1. © 2013 Property Casualty Insurers Association of America 1 David Golden, PCI AICP Great Lakes Chapter E-Day May 17, 2013 Sharks Beneath Calm Seas: Lawsuit Loans and Trespassers

2. © 2013 Property Casualty Insurers Association of America 2 The Speedy Bucks Case The Speedy Bucks Case

3. © 2013 Property Casualty Insurers Association of America 3 A New Fishing Hole And a New Fishing Pole Consumer lawsuit loans Add expense without real benefit Questionable industry seeks legitimacy Litigation equivalent of payday loans Sharks want to avoid sonar detection Primary target high frequency, low value cases Auto accidents, slip-and-falls, etc.

4. © 2013 Property Casualty Insurers Association of America 4

5. www.accidentlawsuitfunding.comwww.accidentlawsuitfunding.com on 5-12-13

6. © 2013 Property Casualty Insurers Association of America www.litigationfundingusa.comwww.litigationfundingusa.com on 5-12-13 Lots of Cases!

7. © 2013 Property Casualty Insurers Association of America Now That I Have Your Attention Product Codes In Target Classes 7 19.0 Pers Auto 20.0 Comml Auto 30.0 Comb H.O./Auto 16.0 Work Comp 3.0 Farm 4.0 H.O. 5.2 CMP Liab 5.0 BOP Liab 17.0 Other Liab

8. © 2013 Property Casualty Insurers Association of America 8 Consumer Bait TV, YouTube, Web sites $ $ $ Need money? Case pending? Credit rating doesn’t matter!

9. © 2013 Property Casualty Insurers Association of America 9 The Hook Non-recourse loan Pay back only if you win! Don’t settle early!

10. © 2013 Property Casualty Insurers Association of America 10 The Line Selling bill to legislators Small consumer loans 10% - 15% of case value typical $1,500 - $2,000 typical 4% per month typical

11. © 2013 Property Casualty Insurers Association of America 11 The Tail (Tale) “We know there are bad players out there” “Our bill regulates our own industry” “Bill implements ‘best practices’” “Enable consumer to pay home/car/medical” “Even the playing field” “Resist early settlement”

12. © 2013 Property Casualty Insurers Association of America 12 The Reel (Real) Story Lenders reacting to state fines and consent decrees Regulation is tissue paper thin “Best practices” appear based on 2005 NY consent decree How far will $2,000 go over 3-year contract? Loan gives consumer less than early settlement and much less when repayed

13. © 2013 Property Casualty Insurers Association of America 13 Legitimizing Loan Sharks? Get the Net! Legitimizes a questionable industry Champerty and Maintenance Another mouth to feed Conflict of interest for attorney? Loans can drive settlement demands

14. © 2013 Property Casualty Insurers Association of America 14 Legitimizing Loan Sharks? Get the Net! Consumer loses financially Owe the entire amount if win even $1 Defendant pays more Huge lender profits – up to 150% first year!

15. © 2013 Property Casualty Insurers Association of America 15 Shark Attack! 1-Year “Fee” = 150% (NV HB 465, Interest rates as of 2-4-13)

16. © 2013 Property Casualty Insurers Association of America 16 Shark Bite! (After 2 Years - NV HB 465) $10,000 case $2,000 loan 2-Yr “Fee” = 2 X loan Leads to: $6,000 owed after 2 years LENDER

17. © 2013 Property Casualty Insurers Association of America 17 If It Smells Like Dead Fish… Another look at Speedy Bucks Consumers – and insurers – lose through increased loss costs And ultimately prices for goods and services

18. © 2013 Property Casualty Insurers Association of America 18 Fish Don’t Smell Better With Age 9/11 first responders’ class action Attorneys wanted to recoup their own loan out of the settlement fund! How long until consumer litigation lending is added to damages by a court?

19. © 2013 Property Casualty Insurers Association of America To the Statehouse! (This calls for another story) 19

20. © 2013 Property Casualty Insurers Association of America

21. Lawsuit Lending Legislation

22. © 2013 Property Casualty Insurers Association of America 22 Follow the Lawsuit Loan Money! Lenders have it and they’re willing to spend it YOU are paying the bill! We can win – with friends

23. © 2013 Property Casualty Insurers Association of America Courtesy of Las Vegas Review Journal

24. © 2013 Property Casualty Insurers Association of America

28. 28 Restatement Third, Tort American Law Institute Not statute, not case law but a trusted court reference publication Approved, on Westlaw and Lexis

29. © 2013 Property Casualty Insurers Association of America “Restating” law that doesn’t exist! Elevates trespassers to level of invitee Increases premises liability exposures Identified in “Top Ten New Tools” article for personal injury lawyers 29

30. © 2013 Property Casualty Insurers Association of America 30 Impact on Compliance Professionals Follow the money Increased loss costs for premises liability Building owners, farm & ranch, manufacturers, retailers, wholesalers, churches, entertainment properties, railroads, AND homeowners

31. © 2013 Property Casualty Insurers Association of America Now That I Have Your Attention (Again) Product Codes In Target Classes 31 3.0 Farm 4.0 H.O. 5.2 CMP Liab 5.0 BOP Liab 17.0 Other Liab 30.0 Combined H.O./Pers Auto

32. © 2013 Property Casualty Insurers Association of America 32 Are you kidding? Make it stop! Bills to Retain Restatement Second Head off court adoption of Restatement Third Easy to understand Common sense enactments

33. Trespasser Responsibility Laws to “Freeze” Land Possessor Duties to Trespassers Trespasser Responsibility Law Enacted 2011 Fla. Stat § 768.075 (1999) Similar Law Already in Effect Colo. Rev. Stat. § 13-21-115 (1986) 2012 2013 Ark. Code § 18-60- 108 (1993) KRS §§ 381.231 -.232 (1976) 2011 (ag. land) Del. Code § 25-1501 (1973) (residential or farm)

34. © 2013 Property Casualty Insurers Association of America So should I worry? Green states = good No worries! Blank states = bad Harry Potter Magic time

35. Trespasser Responsibility Laws to “Freeze” Land Possessor Duties to Trespassers Trespasser Responsibility Law Enacted 2011 Fla. Stat § 768.075 (1999) Similar Law Already in Effect Colo. Rev. Stat. § 13-21-115 (1986) 2012 2013 Ark. Code § 18-60- 108 (1993) KRS §§ 381.231 -.232 (1976) 2011 (ag. land) Del. Code § 25-1501 (1973) (residential or farm)

36. 36 Lawsuit Loans and Trespassers

37. © 2013 Property Casualty Insurers Association of America Lawsuit Loans and Trespassers Threats Lie Just Beneath the Surface 37