The following was contributed by Eric K. Schuller, President, The Alliance for Responsible Consumer Legal Funding (ARC).
“Equal justice under law is not merely a caption on the facade of the Supreme Court building, it is perhaps the most inspiring ideal of our society.”
— Lewis F. Powell Jr.
Few phrases better capture the promise of the American legal system than “Equal Justice Under Law.” Carved into the stone above the entrance to the United States Supreme Court, those words symbolize the belief that every person, regardless of wealth, status, or background, stands equal before the law.
But as Justice Lewis F. Powell Jr. observed, those words must represent more than an inscription on a building. They must be an operational principle, a reality experienced by everyday people who rely on the legal system to resolve disputes and obtain justice.
In practice, however, the ideal of equal justice often collides with an uncomfortable truth. Litigation takes time. Legal claims, particularly personal injury claims, can take months or years to resolve. During that time, the injured person frequently faces mounting financial pressure. Medical bills accumulate. Income may be lost due to the injury. Rent, utilities, and everyday expenses continue regardless of the progress of a legal case.
Meanwhile, the opposing party is often backed by a large insurance company or corporate defendant with deep financial resources and the ability to delay litigation for extended periods.
This imbalance creates a fundamental tension in the civil justice system. If one side can afford to wait and the other cannot, the outcome of a case may be influenced not by the merits of the claim, but by financial pressure. Consumer legal funding emerged as a practical solution to this problem.
At its core, consumer legal funding helps preserve the promise behind Justice Powell’s words by helping injured individuals maintain financial stability while their legal claims proceed.
The Economic Reality of Litigation
Civil litigation is rarely quick. Personal injury claims often require extensive investigation, medical treatment, negotiation with insurance companies, and in some cases trial preparation.
For injured plaintiffs, this process can be financially devastating. Many individuals involved in serious accidents cannot return to work immediately. Others face large medical expenses that accumulate before a settlement or judgment is reached.
Even individuals who previously had stable financial lives may suddenly find themselves struggling to pay for basic necessities.
Insurance companies and large defendants, by contrast, face no such pressures. Insurers are structured to manage litigation risk over long periods of time. They have legal departments, litigation budgets, and the ability to delay or extend negotiations.
This difference in financial endurance can shape the dynamics of settlement negotiations.
When an injured person faces the possibility of eviction, unpaid medical bills, or an inability to provide for their family, the pressure to settle quickly increases dramatically. The settlement decision may become less about fairness and more about survival.
This is where consumer legal funding plays a crucial role.
Consumer Legal Funding: Supporting Plaintiffs During Litigation
Consumer legal funding provides monies to plaintiffs with pending legal claims, typically personal injury cases. These funds are designed to help cover everyday living expenses while a case is ongoing.
Importantly, consumer legal funding is structured as non-recourse funding. Repayment occurs only if the plaintiff successfully resolves the case through settlement or judgment. If the case is unsuccessful, the consumer does not owe repayment.
This structure reflects the reality that the funding company is accepting risk tied to the outcome of the legal claim.
The purpose of the funding is not to finance litigation strategy or influence legal decisions. Rather, it helps injured individuals pay for basic necessities such as housing, food, transportation, and medical needs while the legal process unfolds.
In this way, consumer legal funding functions as a financial stabilizer during one of the most vulnerable periods in a plaintiff’s life.
Restoring Balance in Settlement Negotiations
The civil justice system assumes that parties negotiate settlements based on the merits of the case, the strength of the evidence, and the applicable law. In reality, financial pressure can significantly influence settlement behavior.
When plaintiffs face immediate financial hardship, they may feel compelled to accept settlements that do not fully reflect the value of their claims.
Insurance companies understand this dynamic. The longer a case continues, the greater the financial strain on many injured plaintiffs.
Consumer legal funding helps address this imbalance by giving plaintiffs the ability to withstand financial pressure during the litigation process.
By helping consumers remain financially stable, consumer legal funding allows settlement decisions to be based more on the actual merits of the case rather than immediate economic desperation.
In essence, it helps ensure that the legal process functions as intended.
The Role of Consumer Legal Funding in Access to Justice
Access to justice is often discussed in terms of legal representation. Ensuring that individuals have access to attorneys is unquestionably important. Contingency fee arrangements have long helped individuals pursue claims they might otherwise be unable to afford.
However, legal representation alone does not solve the financial challenges that plaintiffs face during litigation.
Even when attorneys represent clients on contingency, plaintiffs must still manage everyday living expenses while their cases proceed. Medical treatment may prevent them from working. Insurance disputes may delay compensation.
Without financial support, many plaintiffs find themselves in impossible situations.
Consumer legal funding addresses this gap. It supports the plaintiff personally, rather than the litigation itself.
This distinction is important. The funds are not intended to create lawsuits or encourage unnecessary litigation. Instead, they allow individuals with legitimate claims to endure the legal process required to resolve those claims fairly.
This support can make the difference between a plaintiff pursuing justice and abandoning a claim prematurely due to financial hardship.
Consumer Legal Funding and the American Tradition of Risk Sharing
The structure of consumer legal funding aligns with other widely accepted financial arrangements that involve risk sharing.
For example, insurance companies accept risk every day when they issue policies. If an insured event occurs, the insurer pays the claim. If it does not, the insurer retains the premiums.
Similarly, venture capital investors accept risk when they fund startup companies. If the company succeeds, the investor benefits. If it fails, the investor absorbs the loss.
Consumer legal funding operates on a similar principle. The funding company provides monies with the understanding that repayment depends on the success of the legal claim.
This risk-based structure distinguishes consumer legal funding from traditional lending, where repayment is required regardless of outcome.
The contingent nature of repayment reflects the uncertain nature of litigation itself.
Protecting the Integrity of the Civil Justice System
Critics sometimes argue that consumer legal funding interferes with litigation or encourages lawsuits. In reality, the opposite is often true.
Consumer legal funding does not determine whether a lawsuit is filed. That decision is made by the plaintiff and their attorney based on the merits of the case.
Funding companies review cases carefully before providing funds. The evaluation process often includes reviewing case documentation, attorney involvement, and the likelihood of a successful resolution.
This evaluation process means that funding companies generally support claims that already have legal merit and professional representation.
Rather than encouraging frivolous litigation, consumer legal funding tends to operate within the existing framework of legitimate claims.
Its primary impact is helping plaintiffs remain financially stable while the legal system runs its course.
Preserving the Meaning of “Equal Justice Under Law”
Justice Powell’s words remind us that the promise of the legal system extends beyond formal procedures. Equal justice requires more than access to a courtroom. It requires that individuals have a realistic ability to pursue their claims without being forced into premature settlement by financial hardship.
In many cases, the difference between a fair settlement and an inadequate one is time.
Insurance companies can afford time. Corporations can afford time.
Injured individuals often cannot.
Consumer legal funding helps bridge this gap. By providing financial support during the litigation process, it allows plaintiffs to remain engaged in their cases and pursue outcomes that reflect the true value of their claims.
This role aligns directly with the broader principles of fairness and equality embedded in the American legal tradition.
Funding Lives, Not Litigation
Consumer Legal Funding: Funding Lives, Not Litigation.
This phrase captures the essence of the product. The purpose of consumer legal funding is not to finance lawsuits or drive litigation strategy. It is to help real people navigate the difficult period between injury and resolution.
Behind every legal claim is a person whose life has been disrupted. There are families dealing with lost income, individuals recovering from serious injuries, and households struggling to meet everyday expenses.
Consumer legal funding recognizes these realities.
It provides a practical tool that helps injured consumers maintain stability while the legal system works toward a resolution.
Conclusion
Justice Lewis F. Powell Jr. reminded us that “Equal Justice Under Law” must represent more than an inscription on a courthouse wall. It must be a living principle that guides how the legal system operates.
For many injured plaintiffs, the greatest obstacle to justice is not the law itself, but the financial pressure that arises while a case is pending.
Consumer legal funding helps address this challenge. By providing financial stability during litigation, it allows plaintiffs to remain in the process long enough for their claims to be evaluated fairly.
In doing so, it supports the very principle Justice Powell described.
Equal justice cannot exist if only those who can afford to wait are able to pursue it. Consumer legal funding helps ensure that justice is determined by the facts and the law, not by who runs out of money first.
And in that sense, it plays a meaningful role in turning one of America’s most inspiring ideals into a practical reality.
