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In a far fetched ploy to malign an industry that helps the little guy in his battle against Big Insurance, the Insurance Lobby, using the U.S. Chamber of Commerce as its front, has attempted to paint the Internet as a unseemly place to promote a product. In an April 26 blog by the U.S. Chamber's Institute for Legal Reform subtitled "the good; the bad; and, the ugly", the Insurance Lobby attempts to paint Legal Funding companies in a poor light because they have made use of the Internet as a place to make information available about their product.

Legal Funding helps the little guy in a dispute with Big Insurance over the fair value of a consumer's claim.  Consumers use Legal Funding as a way not to have to cave to financial pressures and accept a low settlement because of an imbalance of financial resources.  

The Insurance Lobby blog harps on a website that promotes that it helps people find "in minutes" the money they need to make it through the time it will take for their lawsuit to resolve.  The website,, quotes the American Bar Association as describing it as the Lending Tree for Legal Funding.  

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The proxies of the Insurance Industry flexed their financial muscle and disseminated misinformation to push a gullible Arkansas General Assembly into passing a "Legal Funding" law that will eliminate consumer choice for anyone faced with confronting the Insurance Industry for a fair settlement when they have been injured in an accident.  Possibly distracted by Arkansas' version of a Religious Freedom Act, Governor Hutchinson signed the bill into law, and the Insurance Industry celebrated another victory in its quest to continue to increase the leverage it has over the consumers it confronts as a defendant in litigation.

Using its tired and frequently discredited tactic of characterizing Legal Funding transactions as loans, the U.S. Chamber as lead facade for the Insurance Industry also pulled off its charade that it was helping Arkansas achieve tort reform when nothing could be farther from the truth.

Legal funding providers help injured people with a financial bridge that allows them to pursue a fair settlement to their legal claim when confronting an insurance company with vastly greater financial resources.  Insurance companies have not appreciated this challenge to their practice of pressuring people who have suffered economic losses into discounted settlements.

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Billed as a tort reform initiative and a way to protect consumers, a bill promoted by front groups for the insurance industry lobby to restrict consumers from accessing legal funding (aka lawsuit lending) is working its way through the Arizona General Assembly. Senate co-sponsors of the bill are slowly learning that the bill does not address the issues they sold them on signing onto the bill - tort reform and consumer protection.  

Legal funding allows people to sell a small portion of their legal claim so that they can pursue the full value of their claim without the financial pressures that might force them to settle early and well below fair value. These people did not ask to be injured, or to be in a dispute with a defendant insurance company that has superior financial resources. Legal funding requires no monthly payments, no debt, no personal requirement to repay.

Insurance companies have been aggressively attempting to preserve the status quo, and restrict the options of those they face in litigation. Their legislative initiative against legal funding is one more prong of this strategy, and they have been pushing this initiative with false claims about legal funding.

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The Arizona Chamber is acting like it has a new tort reform trophy in its grasp with recently introduced legislation into the Arizona General Assembly, SB1403, targeting consumer legal funding transactions.  

Instead, the legislation it is promoting would hurt Arizona consumers and provide no benefits to Arizona small businesses. In fact, it might harm Arizona small businesses because legal funding consumers say that the primary reasons they need to make use of legal funding it so pay for responsible items such as rent, mortgage payments, insurance bills and groceries.  One might conclude that small businesses would be better served by working class people living up to their financial commitments than by people who have to go into hiding when their creditors call.

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The Arizona Chamber has decided to take a run at capping rates on legal funding in Arizona to push its agenda of banning legal funding as a cornerstone of its tort reform movement.  Yet interestingly enough, in its 2015 agenda, one of the Arizona Chamber's items is to "oppose limits on interest rates", as state here in its glossy online brochure under the heading "Promote Free Market Delivery of Financial Services" on page 33.

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State Farm responds by pushing to prohibit Legal Funding from Indiana through HB 1340

Tomorrow, an Insurance Industry promoted bill (HB1340) sponsored by Indiana State Representatives Matt Lehman and Terri Austin will have a hearing in front of the Indiana House Financial Institutions Committee.  The bill is a repeat of last year's unsuccessful bill to regulate Legal Funding companies operating in Indiana out of business.  State Farm and the other special interest groups for insurance, such as NAMIC, were vocal supporters last year, and will likely again appear to testify.

A little history on why insurance Goliath State Farm and its minions would be such vocal supporters of denying Hoosiers of access to this product may be warranted.  So let me take you back to a 2006 Indiana hail storm and the story of an Indiana citizen who got in the crosshairs of State Farm by helping policyholders that were getting screwed.   His name is Joe Radcliff, and he decided to hold State Farm accountable for its responsibility to pay for hail damage claims.  The option to access Legal Funding, which State Farm is attempting to eliminate now through legislation, helped Radcliff defend himself from State Farm’s wrath and recover $17 million for the bad acts State Farm performed in its attempts to destroy him.

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The debate over how to properly regulate the legal funding (aka presettlement finance or lawsuit lending) industry has come to the New Jersey General Assembly courtesy of Democratic lawmakers John McKeon, Joseph Lagana and Nia Gill.  The issue provides an opportunity for Democrats to see if they can help consumers with reasonable protective legislation without hurting them through over-regulation that eliminates this option for New Jersey consumers.

The debate over regulation of the industry started in 2005, when then Attorney General of New York Eliot Spitzer's office investigated the industry and came to an agreement with the primary companies providing these services over best practices for transparency, disclosure and protection of the consumer's relationship with his or her attorney.  The New York Attorney General recognized that the nature of these transactions were asset purchases, and distinct and separate from loan products because no consumer installment payments are collected and the consumers have no obligation to repay the legal funding companies.  The legal funding companies are only repaid if the claim is successful and proceeds are sufficient to repay the legal funding company along with other lien holders.

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In its online newsletter, the U.S. Chamber of Commerce expressed its outrage that the head of the CFPB, Richard Cordray, criticized its Big Bank constituents that issue debit cards and offer ATM withdrawal services, and in particular a situation where the effective charge of overdraft fees resulted in a 17,000% APR.

Listen to the advocates of payday lending, and you will often hear them explain how their high (and fully disclosed) APRs are often a lot less than their consumers pay at alternative services offered at Big Banks that do not provide the same disclosure levels for the fees they charge.  The CFPB's Cordray's 17,000% APR example makes that point clear.

How refreshing to know that the U.S. Chamber of Commerce finds 17,000% APRs defensible, and that the U.S Chamber of Commerce feels the need to take a bold moral stance against anyone who might attempt to distort and manipulate data to fit their needs.  Perhaps they feel that their franchise on distortion and manipulation has been violated?  

I am sure that environmentalists that hear the Chamber's rhetoric on clean coal, and the trial lawyers that have to listen to their propaganda on tort reform, will be sympathetic.

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Last week, the largest national consumer legal funding company, Oasis Legal Finance, announced that it is leaving Tennessee in what is expected to be an exodus of all the national consumer legal funding companies after the insurance industry triumphed in pushing a bill through the Tennessee General Assembly that makes operating in Tennessee too risky and too expensive for legal funding companies.

In a bill that was short on consumer protections and long on protecting the insurance industry from another industry it did not like, the U.S. Chamber of Commerce pushed SB 1360 through the Tennessee House with only 2 votes to spare.  

Consumer legal funding allows consumers that are battling with insurance companies (over claims they have for injuries suffered at the hands of defendants represented by these insurance companies) to sell a small fractional interest in the proceeds of their legal claim.  These sales happen when consumers consult with their attorneys, and are advised that they should persevere in pursuing their claims versus taking low current settlement offers.  Consumer legal funding companies provide these consumers with an alternative economic option to taking immediate settlements that their attorney advise are not in their interest.  

Naturally, State Farm, Allstate, USAA and the P&C Insurance Industry in general (pile on industry trade groups NAMIC and PCIAA) are not fans of this product, and have mobilized their large entrenched lobbying force - including the resources of the U.S. Chamber of Commerce - to drive legal funding out of the states where they have clout.  They have done this in Tennessee through the adoption of an onerous bill that has anti-business provisions that the U.S. Chamber of Commerce member companies would never want to be subject to themselves.

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As previously reported, the U.S. Chamber of Commerce and LABI (the Louisiana Association of Business and Industry) went to the well for big insurance and big business in Louisiana recently, attacking the Louisiana Attorney General's right to retain outside counsel to sue Big Business members of the U.S. Chamber of Commerce, limiting local government rights to sue polluters (including putting the kibosh on existing lawsuits to clean up the Bayou's coastline and marshlands), and thwarting a consumer protection bill, adding protections for consumer legal funding, that would have mainstreamed the ability of Louisiana citizens to sell off fractional interests in their personal injury claims against big insurance.

I wrote about these aggressive actions to tilt the playing field even more in the favor of these special interests in the recently concluded Louisiana General Assembly in my last diary, Louisiana Assembly caters to Big Business and Big Insurance over Louisiana Citizens

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Big Business and Big Insurance have not been shy about moving the ball in Louisiana to limit their exposure to litigation and claims for wrong doing in Louisiana.  And making the right campaign contributions can certainly be cheaper than paying up for their liabilities if they do it right.  They had an awfully aggressive session in this year’s Louisiana General Assembly, using the local state chamber, LABI (Louisiana Association of Business and Industry), and the U.S. Chamber of Commerce to front their special interests at the expense of Louisiana citizens.

During the recent legislative session, these insurance and business funded special interest advocacy groups used their lobbying clout to fight local Louisiana governmental bodies, Louisiana Attorney General Buddy Caldwell and consumers that use legal funding, all at the behalf of Big Business and Big Insurance.

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Former Georgia Attorney General Thurbert Baker of McKenna Long and Aldridge is a well paid and articulate advocate for the U.S. Chamber of Commerce.  So why does General Thurbert Baker neglect to disclose that he is a paid spokesman and lobbyist for the U.S. Chamber of Commerce and its Institute for Legal Reform (the U.S. Chamber of Commerce's Tort Reform arm) in their paid advocacy effort against consumer legal funding (or lawsuit lending as Thurbert Baker prefers to label it)?  He recently penned an editorial for The Advertiser in Lafayette, Louisiana, (link provided below) where true to form he discloses his law firm and past as a former Georgia Attorney General and State Rep, but fails to mention his paid relationship with the U.S. Chamber of Commerce.

Perhaps Thurbert Baker has concerns that disclosure might diminish his messaging that he is looking out to protect consumers?
Perhaps disclosing the truth that Thurbert Baker works for the same insurance companies that are defending themselves in the consumers' lawsuits might diminish his credibility?  
Perhaps Thurbert Baker assumes that the citizens of Louisiana and members of the Louisiana General Assembly already know about McKenna Long and Aldridge's billing rates and corporate clients?  
Perhaps Thurbert Baker feels the name Institute for Legal Reform sounds too Orwellian?
Perhaps people should know of Thurbert Baker's affiliation already because he took a selfie with U.S. Chamber of Commerce CEO Tom Donahue that went viral?

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