A new commentary pushes back on the tendency to lump consumer legal funding together with commercial third-party litigation financing, arguing the two are fundamentally different products that warrant different policy treatment.

Writing in The National Law Review, Eric K. Schuller, president of the Alliance for Responsible Consumer Legal Funding (ARC), contends that consumer legal funding (CLF) is a modest, non-recourse product that helps injured individuals cover household costs — rent, groceries, utilities, childcare — while their claims proceed, rather than an investment in the litigation itself. Typical transactions run $3,000 to $5,000, carry no repayment obligation if the case fails, and give the funder no control over legal strategy.

Commercial litigation finance, by contrast, involves institutional investors deploying millions into business disputes. On that basis, Schuller argues CLF cannot be blamed for a so-called "tort tax," since it neither causes accidents nor finances litigation expenses. "If Consumer Legal Funding disappeared tomorrow, accidents would still happen," he writes.

He points to state high-court decisions — Maslowski v. Prospect Funding Partners in Minnesota and Ruth v. Cherokee Funding in Georgia — and to states including Kansas, New York, California, and Georgia that regulate CLF separately, alongside a U.S. Government Accountability Office report describing commercial funding as institutional and corporate in nature. ARC says it supports responsible CLF regulation — licensing, plain-language contracts, cancellation rights, and prohibitions on controlling litigation — while opposing measures that treat CLF as commercial litigation finance.

In an Independence Day editorial, the Alliance for Responsible Consumer Legal Funding (ARC) argues that meaningful freedom includes the ability of injured Americans to pursue their legal claims without financial desperation forcing them into unfair settlements. The piece positions consumer legal funding as a practical tool for keeping the outcome of a case tied to its facts rather than to a plaintiff's bank balance.

Writing in the National Law Review, ARC president Eric Schuller contends that "justice delayed can quickly become justice denied when mounting bills force individuals into decisions they otherwise would never make." Defendants, he argues, understand this dynamic and can use the length of the civil justice process to pressure vulnerable plaintiffs into accepting less than their claims are worth.

Schuller distinguishes consumer legal funding from commercial litigation finance and traditional lending. These are typically small, non-recourse advances — often $3,000 to $5,000 — used for everyday necessities such as rent, groceries, and medical bills while a claim proceeds. Because the funding is non-recourse, a consumer who loses the underlying case owes nothing. ARC's guiding principle, he writes, is "Funding Lives, Not Litigation."

The editorial also makes the case for responsible oversight, endorsing disclosure requirements, attorney acknowledgment, and prohibitions on funders influencing litigation strategy — safeguards intended to protect consumers while preserving their access to the tool.