Sitting in the middle of the country far from the coasts, Illinois is not known for sharks.
But soon, if personal injury lawyers and allies get their way in the Capitol, Illinois could become known for “lawsuit loan sharks.”
Legislation (House Bill 2301) has been introduced which creates a new, unregulated lawsuit 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 with sky-high interest rates to potential plaintiffs to help them file lawsuits. Even when the plaintiffs win their cases, they are often left with no money thanks to the egregiously high interest rates paid to the lawsuit “loan sharks” and the huge cut taken by the personal injury lawyers.
Even worse, this practice of offering money up front to people willing to file lawsuits creates an obvious incentive to file lawsuits. That will lead to more lawsuits in a state that is already widely recognized as a "lawsuit magnet" and home to several "judicial hellholes."
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 multi-billion dollar 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 46th out of 50 states for legal fairness.
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. Further solidifying our state as even more of a destination for lawsuits will make it extremely difficult to attract jobs and opportunities to Illinois.
If lawmakers want to do something about the lawsuit loan industry, they should pass legislation (HB 2300) that would apply the same rules of traditional loans to lawsuit loans and provide more – not less – oversight to the industry.
The common sense reforms contained in HB 2300 would provide the right framework and oversight for lawsuit loans. If we are going to have lawsuit loans in Illinois, let’s make sure the industry is appropriately regulated.
Illinois is already known as the "Land of Lawsuits." Do we now want to be known as the “Land of Lawsuit Loan Sharks?"