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.
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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.
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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.