Dubious ‘lawsuit lending’ – US-Modelle der Prozessfinanzierung

Nachfolgend ein aktueller Artikel von „The Journal Gazette“, der einen Einblick gibt in die Prozessfinanzierungsmechanismen in den USA, ein Grund mehr, dass in den USA das Klagen so leicht gemacht wird.

Dubious ‘lawsuit lending’: With many significant bills pending in the General Assembly, some that carry long-lasting consequences are receiving little public attention. Obscured by the budget, redistricting, education, sentencing and other key legislation is a proposal to legitimize the questionable practice of “lawsuit lending.”

In lawsuit lending, a company advances money to someone filing suit, often a personal injury claim. In exchange, it receives a large part of whatever money the plaintiff recovers through a verdict or, more often, settlement. If the plaintiff recovers nothing, no money has to be repaid. But the company lending the money recoups money by charging “fees,” which sound suspiciously like interest rates.

The Indiana Code now has no language allowing or prohibiting the practice. Opponents say the bill seemingly offers consumer protections regarding the practice but in fact would give lawsuit lending specific approval in Indiana Code.

As for protecting consumers, the bill specifically states that such advances are not “loans” – and therefore not subject to state limits on interest rates. Insurance industry opponents say fees can be as much as 15 percent a month, and some plaintiffs have had to repay 250 percent of the advance.

The companies advancing the money consider the practice an investment that carries risk rather than a loan because they receive nothing if the plaintiff receives nothing.

Such loans can, in theory, help people who suffered injuries as a result of someone else’s negligence by bringing immediate help with housing, medical bills and living expenses.

But they also give people more reason to file suit and to hold out for larger settlements than what they might otherwise accept.

“It is designed to drive up settlements,” said Marty Wood, vice president of the Insurance Institute of Indiana.

While it seems unlikely that Indiana’s conservative legislature would approve of a bill that has great potential to encourage more lawsuits, the Senate passed the proposal 36-14. Notably, Senate President Pro Tem David Long, himself a lawyer, voted against it.

The sponsor of Senate Bill 97, Sen. Randy Head, R-Logansport, frankly acknowledged to the New York Times that the bill mirrors the language sought by Oasis Legal Finance in Illinois, considered a major lawsuit lender. The Times reported that Oasis is seeking the legislation in Indiana and other states. “Most of what they proposed is contained in the bill,” he said.

Wood said the insurance institute believes that while the Indiana Code is silent on the practice, established case law has set precedents that make lawsuit lending questionable at best. Indeed, the Indiana Supreme Court has ruled that plaintiffs cannot assign possible proceeds from a personal injury lawsuit to a third party. In one case, the court ruled case law does not “allow clients to sell off their claims for pursuit by others.”

This bill flew through the Senate under the radar. House members should defeat it – particularly considering they have so many other key bills to address in what will likely be a shortened session.

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