Justice Brandeis once said “Sunlight is the best disinfectant” – Maybe the U.S. Chamber should pay attention to his words

After remaining silent for years on the subject of consumer legal funding, why is the U.S. Chamber of Commerce, which describes itself as an organization devoted to free enterprise, aggressively using all of its might to regulate consumer legal funding out of business?

Simple.  In 2012, Ed Rust, CEO of State Farm Insurance, became Chairman of the U.S. Chamber of Commerce.

Coincidently, in 2012 the Institute for Legal Reform, the tort reform arm of the U.S. Chamber of Commerce, also started developing its elimination strategy against the consumer legal funding industry.  In a legislative blitz, the U.S. Chamber of Commerce aggressively introduced 22 Model Acts, or “bills to ban”, in 14 states in 2013. Fortunately, the reason and logic of state legislators stopped these bills from becoming laws.  However, the U.S. Chamber is on track to ratchet up their attack even more aggressively in 2014.

The real question that policymakers across the country need to ask is why State Farm and other large insurance companies are hiding behind the U.S. Chamber of Commerce?  If this issue is so important, why not put the State Farm name, or the name of any of other big name insurance companies, on this initiative to cure the so called “problem” of consumer legal funding?

This too, is simple to answer. State insurance departments field thousands of complaints each year related to customer service and delayed settlement payments to consumers involved in an injury claim.  For years, consumers have complained about the insurance company delay tactics they encounter.  State Farm cannot publicly speak out against the legal consumer funding industry without and bringing the spotlight on the insurance industry’s anti-consumer tactics.

Consumer legal funding helps consumers while they are attempting to gain a fair settlement against the big insurance companies, like State Farm. The consumer legal funding companies allow access to a small amounts of funding to help pay for essential daily needs while weathering an insurance companies’ long delay tactics for settlement.  These consumers, through no fault of their own, have been injured in an automobile accident, sometimes are unable to work and are without a paycheck.  Consumer legal funding provides a modest amount of funding to help the consumer pay for things such as utility bills, transportation, housing and food while they wait for their settlement to be heard and finalized.

State Farm and other insurance companies’ must view this service as disrupting the status quo power advantage they have historically had over consumers, and their ability to utilize the strategy of “Deny, Delay, Defend” as long as possible to pressure consumers to settle for the least amount possible.    

While consumer legal funding provides a service designed to help consumers, the U.S. Chamber of Commerce, led by the CEO of State Farm, appear to be only focused on extracting large profits at the expense and well-being of the everyday consumer. 

State Farm should come clean, and put its name on these initiatives instead of hiding behind the U.S. Chamber of Commerce.  If State Farm is going to push aggressively for insurance company protections at the expense of consumer choice and free markets, than its CEO should not hide behind the curtain while directing the US Chamber of Commerce to do State Farm’s dirty work. 

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