A Colorado court has delivered a decision that might endanger consumer legal funding in the state. This could force victims of auto accidents, slip and fall accidents, and malpractice to accept low ball initial settlements from companies looking to meet a bottom line rather than pay a truly fair settlement. However, the supporters of legal funding have not given up.
Should Payday Lending Rules Apply To Legal Funding?
A Colorado court plans to force legal funding companies to adhere to the Colorado Uniform Consumer Credit Code (UCCC). These codes were initially applied to payday loans due to scrupulous companies charging high interest on the loans they provided. These companies took advantage of consumer circumstances to profit, but that business is nothing like consumer legal funding.
â€śThis anomalous decision imposes state government regulations designed for credit products on property rights,â€ť says the Alliance for Responsible Consumer Legal Funding (ARC).
Companies like Beacon Legal Funding provide settlement advances to help personal injury victims get the fairest settlement they can, but these advances are not loans. A settlement advance only has to be repaid if your case reaches a favorable conclusion, which puts all the risk on the legal funder and not the plaintiff who receives the advance.
ARC is helping to fight this decision in the court room. The Alliance has already helped advance proper regulation of legal funding, and the organization is also dedicated to making sure legal funding isnâ€™t misrepresented by bad courtroom decisions. Keep up-to-date on this topic by following our blog, Facebook and Twitter.