Quick Facts

What is consumer legal funding?

When consumers are injured, their economic losses can be compounded by the long wait for insurance companies to settle the claim. Unfortunately, more than half of the American people have $1,000 or less in emergency savings. So this is not a product that’s just for a few. Americans with jobs and families often lack the cash to make ends meet while they wait—frequently resulting in quick settlements for a much smaller sum. Legal funding is a solution that helps consumers bridge that financial gap. It allows them to pay for critical expenditures—such as a car repair, insurance, childcare, rent, and utility bills—so they can afford to wait for a full, fair settlement.

Who benefits from it?

In the last decade alone, hundreds of thousands of consumers have benefitted from legal funding. For everyday Americans who do not have emergency savings and have been hurt, consumer legal funding offers a lifeline.

Who opposes legal funding and why?

Insurance companies have spent millions of dollars working with Washington lobbyists to try and eliminate legal funding. They have much to gain from a legal process that puts pressure on consumers to settle their claims for less than fair value. In fact, over the years, large insurance companies have institutionalized a method of increasing their profits by using complex computer programs to systematically underpay injury claims. Big insurance companies have every incentive to oppose a product like Consumer Legal Funding. They dislike that Consumer Legal Funding empowers consumers by providing them a way to stay afloat financially while they wait for a fair settlement.

What are opponents doing to try to stop it?

While the legal funding industry fights for fair state-level regulation that protects consumers and preserves this product offering, the insurance industry is spending millions to lobby for laws that would end legal funding altogether. “Big Insurance” is trying to put legal funding companies out of business by fighting for government-regulated price caps and other poison pill provisions that will deprive consumers of this choice.