Prof. Richard Painter Interviewed by New York Times About Use of Consumer Legal Funders in Personal Injury Cases

Professor Richard Painter, S. Walter Richey Professor of Corporate Law, was interviewed by the New York Times about personal injury cases and the use of consumer legal funders. With many personal injury cases taking years to resolve, plaintiffs often turn to consumer legal funders to help support them. Such firms float cash advances to plaintiffs to cover expenses like rent, food and medical care while their cases go through court. The advance is similar to a loan, except that if a case fails, the plaintiff doesn’t have to pay it back. But most of the time, insurance companies settle personal injury cases, and the plaintiffs repay their advances — plus fees and interest of 35 to 45 percent a year, on average. Prof. Painter said of the practice, “You are bringing in these third parties who have no interest in the integrity of the legal profession, they just simply want to make money off the justice system.”