Protect Californians from Legal System Abuse!

What’s the Problem with Third-Party Litigation Financing?

Third-party litigation financing—also known as lawsuit lending—is a highly secretive, unchecked industry that turns our legal system into a money-making machine for exploitative lenders, who are puppet masters manipulating the court behind the scenes. These hidden deals fuel excessive lawsuits and drive up the costs for California residents and business owners. Plus, some funders have even been linked to foreign actors, inviting their influence into our courts.

The unregulated lawsuit lending industry also hurts businesses. Lawsuit lending fuels frivolous lawsuits and drives up payouts, experts say, disproportionately hurting small businesses, which operate on thin margins and can be bankrupted by one big settlement. The average household pays a $4,599 “tort tax” per household annually due to these unnecessary and abusive lawsuits. Ultimately, that’s less money for businesses to grow, and for consumers to spend. As a result, lawsuit lending erodes profit margins, as businesses must set aside money for injury funds rather than investing in growth.