Lawsuit Loan Shark bill to be heard in committee Thursday
SPRINGFIELD – As Illinois lawmakers wrestle with raising the individual income tax rate to help keep the state solvent, a piece of legislation that would expand opportunities for personal injury attorneys may be on a fast track for passage in the current lame duck session.
Known as the Lawsuit Loan Shark bill, SB3322 will be up for discussion at a House Judiciary Committee hearing at 9:30 a.m. Thursday.
The Non-Recourse Civil Litigation Funding Act, which would allow funds to be lent to litigants as their case proceeds through the court system, has been criticized as an incentive for meritless lawsuits.
Under the proposed legislation, lawsuit lenders would not be subject to state consumer loan regulations, which have gotten tougher in recent years under State Attorney General Lisa Madigan's administration. Instead, lawsuit lenders would be under the watch of the Department of Professional Regulation.
State Rep. Jay Hoffman (D-Collinsville), a 20-year veteran lawmaker who was defeated in November's general election, is one of the chief sponsors of the bill in the House. Hoffman was defeated by Dwight Kay (R-Glen Carbon) who will be sworn in on Jan. 12.
Hoffman is of counsel with the personal injury, class action firm LakinChapman of Wood River.
The Chicago Tribune recently editorialized that the bill should be "killed."
Loan term disclosure requirements written into the bill are "mere window dressing," the editorial states.
"Keep in mind, the investors gambling on the outcome of these lawsuits have no interest in justice," the editorial states. "As a practical matter, their willingness to speculate tends to increase the volume of shoot-the-moon cases with a small chance of success but a huge potential recovery. They also prolong litigation, by providing an incentive to hold out for an unreasonably high settlement because part of the proceeds already have been pledged."
According to an article in the New York Times, lawsuit loans are propelling large and prominent cases. Investment in lawsuits at any given time now exceeds $1 billion, the article stated.