Loans for Lawsuits Remain Largely Unregulated - NYTimes.com

Usury. It used to be a sin - before University of Chicago economists got hold of the American intelligentsia and persuaded legislators that the free market must really be free;and that any agreement reached without a loaded pistol to one's temple must be enforced.


BUT Stephen Gillers makes this point HERE at Legal Ethics Forum: desperate plaintiffs may settle low.  That gives a big profit to the defendant who takes advantage via low settlement of claims.  Another unregulated aspect of the market.  In my experience that was rare: often because as the plaintiff's lawyer we were motivated to "hold out", pressing the client not to "sell out" or because workers comp, return to work, Social Security, or the charity of family - enabled the injured person to survive while waiting for settlement.

The Times story by Gary Tramontina begins:

Larry Long, debilitated by a stroke while using the pain medicine Vioxx, was facing eviction from his Georgia home in 2008. He could not wait for the impending settlement of a class-action lawsuit against the drug’s maker, so he borrowed $9,150 from Oasis Legal Finance, pledging to repay the Illinois company from his winnings.

Carolyn and James Williams. Ms. Williams borrowed $5,000 in 2007 from USClaims while pursuing a disability suit. Her case is unresolved and her debt to USClaims stands at $18,976.

“It’s not for everyone, but it’s there when you need it,” said Harvey Hirschfeld of LawCash.

By the time Mr. Long received an initial settlement payment of $27,000, just 18 months later, he owed Oasis almost the entire sum: $23,588.

Loans for Lawsuits Remain Largely Unregulated - NYTimes.com