ILNews

Pre-settlement lenders say rate cap could doom industry

Back to TopCommentsE-mailPrintBookmark and Share

Representatives of businesses that provide pre-settlement funding to plaintiffs said they would be forced out of Indiana by a proposal to cap their returns at 25 percent, after which a House committee advanced a bill that would do just that.

The House Insurance Committee on a 10-2 vote advanced House Bill 1205 that for the first time would regulate cash advances for plaintiffs who have cases pending. The bill defines the business as “civil proceeding advance payment transactions.”

Supporters of HB 1205, including bill author and Insurance Committee Chairman Rep. Matt Lehman, said the bill is aimed at curbing abuses of an unregulated industry in which some plaintiffs have been charged fees equal to annual interest rates of 150 percent or more.

Industry representatives said they back regulation, but that the bill’s proposed maximum return of 25 percent more than an advance – for instance, a $12,500 payback on a $10,000 advance – would put them out of business in Indiana.

Representatives of Oasis Legal Finance and others testified that the industry provides needed cash for plaintiffs facing financial hardship ahead of settlement of their cases. They said the transactions aren’t loans because nothing is owed if a plaintiff doesn’t win a case or receive a settlement. Fees charged reflect the risks of a business in which 10 to 20 percent of advances are losses, they said.

An Oasis representative said the legislation was “an insurance protection bill, not a consumer protection bill.”

But insurance and business groups said the bill is needed to rein in what they said is a predatory business that can deprive litigants of their settlements and prolong litigation.

A State Farm Insurance representative acknowledged the need, but said nothing justified triple-digit interest rates. He also said litigation should “not be turned into a stock market for investors.”

Lehman said after the bill advanced that the 25 percent cap was negotiable.   






 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. Bob Leonard killed two people named Jennifer and Dion Longworth. There were no Smiths involved.

  2. Being on this journey from the beginning has convinced me the justice system really doesn't care about the welfare of the child. The trial court judge knew the child belonged with the mother. The father having total disregard for the rules of the court. Not only did this cost the mother and child valuable time together but thousands in legal fees. When the child was with the father the mother paid her child support. When the child was finally with the right parent somehow the father got away without having to pay one penny of child support. He had to be in control. Since he withheld all information regarding the child's welfare he put her in harms way. Mother took the child to the doctor when she got sick and was totally embarrassed she knew nothing regarding the medical information especially the allergies, The mother texted the father (from the doctors office) and he replied call his attorney. To me this doesn't seem like a concerned father. Seeing the child upset when she had to go back to the father. What upset me the most was finding out the child sleeps with him. Sometimes in the nude. Maybe I don't understand all the rules of the law but I thought this was also morally wrong. A concerned parent would allow the child to finish the school year. Say goodbye to her friends. It saddens me to know the child will not have contact with the sisters, aunts, uncles and the 87 year old grandfather. He didn't allow it before. Only the mother is allowed to talk to the child. I don't think now will be any different. I hope the decision the courts made would've been the same one if this was a member of their family. Someday this child will end up in therapy if allowed to remain with the father.

  3. Ok attorney Straw ... if that be a good idea ... And I am not saying it is ... but if it were ... would that be ripe prior to her suffering an embarrassing remand from the Seventh? Seems more than a tad premature here soldier. One putting on the armor should not boast liked one taking it off.

  4. The judge thinks that she is so cute to deny jurisdiction, but without jurisdiction, she loses her immunity. She did not give me any due process hearing or any discovery, like the Middlesex case provided for that lawyer. Because she has refused to protect me and she has no immunity because she rejected jurisdiction, I am now suing her in her district.

  5. Sam Bradbury was never a resident of Lafayette he lived in rural Tippecanoe County, Thats an error.

ADVERTISEMENT