Too Poor To Sue? Here's Help, But Maybe Not For Long
From Crain's Chicago Business
Oasis Legal Finance LLC makes money legally, though less than honorably, at least according to corporate insurers. The Northbrook company provides what is known as lawsuit funding and says it accounts for as many as four of 10 loans made to personal injury plaintiffs.
Despite rates that would be usury in other instances, however, business doesn't look as promising as it has been. This month a new Tennessee law forced Oasis out of the state, just one of many considering restricting if not halting a practice that insurers say spurs more lawsuits, larger settlements and ultimately higher premiums for policyholders.
“The insurance consumers, at the end of the day, are bankrolling this industry,” says Joe Thesing, vice president of state affairs in Indianapolis at the National Association of Mutual Insurance Companies.
Although the Tennessee act allows annual interest charges of 46 percent, Oasis says other provisions, including a prohibition against assigning contracts, will kill funding from banks and junior capital providers. “It's like taking the coffee beans away from Starbucks,” Oasis CEO Ralph Shayne says.
Since 2013, bills have been introduced in Illinois, Indiana and 15 other states to ban or restrain lawsuit lending, or to enable it, according to trade groups representing one side or another. None besides Tennessee's passed.
Read more in our daily News Update...
From Crain's Chicago Business
Oasis Legal Finance LLC makes money legally, though less than honorably, at least according to corporate insurers. The Northbrook company provides what is known as lawsuit funding and says it accounts for as many as four of 10 loans made to personal injury plaintiffs.
Despite rates that would be usury in other instances, however, business doesn't look as promising as it has been. This month a new Tennessee law forced Oasis out of the state, just one of many considering restricting if not halting a practice that insurers say spurs more lawsuits, larger settlements and ultimately higher premiums for policyholders.
“The insurance consumers, at the end of the day, are bankrolling this industry,” says Joe Thesing, vice president of state affairs in Indianapolis at the National Association of Mutual Insurance Companies.
Although the Tennessee act allows annual interest charges of 46 percent, Oasis says other provisions, including a prohibition against assigning contracts, will kill funding from banks and junior capital providers. “It's like taking the coffee beans away from Starbucks,” Oasis CEO Ralph Shayne says.
Since 2013, bills have been introduced in Illinois, Indiana and 15 other states to ban or restrain lawsuit lending, or to enable it, according to trade groups representing one side or another. None besides Tennessee's passed.
Read more in our daily News Update...