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Hedge Funds Deepen Investment In Personal Injury Lawsuits

The New York Times (NYT) reported this week that hedge funds nationwide have invested billions into mass tort litigation because they can collect 18% or much more in profit. Personal injury litigants often find themselves unable to work due to their injuries and cannot wait for years to collect their award. The practice in New York involves a cash advance that is made to the client who in turn signs away a percentage of his/her recovery. In New York this transaction is described as an assignment, not a loan, to avoid violating state usury laws. Based on how long it takes to collect a recovery, the litigation funding company can recoup double or triple the amount advanced with an effective interest rate at usurious levels. However, the litigation funding company takes the risk that if the client's case is unsuccessful, they do not get paid back anything.

According to the NYT article: "In New York, state lawmakers are trying to crack down on finance firms that offer cash advances to litigants, introducing legislation that would cap interest rates. Critics say that the...loans can leave plaintiffs with only a small fraction of the settlement money they thought they would receive....Analysts estimate that litigation finance is at least a $10 billion industry, and they expect it to keep growing." Plaintiffs' attorneys and hedge funds argue that the litigation funding makes it possible to sue large manufacturer's (especially class actions) that have an unlimited sum of money to aggressively advance any and all  defenses with multiple motions and appeals. However, critics of litigation funding point out that the long delays in litigation increase the cost of these loans or advances, which puts pressure on plaintiff's to accept quick settlements at a reduced value.

Ronald C. Burke, Esq

Trial Attorney with 30+ Years of Experience Attorney Ronald C. Burke, Esq. has more than 30 years of experience and has focused his career on representing clients in cases involving personal injury, medical malpractice and legal malpractice. He is a seasoned trial lawyer and has won many seven-figure settlements and verdicts for his clients over the years, including many case victories listed among the largest in the history of the New York State. He has been featured in the news and is a regular lecturer for the New York County Lawyers Association, as well as having lectured before the New York State Bar Association. Ron is also an attorney with Kelner & Kelner, a New York personal injury law firm. Awards and Accolades Mr. Burke's awards and accolades are many. Among them, he has been included in New York Super Lawyers® each year since 2010, and he has received the highest-possible AV® Rating from Martindale-Hubbell®. Verdict Search, a part of the New York Law Journal, frequently recognizes his notable successes after winning some of the highest settlements and verdicts in past years. He was also featured in their list of the "Top New York Verdicts of 2011" and "Top New York Settlements of 2012." He is a member of the New York State Bar Association and is licensed to practice law in the U.S. District Court for the Southern and Eastern Districts of New York, as well as before the United States Supreme Court. When Attorney Burke is not handling legal malpractice cases, he is highly involved in the local community. He is a member of the Village of Rockville Centre Volunteer Fire Department, has served on the local school board and as Chairman of the local Zoning Board. Learn more about Attorney Burke and how he can skillfully handle your malpractice case by contacting the Law Offices of Ronald C. Burke, Esq. right away to schedule your complimentary case evaluation. Our firm is here to help! Contact a New York Legal Malpractice Attorney Our firm provides each client's case with thorough preparation and aggressive representation, ensuring that you win the best possible results for your case whether it is settled or goes to trial. As a seasoned trial lawyer, Mr. Burke can provide the strong and relentless representation you need to establish negligence in a legal malpractice case and to recover any damages you may have suffered. Our firm can recover compensation for pre-trial and trial malpractice, violations of fee arrangements, loss of income, pain and suffering, and much more. Contact us today!

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