of a loophole that allowed insurance companies to keep the money if no claim was made. So if the beneficiary didn’t know the life insurance policy existed, or if, in grief, it was forgotten, the insurance company could keep the money instead of making sure it got to those who surely needed it. And this fine loophole was something the U.S. Chamber of Commerce recently fought hard to defend—once again putting big business profits over people.

This past week, the U.S. Chamber of Commerce—through its offshoot The Institute for Legal Reform (ILR)—urged Illinois Governor Bruce Rauner to veto pro-consumer legislation that will ensure bereaved families get life insurance money their loved ones intended for them.

Before this legislation, no Illinois state law was in place compelling insurance companies to pay benefits to those who didn’t make a claim. So, many insurance companies (also paying U.S. Chamber members) didn’t—leaving more than $550 million in unpaid benefits owed to Illinois residents alone—according to the Illinois State Treasurer’s Office, which uncovered this loophole through audits.

To reiterate: The U.S. Chamber of Commerce and ILR fought to ensure insurance companies could keep the money owed to beneficiaries of their bereaved clients’ policies. These are policies that these clients paid premiums on, and gave them peace of mind before their passing.

Republican Governor Rauner—usually a pro-business ally of the Chamber—was unconvinced by ILR’s July letter, media push, and hard lobbying to kill a bill that will eliminate loophole. This past Friday, Rauner signed the bill, which passed through the legislature unanimously with bi-partisan support.

In a statement, Illinois Tresurer Mike Frerichs said “I’ve never met a man or woman who purchased life insurance with the expectation that the death benefits would stay with the insurance company rather than their family.”

The U.S. Chamber and ILR must disagree, somehow.

But, this isn’t the first time the Chamber has defended profits over people. In their fight to restrict access to consumer legal funding, the Chamber has tried to block people from having a necessary option many turn to when going through a crisis, like a car accident.

Consumer legal funding helps people replace lost income and get back up on their feet after an accident by purchasing part of the potential proceeds of a settlement for money now. Many people use it to hold out for a fair offer from an insurance company, instead of taking the first lowball offer, in an effort to ensure that they can continue to get medical treatment and recover properly long-term. But, fair offers cut into an insurance company’s bottom line.

At an Aug. 24 hearing in Chicago on the topics of unpaid life insurance policies, Frerichs said insurance companies “count on a certain number of policies not being cashed,” despite beneficiaries being entitled to, and likely in need of, the money.

Similarly, auto insurance companies count on a certain number of policies not being used, and for those where claims are made, many of those claims being settled for far less than fair value. So, anything that helps people recover fairly is viewed negatively. As a result, consumer legal funding has become a target of the U.S. Chamber of Commerce and ILR’s massive lobbying effort.

Thankfully, state legislatures, elected officials, and advocates have seen through ILR’s veil of concern for consumers, and have started acting to ensure access to consumer legal funding for those that need it. New laws out of Vermont and Indiana are two examples of legislatures acting in the interest of their constituents to preserve access.

ILR’s recent, egregious defense of loopholes benefiting insurance companies over the grieving families of bereaved clients in Illinois may have come as a shock to some. But to careful observers, it was likely unsurprising. The U.S. Chamber of Commerce and IRL defend the interest of their clients—major companies and corporations—not consumers, and often, not small business, though they claim to do so. ILR defends no one, only the bottom line.


consumer legal funding

ARC Advisory Council Spotlight: Charles Atkins, Jr.

Reverend Charles Atkins, Jr. is a community activist, pastor, and chaplain from the New York area with a deep commitment to social justice and community organizing. He serves as a bi-lingual pastor of the French Evangelical Church of New York and a chaplain at the Garden State Youth Correctional Facility in Yardville, New Jersey. Reverend Atkins joined the ARC Advisory Council earlier this year due to his interest in expanding access to justice and equality in the legal system.

He recently took a moment to chat with us about the importance of community and the challenges urban communities face. Listen below and get to know Reverend Atkins a bit better.

What makes a strong community?

“If we don’t understand that we need other people, I don’t think we understand life.” “I think there is a place for public, private, religious, educational…and industrial institutions to work together to help people in a community move forward.” 

Why is maintaining access to consumer legal funding so vital?

“One of things about consumer [legal] funding is that it gives people more time to really work out and deal with…urgent bills, or issues, or family… and be able to bring to a reasonable resolution the accident or dilemma that has come upon their lives.” 

What made you want to get involved with ARC?

“I think religious organizations, and the people that are a part of them, should be working with other organizations to benefit communities. I found that being on this advisory council is my opportunity to bring a perspective of what it means to work with people that are dealing with various challenges, and to work with an organization…that gives people hope for the future.” 

What unique perspective do you bring to the ARC Advisory Council?

“…a spiritual perspective. Spiritual in a sense of: ‘How are we not just helping people deal with their current problems, but how are we helping them prepare for a better future?'” “I’ve certainly had concrete experience with incarcerated and immigrant communities…a lot of people that are in financial situations of struggle…I’m really sensitive to the needs and perspectives of people in those types of situations.”