During his 13 years serving as Georgia’s Attorney General, Thurbert Baker had a front row seat as the litigation lending industry grew across the nation.
He saw court cases that should have been settled instead drag on in a quest for bigger payouts. He saw businesses face inflated legal costs. He saw greater amounts of frivolous lawsuits. He saw consumers being gouged with huge interest rates. He saw taxpayers on the receiving end of rising costs due to an increasingly-burdened court system.
“I got a chance to see lawsuit lending problems up front and I was disturbed,” Baker said.
Today, litigation lenders are in operation across the nation, including Missouri. While people are often drawn to litigation lending services as a way to fund potentially-expensive lawsuits, the services end up creating massive new costs for everyone involved in the legal process.
“All Missourians should be concerned about litigation funding because, at the end of the day, it’s going to impact their bottom line, it’s going to impact the cost of courts,” Baker said.
Working alongside the Missouri Chamber of Commerce and Industry, Baker visited the Missouri Capitol on Jan. 21 to help educate Missouri lawmakers about the need to pass legislation addressing litigation lending.
“What we have to see on the legislative front is, first of all, legislators who understand the issue,” Baker said. “This is a billion dollar industry out there that is costing the court system, costing businesses, costing consumers more than they should have to pay in these type of cases.”
Rep. Elijah Haahr, a Republican from Springfield, has sponsored legislation to address the legal lending problem in Missouri. Rep. Haahr’s House Bill 512 would limit litigation lending interest rates at 21 percent annually. Baker said that currently, consumers can pay anywhere from 150 to 300 percent in interest.
Rep. Haahr’s proposal would also forbid attorneys from holding a financial stake in the litigation lender who is funding their clients’ cases. In addition, litigation lenders would have to register with the Missouri Department of Insurance, Financial Institutions and Professional Registration.
Baker, a Democrat, said he believes that state efforts to address litigation lending can be bi-partisan efforts.
“It’s a great opportunity not only to create a good system, but to create a fair system,” Baker said.
Baker encouraged business leaders and concerned individuals to ask their lawmakers to address the problem of litigation lending in Missouri. He said Missourians should also look to the Missouri Chamber and their local chambers for leadership as the legislative process unfolds in Jefferson City.
“Be supportive of your state and local chambers,” Baker said. “The chambers have been out front working on this issue because it is one that tremendously impacts businesses around the country.”
The Missouri Chamber is advocating for the passage of litigation lending reforms during the 2015 Legislative Session.
For more information, contact Jay Atkins, Missouri Chamber general counsel and director of legislative affairs, at email@example.com, or by phone at 573-634-3511.