Wow: New York’s Legislature actually passed a good legal reform, reining in the dirty “legal lending” industry — but before she signs it into law, Gov. Kathy Hochul should push for an amendment to make it even better.
The bill, A00804C, limits third-party lenders who finance a lawsuit to a maximum 25% share of what the plaintiff winds up winning, a step crucial to discouraging shady schemes where “investors” recruit clients who wind up with almost nothing while the lenders cash in big.
But Hochul should ask lawmakers to add a provision requiring full disclosure of the third-party lenders’ identities, sunlight that will further protect against profiteering.
The Post has long reported on these scams; the need for reform has been obvious for years.
Among many other abuses, these schemes allow the funders, especially in class-action suits, to dictate a legal strategy that maximizes the funder’s profit and pushes defendants to settle at amounts higher than the merits justify.
And it’s all gravy for ambulance-chasing trial lawyers.
Lawsuit abuse drives up insurance and other costs all across the New York economy; along with high taxes and heavy regulation, it drives away job-creating businesses.
Signing this bill — after getting Assembly Speaker Carl Heastie and state Senate Majority Leader Andrea Stewart-Cousins to agree to improve it with disclosure rules — is a great way for Hochul to proves she’s serious about improving the state’s business climate.
And, indeed, about making life in New York more affordable for honest citizens.
This story originally appeared on NYPost
