legal funding

Legislation From Vermont Sets New Standard

Politicians often talk about the need for good public policy, good lawmaking. But, finding real agreement can be difficult.

Well in Vermont, they did it—implementing sweeping consumer protections while maintaining access to consumer funding.

How? They did their research, doing an exhaustive study of the issue. They listened to their constituents.

They saw the need, and decided put consumer legal funding in the right box, not just the existing one.

They chose the right consumer protections—ones that will be meaningful, and match our industry best practices. And, they ensured the availability of legal funding to those that need it.

This is How We Do It. This is good public policy. Well done, Vermont.

Read more about it in our press release “#Trending–Another State Adopts Consumer-Friendly Regulations for Consumer Legal Funding.” 

Memorial Day Reminds Us That Freedom Isn’t Free

Our Constitution, our representative government, our right to live as free people. Memorial Day reminds us of those who have given their lives for our country—died defending us, and defending the tenants which we live by.

Choice is a big part of the American way of life, and maintaining that right has been important from its founding. Our nation’s seventh president said, “The duty of government is to leave commerce to its own capital and credit as well as all other branches of business, protecting all in their legal pursuits, granting exclusive privileges to none.” Andrew Jackson

That is why we work so hard to maintain access to consumer legal funding and people’s right to seek justice for years to come.

We at ARC thank the members of the military and their families for giving that opportunity.

consumer legal funding

New Poll: Two-Thirds of Americans Would Struggle to Cover $1,000 Crisis

The Associated Press-NORC Center for Public Affairs Research just released a new poll concluding that seventy-five percent of people in households making less than $50,000 a year would have difficulty coming up with $1,000 to cover an unexpected bill. For those making $50,000 and $100,000, the difficulty decreased to only 67 percent.

For those of us who have had disaster strike, these numbers aren’t surprising. They are reality. And when you have been in an accident, are injured, and can’t work, things get even more difficult.

That’s why maintaining access to consumer legal funding is so important. Consumer legal funding gives people an option when savings runs out.

Photo Credit: Paul Maxwell via Flickr

legal funding

The Middle Class Needs to be Empowered, Not Shamed

Middle class families are supposed to have achieved some degree of financial stability, but in America, most are still likely to be left with few options when faced with an emergency. According to the recent Atlantic article, The Secret Shame of Middle-Class Americans, half of respondents a recent Fed survey said that to come up with $400 for an emergency they would have to borrow or sell something, or they would not be able to come up with the money at all. Like the award-winning author of the article referenced above, Neal Gabler, you can be successful in your career, appear reasonably prosperous, and be down to your last $5 in the days before payday. “’If anyone says he’s sailing through, he’s lying.’ That might not be entirely true, but then again, it might not be too far off.”

And it’s not just an issue of liquidity—people not having enough cash in their checking or savings accounts. Edward Wolff, an economist at New York University found that there isn’t much net worth to draw on. Net worth has declined steeply in the past generation—down 85.3% from 1983 to 2013 for the lowest income households, down 63.5% for lower-middle class households, and down 25.8% for the middle and upper-middle class households.

Research funded by the Russell Sage Foundation shows that the inflation-adjusted median net worth of the household was $87,992 in 2003. By 2013, it had declined to $54,500—a massive 38% drop. Though the recession and bursting of the housing bubble in 2008 may have contributed, the decline for the lowest earners began as early as the mid-1980s.

Emergencies and accidents have the potential to combine the loss of income, medical bills, mortgage and miscellaneous costs to rock a family to the core and chip away even further at net worth. If you’ve been in an accident, when you are going through a financial crisis, the long wait for an insurance provider to settle fairly can be impossible to weather alone, even for those who appear successful.

Having financial options like legal funding empowers middle class families and gives them an option. Financial insecurity may not be talked about as much as it should be, but it’s affecting more people than ever. Middle class families need to be empowered, not shamed. They need lifelines. Having $5 left before payday is a reality—and a reality that’s being experienced regularly.

Legal Funding

In The Real World, Tort Cases Don’t Break the Bank

It’s time to set the record straight. There’s a major misconception that personal injury cases are some get-rich-quick scheme. The real world truth is that personal injury cases are rarely pursued. When they are, people aren’t using cases to try and hit the jackpot. And there’s undeniable evidence to prove it.

A new study by the Center For Justice and Democracy at New York Law School states that 75% percent of tort judgements are less than $12,200. That’s not exactly Scrooge McDuck money.

People who are pursuing a fair settlement aren’t looking to get rich, but instead looking to get back on their feet.

Also, contrary to popular belief, tort or personal injury lawsuits only compromise a tiny percentage of civil cases (7% to be exact). Yet, insurance companies and their allies still argue that these cases saturate the legal system. That’s obviously not based in fact.

After a major car or work accident, victims are asked to cover out of pocket costs and even medical bills.

Injury victims aren’t “sue-happy.” But, they deserve to settle fairly.

Legal funding can often help them do that.

legal funding

The Common Denominator of American Families

America has a reputation of being a melting pot, filled with diverse people. Our country is made up of those differing in race, ethnicity, religion, education, economic opportunity. Yet, there is one thing that most of us all have in common: we aren’t prepared to deal with a financial crisis.

Savings or no savings – the average household remains ill-prepared to withstand a financial setback, according to a recent study released by The Pew Charitable Trusts. Setbacks don’t discriminate—they affect families of all races similarly. Even those with higher incomes can be financially disrupted when facing an emergency.

Unfortunately, many families don’t plan for the unexpected expenses or lost income that could come from being involved in an accident.

The median household does not have enough savings to replace even one month’s income. So, time and time again, families affected by a crisis need options. Consumer legal funding is the lifeline many people need to stay afloat.

A common denominator of American families—we need to be able to access to consumer legal funding if disaster strikes.

Legal Funding

80% of Lawsuits Brought Against Consumers by U.S. Chamber Members–Not the Other Way Around

In a recent article by Joanne Doroshow of the Center for Justice and Democracy at New York Law School, Doroshow pointed out a major hypocrisy with the U.S. Chamber of Commerce. Although they say cases against corporate entities are killing business and clogging the court system–the reality is that the Chamber’s corporate members file the vast majority of all lawsuits:

7% of civil cases (and decreasing every year) [are] brought by sick, injured and harmed consumers against corporate lawbreakers. Of the rest, 80 percent are brought largely against consumers by Chamber members

Tom Donohue, President of the U.S. Chamber said in 2014, “Our Institute for Legal Reform is fighting the expansion of lawsuits on all fronts—in the Congress, in the federal agencies, in the states, and even around the globe where U.S. companies are getting sued.” Yet, as Doroshow states in her article:

The U.S. Chamber itself prides itself on its very own “litigation center,“ which files suit, on average, three times a week.

The American justice system was established to help people with legitimate cases seek redress. Legal funding can help people do that by helping them make ends meet during that process. The U.S. Chamber is concerned with minimizing the number of lawsuits against their member organizations and boosting their bottom line. That’s it. Plain and simple. But, there is a cost to everyday people in this country.

Read more of Doroshow’s article HERE.

Op Ed from Our Executive Director: Judge Alabama Legislation on Results, Not Intent

Steve Jobs used to say there are downsides to everything; unintended consequences to everything. But, in public policy, unintended consequences can be minimized by looking at its potential results—not solely at its intentions. Too often, well-meaning legislation ends up crushing those it was supposed to help. You’ve seen it a thousand times before. And now, it could happen again—to the detriment of everyday people in this state.

State Rep. Chris Pringle is sponsoring HB 395 which aims to enact consumer protections. But, it would have the opposite effect—inflicting massive harm on consumers and consumer choice. Its industry-destroying price controls would force legal funding providers from the state, leaving everyday people in the lurch.

Here’s some background: You probably know someone who’s been given the run-around by an insurance carrier after an accident. For people who’ve been in an accident and are pursuing a legitimate legal claim, consumer legal funding can be an alternative to taking an unfair, lowball settlement offer from an insurance company just because day to day expenses can’t be met.

Legal funding can help pay for rent, utilities, or a car payment—giving people time to settle fairly. With 76% of Americans living paycheck-to-paycheck, a lot of us couldn’t make the bills for months on end, and fight for what’s fair, on our own.

Janet from Mobile needed the option when an insurance company dragged out her claim. “Without access to consumer legal funding, I would have to choose to pay my bills or continue healing… It helped me get my life back,” she said. Will from Huntsville needed it, too. “My lights would have been cut off and I wouldn’t have been able to afford my medicine… When I needed help, legal funding provided it.”

Rep. Pringle’s legislation would unintentionally eliminate people’s ability to access this lifeline by eliminating legal funding providers’ ability to operate. This is not consumer protection. This would hurt everyday working people like Janet and Will.

People need more choices, not less. Eliminating the option doesn’t eliminate the need.

As a former state lawmaker, I know how hard it can be to find ways to protect consumers, implement sensible regulations, and support free market principles at the same time. But, when it comes to legal funding, we did it in Oklahoma.

We brought comprehensive regulation to an industry that had operated without regulation for years by making sure proper consumer protections were put in place, that consumers were empowered to make informed financial decisions, and that bad actors couldn’t operate.

And, it worked. People now have access to a highly competitive market where people can find affordable legal funding if they need it.

Good public policy focuses on outcomes and minimizes unintended consequences. Real consumer protection and maintaining options—Rep. Pringle, these are the results you want.

Rob Johnson is the Executive Director of the Alliance for Responsible Consumer Legal Funding (ARC). He is a former Republican member of the Oklahoma State Legislature who served in the Oklahoma State Senate and Oklahoma House of Representatives.

legal funding

Consumers Speaking Out: Letter to the Editor Runs in The Tennessean

Check out the Letter to the Editor HERE.

Over the Easter weekend, I sat down and watched the video from a Tennessee General Assembly committee meeting from last week where I submitted written testimony. The topic of the hearing was very important to me — something you don’t know about until you need it urgently — consumer legal funding.

In 2013 my husband was hurt in a fall that was not his fault. With over $30,000 in medical bills, we have been so burdened. Everything has a co-pay or a deductible.

In most states, legal funding can help people who’ve been in an accident get money from a potential settlement upfront to cover daily expenses, like medication.

After the accident, we tried desperately to get legal funding and found it impossible. We contacted our legislator and found out that due to a law passed in 2014, it’s almost completely unavailable in Tennessee.

Eventually, we discovered that the insurance industry led a push to eliminate the use of legal funding because it’s an alternative to taking an unfair settlement offer from an insurance company. Everyday people aren’t made of money. Savings run out, and insurance uses this to pressure people into low settlements and increase profits.

They eliminated our option, but not our need.

I urge the members of the Tennessee legislature to stand up to insurance companies motivated by profit and change the law in favor of your constituents. You don’t know how vital access to legal funding is until you need it as a lifeline.

Kathleen Wisenewski, Mt. Juliet 37122

We thank Kathleen for bravely speaking out and for bringing attention to this important issue. Our thoughts are with her family as they go through this trying time. We hope that the Tennessee General Assembly will listen and act.

legal funding

In Tennessee, Consumers Are Shut Out of Choice, Financial Options

From our press release: Games aren’t just being played in Nashville’s Bridgestone Arena—a game of the strong verses the weak is being played just down the street, in the state capitol building. Big Insurance is using its influence and power to prevent consumers access to an important financial tool called legal funding. And in the end, the people of Tennessee are the ones losing out and getting crushed.

Kathleen Wisnewski of Mount Juliet went in search of legal funding after her husband was injured in 2013. With over $30,000 in medical bills, Wisnewski has been under enormous stress to make ends meet. “Everything has a co-pay or deductible. One medicine costs $700, and we’ve started just forgoing treatments. We have no family to lean on. I don’t know how we are going to make it.”

For people who have been in an accident and are pursuing a legitimate legal claim, consumer legal funding can be an alternative to taking an unfair, lowball settlement offer from an insurance company just because they can’t meet their daily living expenses. Insurance companies know legal funding can help normal people settle fairly. So, motivated by profit, they have used their immense lobbying power to quash this consumer-friendly option.

Last month, Tennessee lawmakers refused to forward House Bill 1161, which intended to roll back improper regulation passed in 2014. That legislation effectively barred consumer legal funding from the state by making it all but impossible for providers to operate. The bill, sponsored by Rep. Susan Lynn (R- District 57), would have provided a lifeline to injured consumers inTennessee.

Wisnewski was dismayed when she found out that legislators didn’t forward the bill. “It’s just cruel to refuse us the option. We need someone to help!”

To read more, and check out or other press releases, click HERE.