This weekend Crain’s New York Business published a letter to the editor from LRANY’s Manager of Government Affairs, Scott Hobson focusing on the over due reform and regulation of the litigation finance industry.
“Litigation-finance firms bet on the little guy” (Feb. 9), highlighting the litigation finance industry’s involvement with small business, serves as a timely reminder of the rapid growth of this questionable industry.
New York is at the epicenter of lawsuit lending, and the practice of lending directly to individual plaintiffs is on the rise. Troublingly, we have virtually no regulations in place to protect consumers from predatory lawsuit-lending practices.
The practice of lawsuit lending, referred to as third-party litigation financing, is illegal in the vast majority of Western nations. Lawsuit lenders seek out consumers who have filed lawsuits and offer cash advances on their claim in exchange for a percentage of whatever award they may later receive.”