VERONA, N.J., Feb. 26, 2018 /PRNewswire/ -- Legal-Bay, LLC The Pre-Settlement Funding Company, announced today that it is in favor of uniform state regulations being issued on an industry-wide basis.
Recently, the New York Post and New York Times have written several articles taking aim at the legal funding industry, including suggestions that lawsuit funding harms consumers and generates frivolous litigation. Legal-Bay believes that a uniform system of state regulation will eliminate questions about fair and reasonable rates for consumers, all of whom are plaintiffs in lawsuits or who have filed claims for compensation in large disaster cases (for example, for compensation for businesses devastated by the BP Deepwater Horizon Disaster), to pay for lawsuit funding services. A uniform nationwide system of state regulation will furnish consumers, law firms and lawsuit funding companies with confidence and clarity that they are all working for a common goal, to advance and preserve the financial interests of individuals and small businesses in need of funds during a lawsuit or other dispute resolution proceeding.
Legal-Bay takes this opportunity to correct the misleading and erroneous information in the recent New York Post and New York Times articles to better educate the public and legislators regarding legitimate, valuable services lawsuit funding provides to individuals and small businesses in need of funding. These services maintain some sort of financial stability, avoiding financial calamity, during the litigation and resolutions of legitimate claims against third parties in state and federal courts and other claims resolution forums.
- Lawsuit Funding does not cause or create frivolous litigation. Lawsuit funders provide needed monies to plaintiffs and claimants in need of cash-flow while a litigation or other dispute is pending. Lawsuit funders are essentially investors. They do not distribute funds to individuals and small businesses engaged in frivolous claims. A frivolous claim is a poor use of capital and for an obvious reason: A frivolous claim will not succeed and the legal funders will not recover any of the monies advanced to a consumer engaged in a dispute resolution proceeding. Lawsuit funders do not provide monies to a plaintiff or other claimant unless and until a lawyer, not affiliated with or employed by the funder, has already reviewed the merits of a claim and agreed to represent the plaintiff or claimant on a contingency basis. Most Legal funders do not provide funding to individuals and businesses that are represented by attorneys charging fees at an hourly billable rate. The attorney representing the plaintiff must represent to the legal funder that he or she has a good faith basis to believe in the merits of the claim that the attorney is bringing on behalf of the client. (It is, of course, unethical and illegal for an attorney to guaranty or promises a successful outcome, and they never do.) Legal funders only provide funds to individuals and entities with potentially meritorious claims. For newspapers to assert that the lawsuit funding industry creates frivolous litigation, that in-turn harms taxpayers, is simply wrong.
- Lawsuit Funders do not prey on consumers/plaintiffs. Funders are here to help individuals and small businesses from a destructive financial situation caused by physical and/or economic injuries and damage, caused by others. By giving these potential consumers of legal funding services with options to decide if funding is the appropriate step to take while a dispute is pending. Taking away this option by banning legal funding consumers are deprived of an option – not available from the government – to receive funds, in an amount chosen by the consumer – to assist in meeting their personal or business-related financial obligations during the pendency of the dispute resolution process. Legal funders assist, in a modest way, of leveling the playing field for individuals and small businesses who are often fighting large corporate interests fortified by aggressive defense counsel.
- Lawsuit Funders provide surgical funding and healthcare options when insurance companies fail to pay. A frequent occurrence is a physically injured individual is injured by the negligence or wrongdoing of another, but cannot get the surgical care needing surgery or other procedure to recover from their injuries. Defendants' insurance companies are often unwilling to pay for necessary surgeries because that implies liability on their part of their insured, and enhances the value of the plaintiff's claim against the insured. Plaintiffs often do not have sufficient (or any) insurance of their own to pay for necessary surgeries and other procedures necessitated by their injuries. Lawsuit Funders alleviate this fundamental inequality between the injured individuals and the corporate and insurance interests alleged against them by working with the plaintiff's lawyer and medical providers to get the individual plaintiffs the surgical care and rehabilitation services they require.
- Lawsuit funders provide reasonable, competitive rates which, in most instances, are reviewed and approved by the consumer's attorney before the consumer agrees to receive legal funding. In recent years competition among legal funders has substantially decreased funding usage rates. These rates comply with the hodge-podge of rates established by states which have statutes and regulations governing legal funding, and also are compliant with proposed legislation in other states that are now considering regulating the legal funding industry. Lawsuit funders are not looking to take the "lion's share" of the recovery from a successful plaintiff or claimant. Funders seek a fair return on their advances, a return sufficient to compensate for the risk associated with funding a claim (i.e., the claim will be unsuccessful and the funder will not receive even the monies initially advanced to the plaintiff) while enabling the plaintiff to retain the substantial majority of the recovery. In this respect legal funders, like private insurance companies, perform a public service which is amenable to, and should be, subject to uniform state regulation.
- Lawsuit funders do not charge plaintiffs any funds out-of-pocket expenses, no matter the amount of recovery by plaintiffs. In most instances, if the ultimate value of a plaintiff's recovery is not substantial or far below initial expectations, lawsuit funders work with the plaintiff's law firm to reduce the funder's return in order to have a fair resolution for the plaintiff, the plaintiff's attorney, and the funder.
- Lawsuit funding contracts clearly establish the number of funds being advanced, how that amount is calculated, and the precise amount of the funder's return in the event of a recovery through a settlement, judgment or otherwise. Contrary to assertions that plaintiffs are never sure of what they owe when they get their final bill, most funding contracts are very clear in disclosing every payback in the allotted times that it hypothetically takes for a case to settle. The payback disclosure is ultimately up to the plaintiff to decide if funding makes sense for them or not at that particular time. If a plaintiff does not want to proceed, then there is no charge whatsoever.
In its funding contracts, Legal-Bay engages in a full and accurate disclosure of the terms and conditions of the funding to provide to individuals and small businesses. Legal-Bay informs clients that if they have other avenues in which they are able to borrow funds, or can obtain funds at a lower rate of return, to do so. However, the fact remains that some of Legal Bay's clients face eviction, car payments, and the like; or need to purchase food or rebuild a business during the dispute resolution process, but are unable to do so without financing from Legal-Bay. Ultimately the cost of receiving funds from Legal-Bay is the better alternative to avoid the financial and human calamity which would flow from not receiving litigation funding at all. Many of Legal-Bay's clients are appreciative that they had a legal funding organization to provide them with funds to stabilize their lives and businesses when no one else would do so.
Legal-Bay's CEO, Chris Janish, commented on the regulatory environment, "We are confident that uniform state regulation with reasonable rate caps will be a positive to both our business and our clients that we are dedicated to assisting. Our rates are amongst the lowest in the industry already, and regulation will give credibility and stability to an industry that is grossly misunderstood by the media. In my opinion, consumers do not want funding taken away from them. On the contrary, they want policymakers, legislators and regulators to design a uniform regulatory framework that benefits all participants in the legal funding industry, and protects consumers utilizing the funds provided by Legal Funders throughout the United States. We affirm our position today that Legal-Bay welcomes a fair and reasonable regulatory system in every state throughout the country, once and for all."
For law firms in need of a surgical funding company for their client's, or for plaintiffs in needs of a lawsuit funding cash advance (not called a lawsuit loan, lawsuit loans, settlement loan, or settlement loans ) feel free to apply online at: http://lawsuitssettlementfunding.com or by calling the company's toll free hotline at 877.571.0405.
Contact: Chris Janish, CEO Email: ChrisJ@legal-bay.com
SOURCE Legal-Bay, LLC