ARC’s Eric Schuller: The Consumer’s Attorney Is an Essential Safeguard in Consumer Legal Funding
Debates over Consumer Legal Funding tend to focus on the financial relationship between the consumer and the funding company, but one key participant is often overlooked: the consumer's own attorney.
As reported by The National Law Review, Eric K. Schuller of the Alliance for Responsible Consumer Legal Funding (ARC) argues that attorney involvement is one of the strongest consumer protections in the marketplace. Because the product is tied to a pending claim, the consumer is always represented by counsel before a funder ever sees the file. Maine and Nebraska define an eligible consumer as one represented by an attorney, Missouri permits contracts only where the consumer is represented, and Kansas limits the product to plaintiffs in a pending civil action.
Of the thirteen state laws reviewed, nine require the consumer's attorney to sign an acknowledgment in the funding contract, and two more require the consumer to certify that counsel was involved. In most of those states, a contract without the acknowledgment is void. The attorney typically confirms that disclosures were reviewed with the client, that the attorney is retained on contingency, that proceeds will flow through a trust account or settlement fund, and that the attorney has received no referral fee or other consideration from the funder.
Schuller contrasts this with payday loans, credit cards, auto title loans and even mortgages, none of which require the borrower's lawyer to attest to anything. He also highlights disclosure rules, including cumulative-amount disclosures in six states and ten-business-day rescission windows in Kansas, New York, Ohio, Missouri and Utah.
As more states weigh legislation, Schuller presents the attestation model as a proven blueprint that addresses the transaction's real structure while preserving the consumer's right to decide.









