WMC Director of Tax, Transportation & Legal Affairs Evan Umpir, testified in support of Assembly Bill 858, a bill that would establish common-sense consumer protections for lawsuit lending. “Lawsuit lending” or “lawsuit financing” is not regulated like other consumer transactions and lending. This is concerning because unregulated lawsuit lending can leave plaintiffs with little or no money left from a settlement or judgment.
Additionally, these lawsuits can prolong litigation and waste court resources if a plaintiff feels pressure to pursue a litigation strategy based on concerns of loan repayment, costing defendants money defending the claim and the court precious time. AB 858 institutes common-sense consumer protections that allow lawsuit-lending, but cap interest rates for loans at 18% per year and ensure that consumers are not required to pay back the loan if they do not win the case. This bill also ensures that plaintiffs do not need to repay a lawsuit loan beyond the available proceeds from the settlement or judgement.
Read WMC’s testimony on SB 842.