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IL Governor Signs Consumer Legal Funding Law

May 31, 2022

IL Governor Signs Consumer Legal Funding Law

The following piece was contributed by Eric Schuller, President of the Alliance for Responsible Consumer Legal Funding (ARC). Illinois becomes the latest State to bring proper regulation to the Consumer Legal Funding industry with the signing of SB 1099. The Alliance for Responsible Consumer Legal Funding, a major Trade Association for the companies that offer Consumer Legal Funding, were proud to work with Illinois Senator Jackie Collins and Representative Curtis Tarver in the drafting and passage of this bill.  Additional sponsorship was offered by Senators John Collins, Mike Simmons, Mattie Hunter, and Ann Gillespie along with Representatives Elizabeth Hernandez and Jay Hoffman. The legislation was also supported by the Woodstock Institute, the leading consumer advocate organization in Illinois. SB 1099 brings some of the strongest consumer protections in the country involving Consumer Legal Funding. It prohibits companies from:
    • Paying or offering a commission or referral fee
    • Accept a commission or referral fee
    • Make false or misleading statements in advertising
    • Make any decision in the consumers legal claim
    • Knowingly pay or offer to pay court costs, filing fees or attorney fees
    • Provide legal advice to the consumer regarding the funding or underlying legal claim
    • Attorneys who represent the consumer are prohibited from having a financial interest in the funding company
It also mandates that companies that will offer this product must be registered with the Illinois Department of Financial and Professional Regulations and pass a background check and post a surety bond. Illinois will be the first state that will require companies that offer Consumer Legal Funding to Illinois residents that they must make them aware of Financial Counseling programs. “I would personally like to thank Senator Collins and Representative Tarver for their dedicated efforts in getting this important piece of legislation passed.” stated Eric Schuller, President of Alliance for Responsible Consumer Legal Funding, They were not swayed by the opponents of the legislation and ensured that this product can be offered to the consumers of Illinois in a fair and responsible manner.” Illinois joins Maine, Ohio, Nebraska, Oklahoma, Indiana, Vermont, Tennessee, Nevada and Utah in bringing proper regulation to the industry. Brian Garelli the President of Preferred Capital Funding said: “I would like to thank Governor Pritzker and the Illinois legislature for making SB 1099 law in Illinois. The bill added over a dozen consumer protections.  It also balances the playing field between multibillion dollar insurance companies and injury victims that might not otherwise be able to wait for a fair settlement while their case winds its way through the court system.” The law goes into effect immediately.

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Legal-Bay Extends Non-Recourse Funding to AFFF PFAS Firefighting Foam Cancer Plaintiffs

By John Freund |

Consumer legal funder Legal-Bay has announced that it is providing pre-settlement funding to plaintiffs in the AFFF firefighting foam mass tort, as nationwide litigation tied to PFAS-related cancers and other diseases continues to advance toward bellwether trials.

According to PR Newswire, the AFFF multidistrict litigation has become one of the largest toxic tort proceedings in the United States, with thousands of personal injury claims consolidated in federal court alongside the municipal water contamination cases that have already produced multi-billion-dollar settlements with several chemical manufacturers.

Legal-Bay's funding is non-recourse, meaning plaintiffs repay advances only on a recovery, with no obligation if a case is unsuccessful. Eligible applicants include firefighters, military veterans, airport workers, industrial workers, and civilians diagnosed with cancers of the kidney, testicle, pancreas, prostate, liver, bladder, or thyroid, as well as thyroid disease, ulcerative colitis, and immune system disorders linked to PFAS exposure. The funder said applications are typically approved within 24 to 48 hours of receipt of case documentation.

"Toxic exposure litigation involving PFAS and firefighting foam can take years to fully resolve," said Legal-Bay chief executive Chris Janish. The announcement follows a similar Legal-Bay outreach to Depo-Provera plaintiffs earlier this week, reflecting a pattern of consumer funders positioning around large mass tort dockets ahead of bellwether outcomes that may define settlement values.

Consumer

Legal-Bay Extends Non-Recourse Funding to Depo-Provera Mass Tort Plaintiffs

By John Freund |

Consumer legal funder Legal-Bay has announced that it is actively providing pre-settlement funding to plaintiffs in the Depo-Provera product liability litigation, offering non-recourse advances as the coordinated proceedings move through early discovery.

According to PR Newswire, lawsuits involving Pfizer's injectable contraceptive Depo-Provera are in mid-stage litigation across U.S. courts, with plaintiffs alleging the product caused serious health complications including decreased bone density and meningioma brain tumors, as well as inadequate warnings about long-term risks. Cases are being organized through coordinated proceedings, with bellwether trials expected to shape future settlement values; no global settlement has been finalized.

Legal-Bay's funding is non-recourse, meaning plaintiffs repay advances only if they prevail or settle, with no repayment obligation absent a recovery. The funder said applications from lawyers and plaintiffs in active Depo-Provera matters are typically approved within 24 to 48 hours of receiving case documentation. "We are very active in this litigation and are a preferred funder to many of the top Depo Provera firms in the country," said Legal-Bay chief executive Chris Janish.

The announcement illustrates the continued role of consumer legal funding in large mass tort dockets, where plaintiffs often face extended timelines before resolution. It also reflects funders' practice of positioning early in emerging product liability litigation as bellwether outcomes begin to define potential settlement frameworks.

Consumer

Counsel Financial Closes $30 Million+ Succession Financing for Plaintiff Firm

By John Freund |

Counsel Financial has originated a financing transaction worth more than $30 million to support an internal succession plan at a plaintiff-side law firm. The capital is structured to enable the orderly transfer of ownership from the firm's existing partners to the next generation, with the deal collateralized by a portfolio of single-event personal injury matters.

According to Newswire, the transaction was funded by a large alternative asset manager and represents a specialized application of litigation finance to law firm continuity planning. Rather than financing a single case or open caseload, the deal monetizes the firm's existing inventory of personal injury claims to generate liquidity for a planned ownership transition.

Succession financing has emerged as a quieter but increasingly active corner of the litigation finance market. Plaintiff firms with mature partnerships and substantial pending dockets often face significant friction when senior partners look to retire or reduce their stakes — particularly where state ethics rules limit the use of outside capital. Specialty lenders such as Counsel Financial have responded by structuring transactions that draw on case portfolios as collateral, allowing firms to fund partner buyouts without ceding control to non-lawyer investors.

For plaintiff-side practices grappling with generational turnover, deals of this scale offer a model for preserving firm independence while accessing institutional capital. The transaction also underscores the deepening role of alternative asset managers in funding the operational and ownership structures of plaintiff law firms, well beyond traditional case-by-case funding.