'Lawsuit loan shark' legislation would mean more lawsuits and fewer jobs in Illinois
Lawmakers have returned to Springfield for the lame duck veto session and are rushing to ram through bills dealing with tax hikes, gambling and civil unions during this abbreviated session.
Those are the bills that are drawing the most attention and news coverage, but there is another bill that is quietly being pushed by the trial lawyers' allies – some of whom were just defeated in their re-election bids – that will lead to more lawsuits in a state that is already widely recognized as a "lawsuit magnet" and home to several "judicial hellholes."
Even worse, this legislation (SB 3322) creates a new, unregulated loan industry with virtually no oversight, virtually no controls on fees or contractual obligations and no one looking out for consumers. The legislation would open the door in Illinois to predatory "lawsuit lenders" who invest in litigation and offer onerous loans to potential plaintiffs to help them file lawsuits.
Incentivizing litigation will pave the way for higher judgments and settlements. Plaintiffs will have to pay not only their attorneys and costs but also the lawsuit lender as well. Because of the need to pay off the lawsuit lender, plaintiffs will be less likely to accept a fair settlement offer because they need to clear enough to pay off the lawsuit loan shark. The need to pay off a third party will ultimately lead to dramatically inflated settlements and payouts.
Does this state really need more loan sharks and more lawsuits? What the state needs is more jobs, and the only jobs created by this bill are jobs for lawsuit loan sharks and personal injury lawyers, hardly the kind of economic boost we need to dig ourselves out of the $13 billion state budget hole.
Adding financial incentives for lawsuits will lead to only one thing – more lawsuits – and yet Illinois is already ranked as one of the most litigious, plaintiff-friendly states in the country.
According to a recent report from the global research firm Harris Interactive, Illinois is ranked 45th out of 50 states for legal fairness, and a report in "Directorship" magazine ranked Illinois' legal climate dead last.
The "lawsuit loan shark bill" will make Illinois even friendlier to frivolous lawsuits and at the same time, it will make our state less attractive to companies either looking to move here or expand their existing operations. Making our state even more of a destination for lawsuits will make it extremely difficult to attract jobs and opportunities to Illinois.
One of the primary proponents of this legislation is State Representative Jay Hoffman (D-Collinsville), who is of counsel with one of the biggest personal injury lawyer firms in Illinois. Rep. Hoffman was defeated on November 2nd and appears to be trying to give his personal injury lawyer friends a huge gift on his way out the door.
Lawmakers should put the brakes on this legislation and perhaps revisit the issue during the new legislative session set to begin in January. Rushing to pass something in the pressure-packed veto session is ill-advised and unnecessary and could cripple new efforts to stimulate job growth in Illinois.
Illinois is already known as the "Land of Lawsuits." Do we now want to be known as the land of "lawsuit loan sharks?"