Major Newspapers Attack Lawsuit Funding: Insurance Company Delay, Deny and Misrepresentation Tactics Are the Real Story
Two newspapers, the Chicago Tribune and the New York Times, recently portrayed lawsuit funding companies in a very negative, one-sided way. Aside from presenting only the negative aspects of this important justice-preserving industry, the articles clearly align themselves with anti-justice forces, tort-reform advocates and insurance companies, which would limit the average citizen’s access to the civil justice system and basic fairness in the courtroom.
The first article was written in the Tribune which slammed the Illinois “Non-Recourse Civil Litigation Funding Act,” proposed legislation that would regulate how litigants receive necessities of life lawsuit funding, as their cases proceed through the court system. Lawsuit funding helps alleviate "significant financial stress" for plaintiffs who are waiting for a fair settlement. The Tribune claims that lawsuit funding companies have no interest in legal justice despite the risks they may take. What facts form the basis of this outrageous statement? I have been fighting for justice for litigants for 33 years, first as an attorney and second as a legal funding professional. Justice-seeking is at the core of what I do.
In contrast to fighting for the rights of the injured and disabled and getting them life-preserving compensation, let’s contrast that with the insurance companies? Where are thoughts of “justice” as they record obscene profits preying on cash-strapped consumers with their "delay, deny, confuse and refuse" tactics? When will the Tribune or any responsible newspaper tell the real story. It is a story of corporate greed; a story where mammoth insurance companies hoard money (premiums) stealing money, then tell policy holders to "take a hike" when it's time to pay claims? “Profit” is all an insurance company is interested in; that is how the “delay, deny, confuse and refuse policies came to be. Paying a claim has become the course of last resort for them. Accident victims must take carriers far and long into the civil justice system to achieve the basic fairness that was owed them in the first instance. There is a concerted effort to deny everything and make victims fight for their rights. Contrary to their marketing rhetoric, we are never “In Good Hands”, they are not anything “Like a Good Neighbor”, and we never receive “Fast, Fair and Friendly Service”. But, they do like taking our money in premiums, don’t they?
The Tribune article suggests that lawsuit funding will encourage more litigation, when in reality it is the insurance companies that encourage lawsuits. How, you ask? They offer unfair compensation, at the early stages of a plaintiff’s injury claim, every single time. In the battle for compensation in personal injury lawsuits, insurance companies have a significant advantage over an injured plaintiff. They will use a plaintiff’s financial hardship to their own advantage. When the plaintiff is absolutely desperate, the insurance company makes a “chump change” offer; the client is often forced to take the money to save his/her valuable assets. To avoid harshly inadequate settlements, a growing number of clients are turning to lawsuit funding companies. This do not have to happen; insurance companies could have treated claimants fairly and humanely, but they didn’t and don’t. Profits for their shareholders are all that is important to them. Thus, the real story here is insurance industry corporate greed; the lawsuit funding industry has a strong interest in justice; insurance companies and their ilk have an interest in denying or delaying that justice.
On the heels of the Tribune was an incredibly one-sided article written by the New York Times entitled, “Lawsuit Loans Add New Risks for the Injured.” Why one-sided, you ask? Let’s start with the title. My industry is the “lawsuit funding” industry; it is not the “lawsuit loan” industry. The balance of the article focuses on the cost of the service. It is true that lawsuit funding is expensive. Profits can be high, but they are calculated upon risk; the article makes light of the risk taken by litigation of investors. Here is the truth: Lawsuit funding is the practice of providing a litigation plaintiff with a cash advance, solely on the possibility that, first, a pending lawsuit will be successful and, second, that it will be successful enough to repay the funding principal and proposed profit. Litigation results are often compromised; if compromised results are achieved, lawsuit funding results will, likely, be compromised as well. There must be a successful verdict or settlement for the lawsuit funding company to profit and the lawsuit must achieve a targeted result for full profit. If the plaintiff does not win his/her case, he/she does not repay the cash advance; the lawsuit funding company relinquishes its entire cash advance. Ask any banker if that description qualifies as a “loan”.
Trial lawyers and lawsuit funding companies provide the means that give a plaintiff a fighting chance against these corporate giants. Without someone to hold the insurance companies accountable, without someone to assist plaintiffs when they need financial help, these greedy companies will take advantage of the weakest members of our society, the injured and disabled. What happens when the insurance company avoids personal responsibility, responsibility for an event that premiums are supposed to insure? The burden shifts to you and me, the taxpayers. Do you want to pay to support risks that insurance companies received billions in premiums for?
Insurance companies have the money and power to outspend and outlast the plaintiff. Litigation is risky and expensive; they use our own money (premium dollars) against us. When an industry is founded to assist plaintiffs financially, that is the basis for a negative news piece? If the Tribune and the Times are truly interested in a consumer protection news story, why not report on the obscene profits earned by insurance companies and the unfair treatment their policy holders receive when they have the audacity to use the product exactly as it was intended to be used, when they have the audacity to file a claim. Insurance is the only product in the world that penalizes you for using it exactly as you should.
Lawsuit funding is a valuable service for the right person, in the right case, at the right time. It can make a huge difference in the outcome of the litigation it supports. It combats the common practice of insurance companies using their money and power to engage in frivolous defenses designed to delay proceedings, deny recoveries, and make plaintiffs desperate to settle for less than full value. If you need a little financial assistance to stay the course, rather than settling your valuable case for pennies on the dollar, I hope you will ignore the rhetoric and seek assistance from a responsible provider of lawsuit funding services. Don’t let this nonsense prevent you, the consumer, from getting the help you need. Remember: You are not “in good hands” and they are nothing “like good neighbor”.
Watch for Part 2: Insurance Company Strategy: How To Abuse Our Civil Justice System
Mark Bello has thirty-three years experience as a trial lawyer and twelve years as an underwriter and situational analyst in the lawsuit funding industry. He is the owner and founder of Lawsuit Financial Corporation which helps provide legal finance cash flow solutions and consulting when necessities of life litigation funding is needed by a personal injury plaintiff. Bello is a Justice Pac member of the American Association for Justice, Sustaining and Justice Pac member of the Michigan Association for Justice, Business Associate of the Florida, Tennessee, and Colorado Associations for Justice, a member of the American Bar Association, the State Bar of Michigan and the Injury Board.