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Illinois Business Journal

December 2012

Continued from page 1 an agreed-upon share of any recovered proceeds. If the claim is successful, either through litigation or settlement, the funder receives a portion or percentage of the recovery. But if the claim is not successful, the funder does not recoup the litigation costs, which are the principal of its loan. In essence, the scholars contend, third-party litigation funding extends contingency fees to non-lawyers. Where it gets sticky, says Travis Akin, executive director of Illinois Lawsuit Abuse Watch, is that often the interest

REFORM

rates on these loans run as high as 300 percent - similar to a payday loan scenario - and the interest accrues the entire time that the lawsuit is going on, which could be a couple of years or more. Even if the plaintiff is fortunate enough to get a settlement within 15 to 17 months, he or she is still paying an exorbitant amount of interest, Akin said. And in some cases, the plaintiff has to take the case all the way to trial because the settlement he or she was being offered wasnt enough to cover the loan.

IBJ Business News

Walmart invites shoppers to recycle holiday lights
Illinois shoppers can donate their used and/or unworkable holiday lights at Walmart stores from Nov. 17-Dec. 30. The retailer is again partnering with Stlouisgreen.com for the Holiday Light Recycling Drive. This year, stores in the Metro East are participating. Recycling bins will be located in the seasonal section of Walmart stores. For a list of participating stores, visit: www. walmartstlouis.com. Stlouisgreen.com, a nonprofit organization that promotes sustainability, is collecting the lights. They will be recycled and sent back to manufacturers to be used in new products.

Metro East Park and Rec awards $800,000-plus for trails

The Metro East Park and Recreation District recently awarded $821,346 in grant funding throughout Madison and St. Clair counties. The collective cost of the nine projects will translate into a $9.1 million investment in the region. Funds were made available through MERPDs FY13 Park and Trail Grant Matching Program created to help develop parks, greenways and trails throughout the bi-county area.

Both Akin and McKinney site numerous horror stories of situations such as the above, where a plaintiffs indebtedness due to a lawsuit lending decision made the settlement option unviable. In some situations, the plaintiff continued on to trial and ultimately lost the case. Several plantiffs attorneys weve spoken with are very concerned about lawsuit lending from the perspective that all too often they are unaware that the lender is approaching and negotiating terms with their own clients, said Akin. As it now stands, at least in Illinois, theres no legislation barring lawsuit lenders from approaching clients directly without going through their attorney. Illinois Lawsuit Abuse Watch has its eyes and ears open as the General Assembly prepares to reconvene in Springfield in January. Akin says back in late 2010, SB 3322, known then as the Lawsuit Loan Shark Bill, set out to grant lawsuit lending companies a full range of rules of operation in Illinois without fear of regulatory restraint. The bill, co-sponsored by Sen. Don Harmon (D-Oak Park) and State Rep. Jay Hoffman (D-Collinsville), passed unanimously in the Senate but was soundly defeated in the House. Akin says the fact that SB 3322 was introduced during a lame duck session gives ILAW and ATRA incentive

to stand guard during the upcoming lame duck session (Jan. 3-8) to make sure a similar bill is not reintroduced. Were concerned that there may be an effort during the January lame duck session to provide the loan industry with protections to push this legislation in Illinois, Akin said, and were going to have a big fight on our hands during the early part of 2013. Theres been more of a push lately from the lawsuit lending industry to open new markets in more states and allow the regulatory framework to make that happen. But its not good for consumers, and we would argue that its not good for our state. Illinois is already ranked 46 out of 50 states in legal fairness and weve got three Judicial Hellholes, two of them in Southwestern Illinois (Madison and St. Clair counties). You dont invest in something without the expectation that there might be more of that (consumer) behavior, and that your investment will pay off. In this case, you dont invest in lawsuits unless you expect that there will be more lawsuits. This entire business model is banking on more lawsuits in Illinois, which is the last thing we need. Oasis Legal Finance, based in Chicago and one of the largest lawsuit lenders in the U.S., did not respond to requests for an interview for this story.

Illinois Laws Roundup

Illinois Laws Taking Effect Jan. 1, 2013
Social Networking Limits (HB 3782): This measure provides that it is unlawful for an employer to request a password or other account information in order to access an employees or prospective employees social networking website. HB 3782 allows for employers to maintain lawful workplace policies regarding internet use, social networking site use and electronic mail use. This legislation allows employers to obtain information about an employee or prospective employee in the public domain. Gov. Pat Quinn has signed this legislation as Public Act 97-875. It is effective Jan. 1, 2013. Equal Pay Act - Individual Liability (SB 2847): As amended, individual liability under the Equal Pay Act occurs when the employer knowingly and willfully evades the payment of a final award or final judgment under the Act. Effective on Jan. 1, 2013, the governor signed as PA 97-903. Service Members Protections (SB3287): This measure creates the Illinois Service Member Civil Relief Act which provides certain legal protections afforded to service members (and family members where specified) are subject to stated provisions of law. It amends the Illinois Administrative Procedure Act to set forth a provision concerning stays of contested case hearings for service members. It amends the Illinois Human Rights Act to provide that a violation of specified provisions regarding legal protections for military personnel constitutes a civil rights violation under the Illinois Human Rights Act. This is now PA 97-913, with an effective date of Jan. 1, 2013. Prevailing Wage Notice (HB5212): This legislation provides that a public body or other entity shall notify contractors and subcontractors of changes in prevailing wage rates. However, the notification requirement will be met by including in the contract that the prevailing rate is established by the Department of Labor and available on the IDOL Web site shifting the responsibility yet again on the contractor and small business owner. It is effective Jan. 1, 2013 as PA 97-964. UI Administrative Changes (HB 5632): This bill has been signed into law as PA 97-791 and also goes into effect Jan. 1, 2013. The new law requires payments be made to the Department of Employment Security instead of the Director. On July 13, the state of Illinois enacted HB 5632 in response to the Federal Trade Adjustment Assistance Extension Act of 2011 (TAAEA) which included a mandate for states to institute UI integrity measures designed to restore the health of the floundering unemployment insurance system. These measures are part of a larger effort by the federal government to address the growing U.S. deficit, and are specifically designed to help prevent the improper payments which have long been a drain on the unemployment insurance system. The federal government has mandated the states to apply new, stricter rules and practices which place a greater burden on employers to respond quicker, respond better, be more on top of what their third party administrator is doing on their behalf and to be financially responsible for overpayments on unemployment claims charges whenever they hold any blame for the overpayment. External Search Firms (HB 5914): This bill, which Quinn signed into law effective Jan. 1, limits the use of external search firms by state universities. Under the law, universities may use search firms only when hiring university presidents or when there is a proven need for hiring guidance. HB 5914 also requires state universities to implement policies for conducting hiring searches. Illinois universities have until June 1, 2013 to implement search policies. Commercial Truck Handheld Cell Ban (HB 5101): The governor signed legislation to ban handheld cell phone use by commercial truck drivers and to upgrade the offense of texting while driving a commercial truck. Under HB 5101, effective Jan. 1, 2013, both offenses are serious traffic violations. Drivers receiving two serious violations within three years may lose commercial driving license privileges for two months.