How Maine Became a Pioneer for Legal Funding

colorful trees along a Maine river
Many people don’t know more about the great state of Maine than “it borders South-Eastern Canada,” and that’s quite a shame. There are plenty of interesting facts about Maine:

  • In 1820, Maine became the 23rd American State
  • Maine is home to over 6,000 ponds and lakes and 17 million acres of forest.
  • When you count tidal areas, Maine’s coastline is 3,500 miles long — that’s greater than the distance from New Jersey to California!
  • At last census, Maine’s population was 1,330,000. Imagine sending the entire population of New York City into a beautifully wooded area and asking them to chill out a little, and you’ve got Maine.
  • Maine is a pioneer of sorts for the burgeoning legal funding industry.

Ok, that last one may be less about Maine and more about legal funding, but Maine truly is playing an important role in changing the face of legal finance.

State legislatures in the United States have long been wary about legal funding, specifically about whether or not it can be considered ethical and whether its practitioners offer enough transparency to the consumer. The State of Maine is one of the few to have taken direct action to address this complaint.

The Maine State Legislature passed Statute 9-A, Article 12 to address legal funding practices and, more specifically, to set guidelines for all legal funding contracts. For example, the statute declares that all contracts must clearly indicate, on the front page of the contract, how much the consumer will owe the company at any point in time. It also has a list of mandatory disclosures that must be included in plain sight.

Maine’s Contract Statute not only promises transparency, but promises a user-friendly aspect to legal funding. This ensures that both parties know what to expect when a legal funding transaction takes place, and is intended to prevent any issue consumers may have with rate or fee transparency.

Unlike Maine, several other state legislatures have passed legislation looking to curb the industry rather than to regulate it. The amount of lawsuits waged against legal funding companies has resulted in the formation of the American Legal Finance Association (ALFA) to create guidelines, establish ethical standards, and ensure fair business practices within the industry.

ALFA is just a start when it comes to regulating legal funding. More states need to act like Maine has, and take initiative to ensure consumer transparency. Illinois and Tennessee seem to be moving in a similar direction, but so far Maine is the only state to have made the bold move to issue a statute on legal funding fairness.

The next time someone asks you for an interesting fact about Maine, you can tell them about how Maine is a legal funding pioneer!

Photo Credit: Werner Kunz

Written by Lulaine Compere

What is Legal Funding, and Why Should I Care?

legal funding
Many plaintiffs’ attorneys will be familiar with the following scenario, or something similar:

Two years of research and preparation have paid off, and your client, a 46-year-old woman who lost her hearing due to an explosion at the bottle making factory where she worked reception, will finally be receiving the workplace compensation dues that she’s entitled to, plus coverage for the time she was out of work without money to cover her medical bills.

Of course, you know that she won’t be getting her compensation immediately. There’s still processing to be done, forms to be signed, probably a bit more bargaining with her employer.

And because she won’t be getting her compensation immediately, you won’t be getting your fees immediately, either — which means that taking that new case that fell on your desk is looking less and less like a reality.

Is there an easier case out there, or is there some way you can pursue this new case before you get your fees?

Plaintiffs and attorneys recognize that litigation can be a costly and drawn-out process, draining both monetary and emotional resources. Along with built-in legal processing, the subjective nature of many cases — for example, determining emotional reparations in a personal injury or wrongful death case — can lead to many unexpected delays in the trial process.

During the 1990s, an industry was created specifically to help plaintiffs and attorneys whose livelihood was interrupted by this type of delay. The industry today is known as legal funding, litigation financing, or something in between. It’s exactly what it sounds like – funding specifically for legal issues.

Legal funding treats litigation as collateral — in other words, attorneys or plaintiffs promise over a portion of their lawsuit in exchange for usable capital. Legal funding thus allows attorneys to pursue cases they previously may not have been able to afford, and allows plaintiffs to cover expenses that they otherwise would have had to wait months or years to pay off.

Of course, legal funding isn’t the only type of funding option that plaintiffs or attorneys can use. It just happens to be one of the easiest, most convenient ways, and the only way to obtain usable capital that is specifically tailored to the needs of attorneys and their clients.

For example, there’s nothing stopping an attorney from walking into a bank and applying for a traditional loan. However, many traditional loans require physical collateral, in the form of property or capital, in exchange for funding. As most plaintiffs’ attorneys know, this can be difficult to come by, especially if you’re running a small practice or a solo operation. Many attorneys rent their offices, or share the space. In many cases, the most valuable item in an attorney’s arsenal is their caseload — which can be used as collateral in the case of legal funding.

The best part about legal funding? It comes in all shapes and sizes, just like lawsuits. Litigation can be just as diverse as the attorneys and plaintiffs involved, so legal funding evolved to fit the needs of as many plaintiffs and attorneys as possible.

Not sure if it could work for you? Check out RD Legal Funding’s website to find out if it could.

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Written by Shayna Keyles, a content marketing consultant based in Louisville, KY. You can reach her at or find her at

BP Shunned By Supreme Court; Settlement Agreement Will Not Be Appealed

colorful oil
Ever since BP agreed to settle the 2010 Horizon Deepwater Oil Spill in the United States Gulf region, the company has been doing its best to find a way out of the deal.

The Horizon Deepwater crisis battered the lower coast of the United States, which crippled the economy, eradicated acres of natural land, and damaged countless wildlife populations, all of which are still attempting to recover.

Declared ‘grossly negligent’ and guilty of ‘willful misconduct’ for its role in the April 2010 oil spill, BP still believes that it is the one that has been wronged by the legal system.

Geoff Morrell, BP’s Vice President of US Relations, has been especially vocal about the company’s viewpoint. Morrell and his attorneys have been claiming that they are victims of fraud, “that BP said was far too generous in paying damages to businesses that were not directly affected by the oil spill but said the resulting economic slump caused revenue losses.”

Luckily for plaintiffs and those who have been damaged by the oil spill and its aftermath, the Supreme Court wasn’t buying it. In fact, the justices didn’t even deign to comment on the proposed case; they simply rejected the plea for consideration.

Joseph Rice, counsel to the BP claimants, called the Supreme Court rejection “very gratifying,” as BP’s proposal was simply their attempt to “re-write the settlement agreement.”

This attempting run-through with the Supreme Court has been one of many delays in the BP Oil Spill settlement process. The settlement process has been rife with uncertainties, including how much oil was actually leaked and which entities were harmed in which way by the leak.

Every new claim has been hotly contested by BP representatives, though the company did eventually agree to a settlement. It is this agreement, rather than evidence of the case, that BP tried to bring to the attention of the Supreme Court.

RD Legal Funding has paid close attention to the BP case proceedings since it became clear that the settlement process would be so arduous.

Because the BP settlement has gone through so many phases and is yet again being contested, RD Legal Funding began offering its Post-Settlement Fee Acceleration program to attorneys and most recently, a BP Claims Cash Out Program for CPAs.

RD Legal Funding continues to offer settlement and claims acceleration to plaintiffs’ attorneys and CPAs who have worked on the BP case. Visit RD Legal Funding’s BP page to learn more about this opportunity to receive usable capital immediately, rather than waiting years for the BP settlement to payout.

Image Credit: Ben Salter

Why Legal Funding Can Help Plaintiffs and Attorneys Involved in Tobacco Litigation

the scales of justice
Tobacco cases are extremely expensive to litigate, even though the fees and awards can be enormous. As more attorneys continue to run into a wall obtaining enough money from their bank line of credit and other traditional funding methods, they must pursue alternative forms of finance to successfully pursue their cases.

With tobacco litigation, it can take years before a trial date is set due to all the depositions and procedures that can be applied. An attorney, while pursuing these cases, must still pay overhead costs, including salaries, rent, utility bills, etc. Therefore, having the proper case funding in place can have a huge impact on a case’s outcome.

A Law 360 article mentioned litigation funding possibly having an effect on the outcome of Engle Tobacco cases. Plus recent cases in tobacco litigation, where R.J. Reynolds Tobacco Co. was hit with $23 billion in punitive damages, illustrates that law firm settlement funding could benefit a firm pursuing such cases.

Legal funding has been around since the early 1990s. Every year, the industry continues to grow in prominence and size. Plaintiffs pursuing claims against “Big Tobacco” are often unable to withstand the financial consequences of holding out for the time it takes to reach a reasonable settlement or verdict. Therefore, a marriage of sorts between plaintiffs and their legal teams with legal finance companies is a natural fit.

Lawsuit funding helps alleviate monetary concerns of both the plaintiff and their legal team, thus giving them the ability to adequately pursue their claim. It allows them to avoid accepting a low ball settlement. The fear of trial and associated financial insecurity can be diminished by utilizing legal funding.

In the 1990s, tobacco cases were fought harshly by the defendants. In many instances, the plaintiffs experienced huge financial victories. The ability to say “no” or “that’s not good enough” is what litigation funding offers to plaintiffs.

There are different kinds of funding available to plaintiffs, attorneys, and businesses. Within the legal finance space, there three main categories of funding: pre-settlement, post-settlement, and case cost financing. There are more subtle niches like appeal, verdict, and judgment funding, as well as commercial litigation financing. The point, however, is that legal funding is available to both plaintiffs and attorneys at any stage in the litigation process. For tobacco cases, and any litigation for that matter, lawsuit funding is an option that may be of benefit to both the attorneys and plaintiffs.

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Written by Lulaine Compere

Litigation Funding in Nigeria

scales of justice statue
Litigation funding is far from widespread in Nigeria. Litigants, however, especially private individuals and small and medium sized enterprises without a dedicated or readily accessible budget for litigation will often have to seek funding for their objectives of realizing returns from litigation budgets and costs applied by them in aid of their real or imagined legal entitlements.

Relevant statistics are extremely limited. It is sufficient to say that access to justice is safeguarded by relatively high court fees and costs. There are issues of general conditions of administration of justice, including the length of time it takes to settle disputes as well as the quality of justice dispensed. The typical award of costs a successful plaintiff receives is lamentable and retrogressive in terms that defy reasonable explanation. The only possible justification is “that is what Nigerian courts now award.” What follows is based on responsible monitoring of Nigerian courts.

Institutional litigation, involving companies and other qualified legal persons, likely does not routinely require substantive funding arrangements involving specialized third party funders, in Nigeria or elsewhere. In Nigeria, if someone deploys third party funding arrangements, the deployment will typically be as resourceful redoubt, rather than as normal recourse. Institutional legal funding is not a feature of the Nigerian legal landscape at this time. At best, it is undifferentiated activity that is likely not commercialized in any recognizable way. I am unaware of any other legal funding firm in Nigeria except for aetasLF. This signifies at least two things, each of which underscores the materiality of private sector involvement and resourcefulness:

  1. Sustained dissemination of material Information to the potential market for it is absolute key.
  1. Regulation of formal legal funding initiatives is nonexistent (as is the case in developed systems where litigation funding is fairly rooted), and depends on ethical self-regulatory standards of an offer of funding, as is topical in developed jurisdictions.

Although there is ample normal resort to the courts and to legal options in Nigeria, enough to carry an engaging amount of legal history and to signpost areas requiring attention or reform, it would probably not be worthwhile to seek to compare the local environment with what obtains and perhaps justifies litigation funding. For one thing, the financial system is only gradually consolidating itself, as illustrated by recent and current post-nominal alignment processes in the banking, pensions, and insurance sub-sectors.

General credit facilitation via the usual sources (banks and financial institutions) is on a distinct upward drive as of this present year. Dedicated facilitation, such as for legal fees, may seriously not be so far away. Much depends on the prioritization of law in action by potential funders.

Thus there are substantial, developing country attributes which define, differentiate, and explain the local environment in Nigeria. The upside is that development (as process, and as an over-arching sine qua non) implies and necessitates an essential deepening, evolution, and maturation of legal and regulatory infrastructures, in terms not too far different from the necessity to upgrade physical infrastructures.

And there are very real incidents and marks of economies of scale, especially in a pluralistic legal system where a significant proportion of disputation (and other legal expense activity) is still to be accommodated and resolved by reference to localized custom and customary law and process, especially where there is a pronounced need for sustainability through law. Indeed, customary norms and values may explain the availability of non-institutional legal finance options, such as where a grandee would habitually (but not institutionally) financially support party/parties to (a) legal situation(s).

Yet all forms of legal expense activity deserve to be taken seriously enough to merit legal or litigation funding, more so where there is a characteristic market predilection for entrepreneurism and transaction, which trumps a litigation only perspective.

All these factors add up to the significance of an enhanced law-based culture for a developing socio-political economy, in the best interests of entrenching and sustaining valuable norms and rights. This is more so in light of a turbulent recent past (the 1980s and 1990s) wherein dictatorship had taken root, often at the expense of the rule of law and the quality of norms. The importance of judicial pronouncements in response to exercises of executive or administrative power is self-evident.

Today, at least where the subject matter is not subject to customary law, there is not necessarily always much by which to differentiate legal culture in Nigeria from what is observable in developed systems. There is however a real difference in law-in-action, so to speak; the ways and means available to address and to accommodate means of access to tangible legal status and, consequently in case of disputation, to law where there is no institutional litigation (or other legal) financing option.

There is much for the law (including the rule of law) to catch up to, in terms of the rapid pace at which the Nigerian political economy is gaining ground in a global context. It helps that, for the most part, there have always been workable laws and frameworks for most activity. The marked differentiation of prospects for litigation and other legal funding in Nigeria is to be found in pressing requirements of practical entrenchment of law as a catalyst. The better part of these requirements is to be found at the confluence of public laws and regulations on the one part, and commercial laws on the other.

aetasLF is still fledgling. It depends on privately held resources which do not include loans. It draws its third party functionality from certain minima, via:

  1. Manifest merit in a request received for funding, close enough to assured success or completion of the underlying cause.
  1. Manageability of the size of funding requirement (if the request is large, aetasLF brokers require funding).

Its activities are typically in aid of illiquid but legally well positioned individuals and SMEs with strong clear prospects in point. aetasLF does not itself take up the legal cause in any circumstances but will seek to influence the course of such causes as it agrees to provision. It provisions litigation, as well as transaction costs, plus a premium.

Photo Credit: Michael Coghlan


This guest blog post was written by Olusoji O. Elias, Counsel/CEO of aetasLF, a private legal funding initiative primarily focused on Nigeria. You can connect with him on Twitter at @aetasLF or on Facebook at

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Litigation Funding can Influence the Courtroom

gavel in front of the world
Litigation funding is a relatively new industry. It’s less than 20 years old as a whole, having first popped up in Europe and Australia in the late 1990s and only later making its way over to the United States. Nonetheless, it is possible that in its current manifestation, legal funding has been able to influence litigation trends and the behavior of potential offenders. The overall influence may be insignificant – in Australia, for example, less than one percent of litigants opt to use legal financing, and not enough is known about the industry in the UK or the US to give an accurate estimate, suggesting that the percentage is even fewer. However, assuming that litigation funding was to become more prevalent as more people become aware of its role, there is good reason to believe that it could have a noticeable, even positive, influence over litigation trends and defendant behavior.

One area in which litigation funding is likely to have a great influence, should the industry continue to develop, is the quality of cases granted court presence. Because legal finance companies are averse to high-risk cases, they perform meticulous due diligence on all applicants, both plaintiffs and plaintiffs firms. Funders prefer to take on cases with higher merit and a good chance of winning; in this way, weaker cases are filtered out. Some stronger cases will also be filtered out, of course; a case may have high merit and have a good chance of winning, but the estimated return from the case may be too small to expect any profit after repayment.

Filtering out lower-quality cases will not necessarily reduce the amount of cases that a court oversees. Indeed, litigation funders serve the purpose of allowing plaintiffs who would otherwise have no means of pursuing litigation obtain the resources to do so; or, in other instances, they allow litigants to maintain a normal quality of life while awaiting a settlement payment. However, by effectively weeding out weak cases and simultaneously providing funding only to high-quality litigants who would otherwise not have the funds to access legal services, litigation funders would improve the overall quality of cases that the court systems would receive.

Legal funding may also have a profound impact on defendant behavior, and, in the long run, may help reduce certain offensive behaviors. When a plaintiff seeks financial assistance through a litigation funder and is approved for funding, the defendant recognizes that the case is high value, because litigation funders prefer to take on low-risk, high merit cases. This reduces the bargaining power of the defendant, which could potentially lead to earlier settlements, or a trial verdict favorable to the plaintiff. Moreover, litigation funding may enable plaintiffs to bring cases to court that were previously underrepresented, thereby increasing the likelihood that certain offensive behaviors would be put to trial and condemned. With the publication of these favorable plaintiff verdicts, it is possible that others who might have performed the same offensive acts would opt otherwise. This could also reduce litigation in the long run.

Litigation funding may have an overall positive impact on courtroom practices. In the long run, litigation funding could allow a majority of high quality cases to be heard before the court, prevent time-wasting low-merit cases from being heard, and potentially curb certain offensive and disruptive behaviors. However, at this time, when the percentage of plaintiffs utilizing litigation funding is so low, it is difficult to draw any definitive conclusions. Perhaps as the industry grows, the positive effects will be seen more clearly.


“Third Party Litigation Funding in Australia and Europe”
“Litigation Funding: Charting a Legal and Ethical Course”
“Comparing Third Party Financing of Litigation and Legal Expenses Insurance”

Photo Credit: Tori Rector

Written by Shayna Keyles, a freelance blogger and social media manager based in Louisville, KY. You can follow her on Twitter at @SKLiaison or email her at

Stephen Gillers: If Litigation Funding is Champertous, The Modern Courtroom is Illegal

court room
Occasionally, outdated concepts stem meaningful progress. We’re seeing this now with solar energy as opponents say it will kill the energy sector; with same sex marriage, as opponents cite biblical phrasings; and in the courtroom, as medieval definitions of champerty and maintenance prevent individual plaintiffs from funding their cases against well-monied defendants.

Most opposition to litigation funding stems from the fact that it involves a non-lawyer playing a role in the court setting. The fear is that the inclusion of this non-lawyer figure will somehow encourage frivolous litigation, or litigation for no cause but to earn a reward. These critics argue that this could count as champerty, which is a financial agreement between an outside party and a plaintiff in which the outside party provides financial backing for the plaintiff and in return receives a portion of the case recovery. Critics may also say that third-party funding could be seen as maintenance, legally defined as a third party taking up sides in a quarrel in order to promote litigation.

Stephen Gillers of the New York University School of Law argues that champerty and maintenance do not and should not apply to third party litigation funding: he claims that if third-party financing were to be viewed as unethical and thus illegal based on the principles of champerty and maintenance, then so too should conventional courtroom practices including contingency fees, third party non-lawyers (including insurance companies, corporations, friends and relatives) covering legal fees, and bank lines of credit.

“We let law firms share court-awarded legal fees with lay controlled not-for-profit entities that either co-counsel with the firms or merely recommend them,” Gillers points out. Moreover, insurance companies are allowed to “advise” law firms as to the best actions to prevent future lawsuits and the best way to reduce premiums; law firms are permitted to take out multiple lines of credit to finance their operations. These are symbiotic arrangements that are typically accepted or overlooked by the court systems.

Unlike the abovementioned arrangements, scholars, attorneys, and clients needlessly regard litigation funding with skepticism. This may be because it is unregulated, or because it is a relatively new industry. However, regardless of the cause, many rumors have circulated about litigation funding that perpetuate the myth that it is unethical, exploitative, and secretive.

The first myth, that litigation funding is unethical and encourages frivolous litigation, is incredibly unlikely. The plaintiff who accepts financing from a funding company may not see a favorable court outcome, and in this case would not receive any compensation from the funding company. Even if the outcome is favorable, the reward may be less than the plaintiff anticipated, and in this case the plaintiff might wind up owing money to the funding company. There is no guarantee that a plaintiff will win money in litigation, and even if granted compensation, there is no guarantee that the amount will match up to what was expected.

The second myth, that litigation funding exploits vulnerable plaintiffs, relies on the assumption that the plaintiff is financially unstable. If this is the case, then the plaintiff has as much of a chance of being exploited by a legal funding company as by the defendant’s counsel in a settlement negotiation. Litigation financing offers the plaintiff more control; she can decide whom she trusts more with her finances, and who she would rather take a risk with. This ties directly into the third myth, that the consumer lacks the resources to make an informed decision about litigation funding. Typically, plaintiffs will work with their attorneys to find the best possible legal funding option. Moreover, simple online research will help plaintiffs find case studies and reviews about potential funders.

A final criticism of litigation funding is that it may reduce the likelihood of settlements. When further examined, this may not be a criticism: by accepting legal funding, a plaintiff may not need to rush into a settlement and can further litigate towards a favorable outcome. On the other hand, receiving funding may fool a plaintiff into thinking that the opinion in a case will shift in her favor, causing her to abandon a favorable settlement. In this regard, litigation funding has the potential to be a double-edged sword.

Litigation funding has the potential to become a legal staple if it were regarded similarly to other third-party entities that are so welcome in courtroom proceedings. However, at present, the practice is surrounded by too many myths and prejudices. As Giller argues, these fallacies need to be cast aside in order for litigation financing to be given a fair trial.

Photo Credit: Clyde Robinson


Written by Shayna Keyles, a freelance blogger and social media manager based in Louisville, KY. You can follow her on Twitter at @SKLiaison or email her at

Chinese Drywall Plaintiffs May See Big Payout

abandoned house
After the first complaints were filed five years ago, U.S. District Judge Eldon Fallon ruled that the almost 4,000 homeowners who built their homes with Chinese drywall will be entitled to receive compensation for the damages that ensued. Judge Fallon has ruled in favor of selected groups of plaintiffs in the past, but never before has he made a decision that would affect so many of those affected by the Chinese drywall.

Chinese drywall imported from Taishin Gypsum and other Chinese companies was used to construct and repair houses in hurricane-ravaged areas in Louisiana, Mississippi, Florida, Virginia, Texas, and Alabama beginning in the early 2000s. The drywall was found to emit a sulfurous gas that not only affected the health of residents, but also affected the construction of the homes. The drywall occasionally corroded pipes and wires. Residents had difficulty finding insurance companies that would finance the repairs, and many of the homes became uninhabitable and unsellable. Many homeowners were forced to abandon or destroy the properties, costing them hundreds of thousands of dollars.

This most recent decision, which could be worth over one billion dollars, may be a result of the Taishan Gypsum Co’s absence in court. Fallon found Taishan in contempt. While some of the plaintiffs’ attorneys are hopeful, Colleen Stephens of a group called the Victims of Chinese Drywall is a bit more skeptical. Though Judge Fallon has made his decision, the government now has to hold the Chinese companies accountable and ensure that they pay the damages that are owed. This process could take another few years.

Plaintiffs in the drywall case will be receiving compensation equal to the square footage of their properties times the current cost per square foot of repairing or replacing the defective drywall.

If you are a plaintiff or attorney involved in the litigation and have a slow-paying award or legal fee, RD Legal Funding can provide accelerated access to your funds through their Fee Acceleration program.

Photo Credit: Brian U via Compfight cc

Written by Shayna Keyles, blogger and social media marketer based in Louisville, Kentucky. When not working with RD Legal, she helps small businesses with their online profiles, hikes uncharted areas, and cooks incessantly. You can contact her at or follow her on Twitter at @SKLiaison.

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