Lawsuit Lending

Lawsuit lending is a financial practice that provides “up-front” cash to plaintiffs to cover immediate expenses during litigation. These loans typically come with sky-high interest rates and fees – as much as 200 percent – that can leave borrowers with little to no recovery. Repayment is dependent on the plaintiff recovering some sort of monetary compensation, through either a settlement or verdict. This unscrupulous business practice only leads to prolonged litigation and unjust recovery for a plaintiff and creates conflicts of interest that distort the fundamental nature of the civil justice system.  Read More...

Lawsuit lending can greatly alter a plaintiff’s decision-making process, leading them to reject a reasonable settlement offer for the chance at obtaining a higher verdict in court in order to pay off a high-interest loan. This jeopardizes the chance of any recovery, as litigation could result in a lower than expected verdict or a judgment in favor of the defendant. It also increases costs for defendants, who are forced to endure prolonged litigation.

There is also the ethical concern with inserting a third party into the case that compromises the interests of plaintiffs. It creates conflicts of interests for plaintiffs’ lawyers, who may develop referral relationships with certain lawsuit lenders and be expected to “steer” clients to those lenders.

ILR works to pass legislation that would provide safeguards against abusive lawsuits, and aims to provide transparency to all associated parties during litigation. Funding arrangements are often kept out of the public eye and hidden from parties and judges involved in litigation. The Litigation Funding Transparency Act would not only require third party litigation funding arrangements be disclosed during litigation, but also promote adequate recovery for plaintiffs and provide an overall unbiased civil justice system.


Suggested Resources


All Results for Lawsuit Lending

  1. 2019 Lawsuit Climate Survey Ranking the States Videos

    September 17, 2019 | Video | Watch

  2. 2019 Lawsuit Climate Survey: Press Video

    September 17, 2019 | Video | Watch

  3. In the News Today - August 21, 2019

    August 21, 2019 | News

    Law Firm, Lawsuit Lender Spat Headed to Mediation... Read More

  4. In the News Today - August 16, 2019

    August 16, 2019 | News

    Lawsuit Lender Faces Lawsuit After Charging "Over 100 Percent" Annual Interest Rate... Read More

  5. Lawsuit Lenders, Plaintiffs' Lawyers, Doctors Seemingly Organizing "Litigation Networks" in Georgia

    July 01, 2019 | News

    A report from the Commercial Carrier Journal discovered what appears to be an organized "litigation network" in which lenders, plaintiffs' lawyers, and doctors have created a system to inflate claims against insurance companies after trucking accidents.... Read More

  6. Charges Brought Against Doctor, Businessman In Lawsuit Lending Scheme

    May 28, 2019 | News

    Charges have been filed against a businessman and a doctor who orchestrated a scheme to lure women into surgery that was paid for by lawsuit loans to boost potential settlement values, the New York Times reports. ... Read More

  7. Is Nevada the Next State to Crack Down On Predatory Lawsuit Lending?

    May 22, 2019 | News

    The Nevada Current has a story on the push in the state legislature to regulate lawsuit loans that often come with sky-high interest rates.... Read More

  8. Customers Sue Lawsuit Lenders Over Alleged Illegal Rates

    May 02, 2019 | News

    Two Missouri residents have become the latest lawsuit loan customers to sue their lenders over high interest rates, Legal Newsline reports.... Read More

  9. Sixth Circuit Blocks Attempt to Collect Lawsuit Loan With 79 Percent Interest

    April 29, 2019 | News

    The Sixth Circuit Court of Appeals denied a lawsuit lender's attempt to collect the $1.5 million it says a Kentucky man owes them from four loans stemming from a 2008 lawsuit, Bloomberg Law reports. ... Read More

  10. In The News Today - February 21, 2019

    February 21, 2019 | News

    In Latest Twist, Lawsuit Lenders Ask Court to Stop Settlement Payments in NFL Litigation... Read More