Blog

By: Rachel McCarthy

The consumer litigation funding industry was built around a legitimate need: helping plaintiffs stay financially afloat while waiting for their cases to resolve. In theory, that support can level the playing field. In practice, however, many traditional funding companies have created a system that often prioritizes volume and profit over transparency and fairness. 

At The Milestone Foundation, we believe plaintiffs deserve clarity, fairness, and ethical treatment throughout the funding process. Here are three major issues we see with the traditional consumer litigation funding model. 

1. Different Plaintiffs Receive Different Rates from the Same Funding Company

One of the least discussed problems in the industry is the way pricing can vary depending on the law firm involved and the funding company’s policies. 

Many traditional litigation funding companies offer preferential interest rates or terms to firms that send them a high volume of cases or maintain long-standing business relationships. A plaintiff represented by a “preferred” law firm may receive significantly better terms than another plaintiff with a nearly identical case simply because their attorney does not generate as much business for the funding company, or they might be a lesser-known attorney.  

That creates a troubling imbalance. 

The cost of funding should be determined by objective factors tied to the case itself — not by backroom business relationships or referral volume. Plaintiffs are the ones ultimately repaying the funding, yet they often have no visibility into whether they are receiving competitive or equitable terms. 

In any industry that serves vulnerable consumers, consistency and fairness matter. Litigation funding should be no exception. 

2. Ambiguous Fees, Unnecessary Charges, Compounding costs

Another major issue is the lack of transparency surrounding fees and compounding costs. 

Many plaintiffs enter into funding agreements believing they understand the terms, only to discover additional servicing fees, processing fees, administrative charges, or recurring “case maintenance” fees buried in the contract. These costs can accumulate quickly over time and dramatically increase the repayment amount. 

Modern litigation funding operations are overwhelmingly digital. Documents are transmitted electronically. Status updates are often automated. Payment systems are streamlined. The operational cost of maintaining a file today is dramatically lower than it was a decade ago. 

So why are plaintiffs still being charged recurring servicing fees every six months? 

For many consumers, these fees feel less like legitimate operational necessities and more like mechanisms designed to maximize returns. This is on top of already egregious interest rates that compound monthly, quarterly, or bi-annually, and usually not in clear terms.  

Plaintiffs deserve straightforward pricing that clearly explains what they are paying for and why. Transparency should not be optional when someone is already navigating the financial and emotional stress of litigation. 

3. Aggressive Marketing to Plaintiffs Encourages Dependency Instead of Restraint

Litigation funding can serve an important purpose in the right circumstances. But it should be treated as a last resort — not a product aggressively pushed onto vulnerable individuals. 

Unfortunately, many traditional funding companies market directly to plaintiffs with relentless persistence. Advertisements, targeted outreach, and repeated solicitations often frame funding as an easy solution rather than a serious financial decision with long-term consequences. 

Some companies go even further, encouraging potential plaintiffs to view litigation funding as part of the normal litigation process from the very beginning. 

That approach is deeply concerning. 

Most plaintiffs are already dealing with financial pressure, medical treatment, uncertainty, and stress. Presenting funding as quick and effortless can incentivize borrowing before it is truly necessary. In some cases, plaintiffs may take advances they could have avoided entirely with better guidance or financial planning. 

Responsible funding providers should educate plaintiffs, not pressure them. They should encourage restraint, transparency, and informed decision-making — even when that means a consumer chooses not to take funding at all. 

A Better Standard for Litigation Funding 

Consumer litigation funding is not inherently harmful. When structured ethically, it can provide meaningful support to plaintiffs who genuinely need temporary financial relief. 

But the industry must evolve. 

Fair and consistent pricing, transparent fee structures, and responsible consumer practices should be the baseline — not the exception. 

Plaintiffs deserve a funding process built around their interests, not one driven primarily by referral relationships, hidden fees, or aggressive marketing tactics. 

 

By Julia Saunders & Rachel McCarthy

As plaintiff litigation funding becomes more widely used, attorneys are increasingly searching for how to evaluate, compare, and responsibly recommend funding options for their clients.

But the most valuable searches aren’t basic definitions. They are deeper due diligence questions. Questions like: Which litigation funding companies are trustworthy? What are the risks of lawsuit funding? When should I recommend pre-settlement funding to a client?

The answers to these questions can directly impact your client’s financial outcome and your case strategy. Join our Partners for Justice membership program to access transparent, ethical funding options for your clients.

At The Milestone Foundation, we believe pre-settlement funding should be transparent, ethical, and aligned with access to justice. Below are six essential questions attorneys should be asking when evaluating plaintiff litigation funding providers.

How Do I Know if a Litigation Funding Company Is Trustworthy?

A trustworthy litigation funding company provides clear, upfront disclosure of all fees and repayment terms, uses simple interest rather than compounding, and maintains open communication with both attorney and client. Look for transparent contracts that are easy to explain to your client.

Attorneys frequently search “how to choose a litigation funding company” or “best pre-settlement funding companies for attorneys.” The answer starts with transparency.

A trustworthy plaintiff funding company should provide:

• Clear, upfront disclosure of all fees and repayment terms
• Simple, easy to understand contracts with no hidden language
• Straightforward explanations of total repayment scenarios
• Open communication with both attorney and client

If the terms are difficult to explain, they are likely difficult for your client to understand, and that is a risk. Many plaintiff funding companies intentionally use confusing language so plaintiffs do not fully understand the harm that they may be signing up for. Attorneys have a fiduciary duty to their clients. Recommending a funder with opaque terms can expose both the client and the law practice to unnecessary risk and potential malpractice exposure. The safest approach is to evaluate each funding agreement as if you would have to defend its terms in front of a judge or ethics board.

The Milestone Foundation prioritizes full transparency at every step, ensuring attorneys can confidently review and explain funding terms without concern. Explore transparent, ethical funding options through our attorney membership program.

What Are the Biggest Red Flags in Pre-Settlement Funding Agreements?

The biggest red flags include compounding interest structures that grow rapidly over time, excessive or unclear fees, no clear cap on total repayment, and contracts that obscure the true cost of funding. If the terms are difficult to explain, that is a risk.

Search terms like “lawsuit funding risks” and “predatory litigation funding terms” are increasingly common among attorneys, and for good reason. The for-profit funding industry has grown rapidly, and with that growth has come a wide range of contract practices.

Key red flags include:

• Compounding interest structures that grow rapidly over time
• Excessive or unclear fees that inflate repayment amounts
• No clear cap on what the plaintiff may ultimately owe
• Contracts that obscure the true cost of funding

These structures can significantly reduce a plaintiff’s net recovery. For example, a $5,000 advance at 5% monthly compounding can grow to over $8,000 in just 12 months. Even a modest-looking monthly rate can produce an annual percentage rate exceeding 60%, a burden that few plaintiffs anticipate when they sign the agreement. By contrast, the same $5,000 advance at The Milestone Foundation’s 15% simple annual rate would add just $750 in interest over 12 months for a total of $5,750. This difference matters enormously for plaintiffs whose cases take one, two, or even three years to resolve, and it is exactly the kind of comparison that attorneys should be making when evaluating funding partners for their clients.

The Milestone Foundation eliminates these risks by offering straightforward terms and simple, non-compounding interest rates designed to protect plaintiff and attorney outcomes. We cap total repayment at 2x the advance amount, giving plaintiffs and their attorneys certainty about the maximum obligation from day one.

Will Pre-Settlement Funding Affect My Case Strategy or Settlement Timeline?

Reputable litigation funding companies have zero control over case strategy, never influence or pressure settlement decisions, and respect the attorney’s role as the sole legal advisor. Funding should never interfere with your professional judgment.

One of the most common concerns attorneys research is whether litigation funding interferes with legal decision-making or creates pressure to settle. The answer depends entirely on the funder’s business model and contract structure.

A reputable pre-settlement funding company should:

• Have zero control over litigation strategy
• Never influence or pressure settlement decisions
• Respect the attorney’s role as sole legal advisor

Funding should relieve pressure, not create it. Because The Milestone Foundation’s funding is non-recourse, the plaintiff owes nothing if the case is lost. This means the funding company has no incentive to push for a premature settlement. The risk stays with the funder, not the client or the attorney. Ethical funding can actually strengthen the attorney-client relationship by removing financial desperation from the settlement equation entirely.

The Milestone Foundation operates with a strict non-interference model, ensuring attorneys retain full control while clients gain financial stability.

When Should I Recommend Pre-Settlement Funding to My Client?

Pre-settlement funding is worth recommending when a client faces genuine financial hardship such as difficulty paying rent or mortgage, lack of transportation, or pressure to accept an unfair settlement due to economic need. It helps level the playing field.

Attorneys often wonder exactly when and whether pre-settlement funding is appropriate for their clients. They do not want to approve funding if it will end up hurting their clients in the long run due to high interest rates or hidden fees. But in many situations, pre-settlement funding is a necessary and beneficial option for a plaintiff facing genuine need. The key is finding a funding partner whose terms are fair enough that the benefit of financial relief today clearly outweighs the cost of repayment from the settlement proceeds.

Pre-settlement funding should be considered when a client is facing real financial hardship, such as:

• Difficulty paying rent or mortgage and facing eviction or foreclosure
• Medical bills piling up from the injury at the center of the case
• Lack of transportation to attend court dates, medical appointments, or depositions
• Inability to cover groceries and basic living expenses for themselves or their family
• Mounting utility bills or debt that threatens the household’s financial stability
• Pressure from creditors that could force an early, unfavorable settlement decision

In these situations, funding can help level the playing field. It allows clients to pursue fair case outcomes without financial desperation driving their decisions. When a plaintiff can afford to wait for a just settlement rather than accepting whatever settlement offer comes first, the entire case benefits. The attorney can focus on maximizing the case value rather than managing the client’s financial crisis.

Learn how fair and transparent pre-settlement funding supports better outcomes for both attorneys and their clients. The Milestone Foundation exists to support clients in exactly these scenarios, providing relief that protects both the client and the case.

How Can I Tell if a Lawsuit Funding Company Will Take Advantage of My Client?

Watch for companies that use vague or overly complex contracts, high-cost structures that are not clearly disclosed, compounding interest rates disguised as simple rates, and pressure tactics that bypass the attorney. The best protection is a transparent, nonprofit funding partner.

Queries like “is this lawsuit funding company legit” or “how to avoid predatory pre-settlement funding” highlight a major concern for attorneys evaluating funding partners.

Warning signs include:

• Vague or overly complex contracts that bury key terms in fine print
• High-cost structures that are not clearly disclosed upfront to the attorney or client
• Lack of attorney involvement or transparency about how the company works with counsel
• Difficulty getting clear answers to simple questions about interest, fees, and repayment terms
• Emphasis on how quickly funds will be released rather than the fairness of the terms
• Aggressive marketing directly to plaintiffs without requiring attorney participation

A simple rule: if you cannot quickly and clearly explain the terms to your client, that is a red flag. The for-profit funding model relies on complexity and opacity. The less the plaintiff understands about compounding rates and hidden fees, the more profitable the arrangement becomes for the funder. As an attorney, your ability to evaluate these terms is your client’s first and best line of defense against predatory lending practices. When reviewing a funding agreement, ask yourself whether you could explain every single term to your client in plain language in under five minutes. If the answer is no, that funding arrangement deserves much closer scrutiny.

The Milestone Foundation takes a different approach, offering clear agreements, transparent pricing, and direct collaboration with attorneys to ensure clients are fully protected at every stage of the process.

Are There Alternatives to Traditional Litigation Funding Companies?

Yes. The Milestone Foundation is the country’s only nonprofit plaintiff funding company, offering fair, transparent funding at 15% simple annual interest with no hidden fees and a 2x cap on total repayment. Nonprofit and marketplace alternatives provide ethical options beyond traditional for-profit funders.

Attorneys frequently search for “low-cost pre-settlement funding companies” hoping to find a provider that will not exploit their clients. Unfortunately, many traditional funders operate on essentially the same model. They use compounding interest, hidden fees, and opaque contracts that grow the repayment obligation far beyond what the plaintiff originally expected or agreed to.

There are two alternatives that are not driven by profit and are designed to offer a better experience for plaintiffs and their attorneys:

• The Milestone Foundation is the country’s only non-profit plaintiff funding company. It was built to provide a fair, transparent alternative to traditional high-cost funding models. With pre-settlement funding at 15% simple annual interest and post-settlement funding at 10% simple interest, plus a guaranteed 2x cap on total repayment, the numbers are predictable and fair from day one. Our nonprofit model means every dollar above operating costs goes back into expanding access to justice, not to shareholders or executive compensation.
• ClaimAngel is a marketplace platform that brings together traditional funding companies to offer a standardized rate. While still operating within the for-profit ecosystem, the marketplace model can increase price transparency for plaintiffs who have the time and knowledge to compare options.

For attorneys who want the most cost-effective and transparent option for their clients, The Milestone Foundation’s 15% simple annual interest structure means the total repayment grows at a steady, predictable rate. It never compounds and it never surprises. Attorneys can confidently explain to their client exactly what the maximum repayment will be on day one, with no fine print and no hidden fees. For a case that takes 18 months to reach settlement, a $10,000 advance at simple interest costs $2,250 in total interest. The same advance from a for-profit funder at a 5% monthly compounding rate could cost over $12,000 in interest alone.

Conclusion

The rise of plaintiff litigation funding has created both opportunity and risk for the legal profession. For attorneys, the key is not simply finding funding. The key is finding a funding partner that puts their client’s best interest first, offers transparent terms that are easy to evaluate and explain, and operates with a mission that aligns with the attorney’s own ethical obligations and fiduciary duties.

By asking smarter questions about transparency, risk, timing, and ethics, attorneys can better protect their clients and strengthen case outcomes. Whether you are evaluating a funder for the first time or reassessing your current referral partners, these six questions provide a framework for meaningful due diligence that puts the client’s financial future at the center of every decision. Due diligence is not just a best practice. It is an essential part of fulfilling the attorney’s responsibility to recommend only those financial products and services that truly serve the client’s interests.

The Milestone Foundation is committed to setting a higher standard. We provide pre-settlement and post-settlement funding that supports plaintiffs without compromising their financial future.

By The Milestone Foundation Team 

At The Milestone Foundation, we work with many plaintiffs whose cases begin with a car accident. For them, the crash itself is only the beginning of the hardship. In the weeks and months that follow, they may be dealing with painful injuries, mounting medical bills, missed paychecks, transportation issues, and uncertainty about the future. 

That financial pressure becomes even heavier when insurance claims are delayed, denied, or underpaid. 

A recent report highlighting claim denials in the auto insurance industry has sparked an important conversation about fairness, transparency, and accountability. While every claim is different and some denials may be legitimate, the broader concern is one we see every day: when injured people cannot access timely support, families suffer. 

The Human Impact of Delayed or Denied Claims 

Behind every insurance claim is a real person trying to rebuild their life after an accident. 

When support is delayed or denied, plaintiffs may face impossible choices, such as: 

• Paying rent or covering medical treatment  

• Buying groceries or keeping up with utility bills  

• Returning to work too soon before fully healing  

• Taking on debt just to survive  

• Losing stability during an already traumatic time  

For many, these are not hypothetical concerns—they are urgent realities. 

Why Financial Stability Matters During Litigation 

Personal injury cases often take time to resolve. Investigations, treatment, negotiations, and legal proceedings do not happen overnight. Yet bills continue to arrive while a case is pending. 

That gap between injury and resolution is where plaintiffs are most vulnerable. Without support, financial stress can become overwhelming and may even pressure injured people into accepting less than they deserve simply to make ends meet. 

How The Milestone Foundation Helps 

The Milestone Foundation was created to offer a better path. As the only nonprofit in the consumer litigation funding industry, our mission is rooted in one belief: plaintiff funding should be a resource and a benefit, not a harm. 

We provide low-cost financial assistance designed to help plaintiffs maintain stability while their cases move forward. Our goal is not to profit from hardship, but to provide dignity, relief, and hope during a difficult chapter. 

For plaintiffs recovering from car accidents, that support can help cover essential living expenses such as: 

• Housing  

• Utilities  

• Groceries  

• Transportation  

• Everyday necessities  

Why Transparency and Consumer Protection Matter 

Conversations about insurance reform are ultimately conversations about people. Plaintiffs deserve a system that is fair, transparent, and responsive when they need help most. They deserve accountability from institutions that collect premiums and promise protection. 

Stronger consumer protections and greater transparency can help restore trust and ensure injured individuals are not left behind after an accident. 

Looking Ahead 

At The Milestone Foundation, we will continue standing with plaintiffs navigating financial hardship after car accidents and other serious injuries. Because access to justice is about more than the courtroom—it is also about whether someone can keep a roof overhead, put food on the table, and hold on long enough to see their case through. 

When claims go unpaid, the consequences are personal. That is why our work matters. 

By Julia Saunders 

For many Americans, the idea of “basic living expenses” has shifted from a baseline of stability to a constant financial strain. 

Basic living expenses refer to the essential costs required to maintain a household and function day-to-day. These typically include housing, utilities, groceries, transportation, and healthcare—expenses that are not optional, but necessary for survival. 

Today, those costs are higher than ever. Recent data (including consumer financial insights from Intuit research) shows that the average American household spends approximately $6,000 per month or more on basic living expenses. In many cases, housing alone consumes 25% to 33% of household income, leaving little flexibility for emergencies or unexpected financial disruptions. 

What “Basic” Actually Costs Today 

Across the United States, essential monthly expenses commonly break down as follows: 

• Housing (rent or mortgage, insurance, taxes): ~$2,000–$2,200/month  

• Transportation (car payments, fuel, insurance, public transit): ~$1,000–$1,100/month  

• Food (groceries and essentials): ~$660–$850/month  

• Utilities (electricity, water, internet, gas, trash): ~$400–$750/month  

• Healthcare (insurance, prescriptions, care): varies widely, often several hundred dollars monthly  

When combined, these necessities leave many households with little to no remaining income after covering the basics. And for families facing unexpected crises such as job loss, illness, or injury, the financial pressure can become immediate and overwhelming. 

The Hidden Financial Pressure Behind Legal Claims 

One of the most overlooked financial stressors comes when individuals are involved in legal claims that take months or even years to resolve. While a case moves through the legal system, daily life does not pause. Bills continue. Rent is due. Transportation is still required. Families still need food, childcare, and medical care. 

To illustrate this, in 2025, The Milestone Foundation reviewed the needs of plaintiffs it supported and found the following breakdown of financial pressure: 

• Combination of multiple essential needs: 45%  

• Housing costs: 34%  

• Transportation: 14%  

• Childcare: 6%  

These numbers highlight a critical reality: for many plaintiffs, financial strain is not caused by one expense, but by several overlapping necessities that become unmanageable at once. 

Where The Milestone Foundation Fits In 

As a provider of low-interest pre-settlement funding, The Milestone Foundation helps plaintiffs maintain financial stability while their legal cases are pending. This support is designed to cover essential living costs, so individuals are not forced into financial desperation while waiting for fair resolution. By helping plaintiffs meet basic needs like housing, utilities, transportation, and childcare, the Foundation helps ensure that financial pressure does not dictate legal outcomes. 

Access to Justice Includes Financial Stability 

Access to justice is often discussed in terms of legal rights, representation, and fair outcomes. But there is another layer that is just as important: the ability to survive financially while pursuing justice. When basic living costs consume nearly all household income, even a strong legal claim can become difficult to sustain. Financial instability can pressure individuals into settling early or accepting less than they deserve simply to meet immediate needs. Addressing this gap is central to The Milestone Foundation’s mission—ensuring that plaintiffs are not forced to choose between financial survival and fair legal recovery. 

The Bigger Picture 

Rising costs of living are not a temporary challenge—they reflect a broader economic reality affecting millions of households. As essential expenses continue to climb, more Americans find themselves living one unexpected event away from financial instability. Understanding this context is essential to understanding why financial support during litigation matters. Because access to justice doesn’t just happen in court—it happens at the kitchen table, at the rent due date, and in the everyday decisions families are forced to make while waiting for their cases to resolve. 

 

By Rachel McCarthy

At The Milestone Foundation, everything we do begins with a simple but powerful idea: plaintiff funding should be a resource and a benefit, not a harm, to plaintiffs. That belief is the reason we chose to be a nonprofit organization—and it continues to guide how we serve the legal community every day. 

What It Means to Be a Nonprofit 

The Milestone Foundation is a 501c3 public charity, incorporated in New York State. We are the only nonprofit in the consumer litigation funding industry.  

Being a nonprofit means that our organization exists to advance a mission rather than generate profits for owners or shareholders. Any funds we receive—whether through repaid advances, donations, grants, or partnerships—are reinvested directly into our programs, services, and initiatives. 

For The Milestone Foundation, this structure ensures that every dollar supports the people we care about most: plaintiffs. It creates accountability, transparency, and a deep sense of responsibility to the communities we serve. 

Why We Chose the Nonprofit Path 

The decision to become a nonprofit wasn’t just a legal or financial one—it was a reflection of         our values. 

We recognized early on that the consumer litigation funding industry is not plaintiff friendly. Traditional funding companies charge high interest rates that can leave a plaintiff depleted once they finally receive their settlement. The priority of the traditional pre-settlement funding industry is making money, not helping to keep plaintiffs stable while they go through litigation.  

But our origination was also designed as an experiment: can a nonprofit organization make it in the consumer litigation funding industry? Is it possible to provide plaintiff funding at low-cost? Is there an appetite for this among the civil justice community? Would trial lawyers show up and support this type of nonprofit?  

Ten years later, the answer to these questions is YES.  

The challenges we aim to address require long-term commitment, trust, and collaboration. A nonprofit model allows us to: 

• Focus entirely on impact rather than revenue generation 

• Build trust with donors, partners, plaintiffs, and the legal community 

• Access funding opportunities like grants and charitable contributions 

• Operate with transparency, ensuring stakeholders know how resources are used 

Most importantly, it keeps us aligned with our mission of fair funding. 

How The Milestone Foundation Operates as a Nonprofit 

Running a nonprofit involves more than just having a mission—it requires structure, governance, and accountability. 

Here’s how we put those principles into action: 

1. Mission-Driven 

Everything we do is designed to create measurable, meaningful impact for plaintiffs struggling to cover basic living expenses. We continually evaluate our operations to ensure they are effective and aligned with our goals. 

2. Responsible Financial Stewardship

We carefully manage our resources, prioritizing efficiency and sustainability. Funds are allocated thoughtfully to maximize the benefit to those we serve. 

3. Community and Donor Support

Our work is made possible by the generosity of donors and partners. Their support allows us to expand our reach and deepen our impact. 

4. Governance and Accountability

We are guided by a board and leadership team committed to ethical decision-making and organizational integrity. Regular reporting and transparency help ensure we remain accountable to our supporters and community. 

Why It Matters 

Choosing to be a nonprofit shapes everything about The Milestone Foundation—from how we make decisions to how we measure success. 

It means: 

• Putting people before profit 

• Staying committed to long-term industry change 

• Building relationships rooted in trust 

• Being a leader in the consumer litigation funding industry 

• Ensuring that impact, not income, defines our success 

Looking Ahead 

As we continue to grow, our nonprofit identity will remain at the heart of everything we do. It’s not just a designation—it’s a commitment to serve with integrity, compassion, and purpose.  

The Milestone Foundation is proud to be a nonprofit organization, and we are grateful for everyone who helps make our mission possible. 

By Rachel McCarthy

On March 4, a Missouri judge gave initial approval to the proposed $7.25 billion settlement, which would resolve thousands of pending lawsuits claiming that Bayer’s Roundup causes cancer.  

Only a day later, dozens of consumer litigation funders already have webpages up, ready to encourage plaintiffs to seek settlement advances.  

Consumer litigation funding plays an important role in our legal system, enabling plaintiffs to pursue justice rather than dropping their claims or settling for less than their injuries deserve. However, for this funding to truly support justice, funders must make their funding terms clear and in plain language from the get-go of engaging with an interested plaintiff and offer support at rates that are not exploitative or nearly usurious.  

The industry must also reassess how it positions its offerings. Consumer litigation finance should be viewed as a last resort by plaintiffs and leveraged after plaintiffs have discussed with their attorneys; funders should not proactively solicit plaintiffs to seek settlement advances.  

This growing industry is like the Wild West of our legal system—and the unclear terms on websites that offer plaintiffs pre-settlement funding, coupled with the lack of regulation on interest rates that can be charged, highlight critical opportunities for reform. 

A Nationally Unregulated Industry  

Consumer litigation funding began in the 1990s as a tool for plaintiffs who were increasingly seeing their personal injury claims deliberately dragged out by insurance companies who realized that the longer litigation would take, the less money a plaintiff would accept. By providing plaintiffs a way to cover the gap in paying life expenses while they pursued their case, the attorney could see the lawsuit through to its just end. This funding is typically used to cover critical daily expenses such as housing, transportation, and groceries. Unlike commercial litigation funding, it is not used to finance the litigation itself. But in the decades since consumer litigation funding’s beginnings, it has grown into a sprawling, largely unregulated industry.   

While some states have enacted meaningful legislation for plaintiffs around litigation funding, most states lack any formal protection for plaintiffs. Because plaintiff funding advances are non-recourse, many traditional funders can easily navigate around states’ usury and other consumer protection laws.  

Further, there is no federal cap on the interest rates that lenders can charge for litigation funding. Annual percentage rates (APRs) on advances in this market range from 30% and can soar as high as up to 124%. This lack of regulation exposes plaintiffs to financial risk while they pursue their case or wait for their settlement.  

Roundup Funding Terms  

A consumer looking for a settlement advance for their Roundup injury claims will likely have little chance of understanding the terms of what they are getting. Even a cursory review of half a dozen funders’ Roundup funding pages leaves the consumer in the dark about the terms of their funding.  

While it’s easy for someone to enter their name, email, requested funding amount, and preferred delivery method for the advance, these pages provide no meaningful disclosure of the funding terms, like the interest rate or Annual Percentage Rate, of their repayment schedule, or additional fees.  

For the average consumer, this looks like a low-stakes way to secure funding for a settlement they believe is on the way. But what they may not realize is that they could owe tens of thousands of dollars on their advance by the time their settlement arrives.  

One funder states, “We can provide you with up to $1 million in legal funding. The money can be deposited in your bank account within 24 hours of your application’s approval. Applying is easy and takes just a few minutes and can be done online or with one of our agents.”  But nowhere on its page does it walk a plaintiff through the interest rates and how that could impact their total recovery after the settlement.  

The opaque nature of the consumer litigation funding industry leaves plaintiffs vulnerable to exploitation after they have already suffered a significant trauma that brought them into the legal process in the first place.  

Opportunities for Reform  

Consumer litigation funding is a critical bridge to justice for hundreds of thousands of plaintiffs across the country. The industry must balance risk with the goal of opening up access to justice—not just enriching funders at the expense of qualified plaintiffs.  

Whether that is funders undertaking a more discerning vetting process for whom they fund, or building their financing model with an interest rate that still provides plaintiffs with most of their settlement, failure to adjust the industry leaves this critical option open to criticism and vulnerable to unilateral efforts to stop the practice. It puts plaintiffs across the country who rely on consumer litigation funding at risk.  

States across the country have introduced legislation to protect consumers, from Ohio and Oklahoma to Nebraska and New York. These states have established benchmark requirements for litigation funders to engage with plaintiffs, but more needs to be done at the national level.  

Instead of allowing plaintiffs to quickly sign up for loans without disclosures of forthcoming APRs, federal legislation should require up-front disclosures of interest rates, expected APRs, and plan-language contract terms. Funders should also be limited on the total amount of a plaintiff’s final settlement that they can recover. Finally, a national cap on interest rates would protect plaintiffs from exploitative lenders, balancing risk with plaintiffs’ ability to access the settlement they are entitled to.  

These common-sense reforms would benefit not only those currently seeking funding after a major national settlement announcement but also all plaintiffs across the country.  

Rachel McCarthy is the Executive Director of The Milestone Foundation.  

By Julia Saunders

In the litigation funding industry, conversations around interest caps are becoming more common—often positioned as a necessary protection for plaintiffs. 

At The Milestone Foundation, we take a different approach. 

We don’t need an interest cap because our rates are already designed to be fair, transparent, and significantly lower than all other pre-settlement funding options. 

A Different Model by Design 

As a nonprofit focused on ethical consumer litigation funding, our goal isn’t to maximize returns—it’s to support plaintiffs during some of the most challenging periods of their lives. 

That means offering: 

• Simple, transparent terms 

• No compounding structures that rapidly increase costs  

• Rates that prioritize long-term fairness  

What the Numbers Show 

When you compare outcomes over time, the difference is clear. 

Over the course of 2–3 years, traditional funding models that rely on compounding interest can dramatically increase what a client ultimately owes. Even with caps in place, repayment amounts can grow quickly and often doubling or tripling the original advance. 

By contrast, The Milestone Foundation’s model uses a 15% simple interest rate for pre-settlement funding and a 10% simple interest rate for post-settlement funding, resulting in significantly lower total repayment amounts over time. 

As shown in the chart below, plaintiffs funded through our model consistently owe far less than they would under common industry structures like: 

• 18% semi-annual compounding  

• 3% monthly compounding  

Why This Matters for Plaintiffs 

Litigation can take years. During that time, financial pressure shouldn’t force someone into settling early or accepting less than their case is worth. 

Lower, more predictable costs mean: 

• Greater financial stability during the case  

• Less pressure to settle prematurely  

• More equitable outcomes overall  

A Focus on Fairness, Not Limits 

Interest caps are one way to address high-cost funding—but they’re not the only solution. 

At The Milestone Foundation, we believe the better approach is to build fairness into the model from the start. 

By keeping rates low and structures simple, we ensure that plaintiffs are supported throughout the legal process. 

By Julia Saunders

As state-level regulation of consumer litigation funding expands rapidly in 2026, attorneys nationwide need to understand how new laws affect their clients’ access to fair, transparent funding. The Milestone Foundation offers a nonprofit alternative designed to help plaintiffs cover expenses during litigation with simple interest, never compounding.

Key Legislative Trends

State legislatures across the United States are increasingly focusing on consumer litigation funding (CLF), with new laws and proposed bills aimed at regulating disclosure requirements, fee structures, and funder conduct. The 2025–2026 legislative cycle reflects a broader shift toward formal regulatory frameworks rather than outright bans on litigation finance.

What Is the Current State of New York’s Consumer Litigation Funding Act?

New York has emerged as the most active state in shaping litigation funding regulations. In December 2025, the state enacted the Consumer Litigation Funding Act (A804-C / S1104A), establishing a comprehensive framework governing consumer litigation funding agreements. The law took effect in June 2026.

Key provisions include:

• A cap limiting funder recovery to 25% of the gross settlement or judgment
• Mandatory plain-language contract requirements
• A 10-day consumer rescission period
• Registration and regulatory oversight of litigation funders
• Prohibitions on funders influencing litigation strategy or settlement decisions

These provisions establish New York as a model jurisdiction for structured regulation of the industry (Goldberg Segalla, 2025).

While this legislation is progress, the bill still doesn’t cap interest rates that lenders can charge, nor does it impose rules or restrictions on the types of fees that can be charged. As the legislature looks to further protect plaintiffs, these areas must be targeted for reform and additional oversight.

Litigation funding should provide plaintiffs with a bridge to seek justice, not expose them to additional risk after trauma (McCarthy Woodruff, 2026).

Building on this framework, New York Senate Bill S08808 (2026) is currently under consideration. The bill would further refine regulatory structure by:

• Placing oversight under financial services law (Article 10 framework)
• Requiring annual reporting and formal registration of funding entities
• Standardizing contract requirements
• Defining covered litigation funding transactions, including advances up to $500,000 tied to case proceeds

Rather than introducing new regulation from scratch, S08808 represents a technical expansion and administrative refinement of the 2025 law (LegiScan, 2026).

What Are the New 2026 Legislative Developments in California, Kansas, and Ohio?

Since the original publication of this article, three additional states have introduced or advanced significant litigation funding legislation. These developments signal that the regulatory momentum is not limited to New York but is spreading across the country.

California AB-743: Lawsuit Financier Licensing Under the DFPI

California Assembly Bill 743 would bring lawsuit financiers under the California Department of Financial Protection and Innovation (DFPI) licensing framework. Currently under consideration in the 2025-2026 session, the bill proposes significant regulatory requirements:

• A $250,000 surety bond requirement for litigation funding entities
• Civil penalties of up to $100,000 for first violations and $250,000 for repeat violations
• Mandatory licensing through the DFPI, bringing funders under the California Financing Law
• Disclosure requirements for contract terms, interest rates, and fee structures

If passed, California AB-743 would position California as the largest state with a formal licensing framework for consumer litigation funding, following New York’s lead with an enforcement-first approach.

Kansas SB 426: Transparency in Consumer Legal Funding Act

Kansas Senate Bill 426, known as the Transparency in Consumer Legal Funding Act, has cleared committee and is awaiting floor action. Key provisions include:

• Registration with the Kansas Secretary of State for all litigation funding entities
• A prohibition on foreign government or foreign adversary funding of litigation
• Consumer protections with statutory damages of up to $10,000 per violation
• Attorney fee recovery for consumers who prevail in enforcement actions
• Plain-language disclosure requirements for funding agreements

Kansas SB 426 represents a growing trend among Midwestern states to regulate funding transparency while addressing national security concerns about foreign funding sources.

Ohio HB 105: Comprehensive Non-Recourse Litigation Funding Reform

Ohio House Bill 105 proposes to repeal and replace existing Section 1349.55 with a new comprehensive framework under Sections 1357.01-1357.08. This is one of the most detailed regulatory proposals outside of New York:

• Prohibits foreign-domiciled funding entities from operating in Ohio
• Requires attorney consent before funders can access confidential case information
• Establishes consumer lien priority protections to ensure plaintiffs receive their share first
• Grants the Ohio Attorney General enforcement authority over violations
• Creates a registration system for all litigation funding providers

Ohio HB 105 would make Ohio the most comprehensively regulated state for non-recourse litigation funding in the Midwest, with strong consumer and attorney protections.

State-by-State Regulation Comparison Table

The table below compares all five states with enacted or pending litigation funding regulations, highlighting key provisions attorneys need to know.

State	Key Statute	Licensing Required	Interest Cap	Disclosure Required	Rescission Period	Foreign Funding Restricted
New York	A804-C / S1104A + S08808	Yes (Article 10)	25% of gross settlement cap	Yes	10 days	Pending
Ohio	HB 105 (Sections 1357.01-.08)	Registration	Referenced in existing Section 1349.55	Yes	Not specified	Yes
Oklahoma	OK Stat Section 3-801 et seq.	Registration	Reasonableness standard	Yes	5 days	Not specified
Nebraska	NE Rev Stat Sections 25-3301 to 25-3307	Registration	None specified	Yes	5 days	Not specified
North Carolina	NC GS Section 1-630 et seq.	Registration	None specified	Yes	3 days	Not specified

As these regulations take shape, attorneys can refer clients to The Milestone Foundation’s Partners for Justice program for ethical, simple-interest funding options that comply with evolving state requirements.

National Trends in Litigation Funding Legislation (2025-2026)

Outside of New York, state legislatures are increasingly exploring similar regulatory approaches, with several common themes emerging across proposals.

A. Consumer Protection and Licensing Frameworks

A growing number of states are considering or drafting legislation that would:

• Require licensing or formal registration of litigation funding companies
• Mandate standardized disclosures and contract language
• Introduce cooling-off or rescission periods
• Impose limits on fees or total repayment amounts, either through caps or “reasonableness” standards

These proposals closely follow the New York model and reflect a broader shift toward treating litigation funding as a regulated financial service industry.

B. Increased Transparency Requirements

Another major trend is expanded transparency obligations. Some legislative proposals would require disclosure of litigation funding agreements:

• To courts
• To opposing parties
• In certain cases, in mass tort or class action proceedings

These proposals are often linked to broader concerns about transparency in complex litigation and potential third-party influence. Similar ideas are reflected in federal proposals such as the Litigation Funding Transparency Act of 2026, which would require disclosure in federal multidistrict litigation (MDLs) and class actions (Institute for Legal Reform, 2026).

C. Control Restrictions and “Champerty-Adjacent” Reforms

Rather than reinstating traditional champerty doctrines, modern legislation tends to regulate funder conduct indirectly by restricting control and influence. Common provisions include:

• Prohibitions on funders directing litigation strategy
• Restrictions on influencing settlement decisions
• Limitations on referral arrangements between funders and attorneys
• Safeguards addressing conflicts of interest and confidentiality concerns

These measures function as modern equivalents of champerty restrictions, focusing on maintaining attorney independence rather than banning funding outright.

Key Takeaways for Attorneys

The 2025-2026 legislative landscape reflects a clear national trend:

• New York is currently the leading regulatory model for consumer litigation funding
• States are moving toward structured regulation rather than prohibition
• The primary policy themes include consumer protection, transparency, and limits on funder control
• California, Kansas, and Ohio are the most recent states to join the regulatory wave
• Additional states are expected to introduce New York-style frameworks in upcoming legislative sessions

For attorneys navigating this changing landscape, understanding state-specific requirements is essential when advising clients about litigation funding options. Contact The Milestone Foundation to learn more about how our nonprofit, simple-interest funding model aligns with emerging state regulations while putting plaintiffs first.

Connecting Regulation to Access to Justice

As state-level regulation of litigation funding continues to evolve, the broader conversation remains centered on how to balance consumer protection with meaningful access to justice. Stronger oversight, clearer disclosures, and fairer fee structures all play an important role in ensuring plaintiffs are treated equitably within the litigation finance ecosystem.

Organizations like The Milestone Foundation operate within this same landscape, providing pre-settlement funding intended to support plaintiffs facing financial pressure during long litigation timelines. As regulatory frameworks develop, the focus on ethical, transparent funding models remains central to ensuring that plaintiffs can pursue their claims without being forced into premature or disadvantaged settlements due to financial hardship. Apply for funding or refer a client to discover how fair, transparent funding works.

Sources

• LegiScan, New York Senate Bill S08808 (2026)
  https://legiscan.com/ (bill tracking database)
• Goldberg Segalla, Analysis of New York Consumer Litigation Funding Act (A804-C / S1104A)
  https://www.goldbergsegalla.com/insights/ (industry legal commentary)
• Institute for Legal Reform (ILR), Litigation Funding Transparency Act of 2026 Overview
  https://instituteforlegalreform.com/
• Bloomberg Law, NY Consumer Law Is First Step in Combatting Predatory Lending
  https://news.bloomberglaw.com/legal-exchange-insights-and-commentary/ny-consumer-law-is-first-step-in-combatting-predatory-lending
• California Legislative Information, AB-743 California Financing Law: lawsuit financiers
  https://leginfo.legislature.ca.gov/
• Kansas Legislature, SB 426 – Transparency in Consumer Legal Funding Act
  http://www.kslegislature.org/li/
• Ohio Legislature, HB 105 – Non-Recourse Litigation Funding Regulations
  https://www.legislature.ohio.gov/

By: Julia Saunders

U.S. veterans have dedicated their lives to serving their country, yet many face significant challenges long after their service ends. From exposure-related harms to financial instability, veterans can often be navigating complex legal and personal battles at the same time. 

In recent years, many veterans have become involved in large-scale litigation tied to their service, including the 3M Combat Arms Earplug litigation, Camp Lejeune water contamination claims, and PFAS-related lawsuits affecting military bases nationwide. These cases are often lengthy, complex, and can take years to resolve. 

At the same time, veterans are increasingly facing financial strain. Recently, more than 10,000 veterans have lost their homes to foreclosure since May 2025, with another 90,000 at risk. For a population that is already historically underserved, these challenges highlight a growing need for additional support systems. 

A Unique Financial Challenge 

For veterans involved in litigation, the financial burden can be especially difficult. While pursuing justice, many are also managing everyday expenses—housing, food, healthcare, and supporting their families. 

When cases stretch over long periods of time, this financial pressure can impact decision-making. Plaintiffs may feel forced to settle early or accept less favorable outcomes simply to stay afloat. 

The Importance of Ethical Funding Options 

This is where ethical plaintiff funding becomes critical. 

Not all funding options are created equally. Veterans need access to transparent, fair, and responsible funding solutions that prioritize their wellbeing.  

Ethical funding means: 

• Clear, upfront terms  

• Reasonable cost structures  

• No influence over legal decisions  

• A focus on supporting plaintiffs through the process—not taking advantage of them  

For veterans who have already sacrificed so much, having access to this kind of support can make a meaningful difference in their ability to pursue justice on their own terms. 

The Milestone Foundation’s Perspective 

The Milestone Foundation provides pre-settlement funding to plaintiffs navigating long and complex litigation, helping reduce financial pressure while they wait for their cases to resolve. 

We believe that access to justice should never be determined by financial circumstances. For veterans—who have given so much in service—ensuring access to ethical, compassionate support is especially important. 

As the legal landscape continues to evolve, expanding fair and responsible funding options for underserved populations like veterans remains a critical part of the broader access-to-justice conversation. 

Sources 

• NPR, Veterans face rising foreclosure risk after VA program changes
  https://www.npr.org/2026/04/02/nx-s1-5750814/veterans-mortgages-foreclosure-va-rescue 

By: Julia Saunders

In complex litigation, achieving a fair outcome often takes time, patience, and thoughtful decision-making. You might be out of work as a result of your accident or tragedy, but everyday expenses don’t pause. While a case moves forward, financial pressure can quickly become overwhelming.  

When that pressure builds, it can start to influence decisions. Some plaintiffs may feel the need to resolve their case sooner than they would like, but not because it reflects the true value of their claim, but because immediate financial stress becomes the driving factor. 

That’s where pre-settlement funding and responsible plaintiff funding can make a meaningful difference. 

The Milestone Foundation provides low-cost litigation funding designed to help plaintiffs maintain financial stability while their case is ongoing. We believe that access to fair pre-settlement funding plays an important role in helping individuals stay the course during the legal process. 

When plaintiffs have access to responsible financial support, they are better positioned to focus on their recovery, remain engaged in their case, and make informed decisions without the pressure of immediate financial hardship. 

This type of plaintiff funding does not impact the legal strategy or the merits of a case; it helps ensure that financial strain is not the deciding factor in critical decisions. 

Plaintiff funding gives attorneys the time they need to focus on the case, while ensuring their clients are financially supported and not pressured to settle before the right outcome is reached. 

Maximizing a case outcome isn’t about prolonging litigation; it’s about ensuring plaintiffs have the stability they need to see their case through with confidence. By reducing financial pressure through low interest funding, we help create an environment where decisions can be made thoughtfully and fairly. 

At The Milestone Foundation, our mission is to provide ethical pre-settlement funding so plaintiffs can pursue the outcome they deserve, and attorneys can feel confident their clients are supported every step of the way. 

By: Julia Saunders

The Compassionate Counsel Award is about more than legal excellence. It’s about recognizing attorneys who lead with empathy, integrity, and an unwavering commitment to their clients. 

Trial lawyers play a unique and powerful role in our justice system. They are not only advocates in the courtroom but also trusted guides for individuals navigating some of the most challenging moments of their lives. For many plaintiffs, the legal process is long, complex, and emotionally taxing. The attorneys who stand out are those who understand that their role goes beyond legal strategy—they show up with compassion. 

What Is Compassionate Counsel? 

The Compassionate Counsel Award honors attorneys who exemplify the values of fairness, empathy, and justice—both inside and outside the courtroom. 

These are attorneys who: 

• Put their clients’ wellbeing first, even beyond legal outcomes 

• Demonstrate empathy and humanity alongside strong legal advocacy 

• Uphold the highest standards of integrity in pursuit of justice 

• Recognize the real-life challenges plaintiffs face during litigation 

Whether helping a client navigate financial stress, connecting them with resources like pre-settlement funding, or simply taking the time to listen and support, compassionate counsel understand that their clients are more than just cases—they are people. 

Why This Recognition Matters 

For many plaintiffs, the time between filing a case and reaching a resolution can be one of the most difficult periods of their lives. Lost income, the need for childcare, food, transportation, and other everyday expenses can quickly create financial strain. 

This is where the broader ecosystem—including ethical consumer litigation funding—plays a role. But just as important are the attorneys who recognize these challenges and advocate for their clients holistically. 

The Compassionate Counsel Award shines a light on those attorneys who go above and beyond—who not only fight for justice, but also ensure their clients feel supported, respected, and understood throughout the process. 

Celebrating Leadership in the Plaintiff Bar 

By recognizing attorneys who embody these values, The Milestone Foundation aims to celebrate leaders within the plaintiff bar and inspire others to approach their practice with the same commitment to compassion and integrity. 

These individuals are setting a higher standard—one that prioritizes people alongside outcomes. 

Help Us Recognize Compassionate Counsel 

We invite you to help us shine a spotlight on attorneys who truly make a difference. 

If you know an attorney who embodies fairness, empathy, and a client-first approach, we encourage you to submit a nomination. 

Nominate an attorney here: http://bit.ly/4lNhZIl 

By: Rachel McCarthy & Tabitha Woodruff

New York’s new Consumer Litigation Funding Act marks an important step toward reforming an industry that has long operated with limited oversight and, in many cases, at the expense of the very people it was meant to help. 

Set to take effect in June, the law introduces stronger consumer protections, including plain-language contracts and a cap preventing funders from taking more than 25% of a plaintiff’s settlement or judgment. These changes represent meaningful progress—but they are only the beginning. 

Why Litigation Funding Exists 

Litigation funding was originally designed to serve as a financial bridge for plaintiffs navigating the often lengthy legal process. Pre-settlement and post-settlement funding provides support for everyday living expenses—not legal fees—so individuals can maintain stability while pursuing their case. 

For many plaintiffs, especially those from low- and middle-income households, the alternatives are limited: 

• Accept a lower settlement early just to cover immediate expenses
• Take on high-interest debt 
• Risk their financial security while waiting for a case to resolve 

In these moments, funding can be a lifeline. But without proper safeguards, it can also create new financial burdens. 

The Problem with For-Profit Funding 

Today, the litigation funding landscape is largely unregulated at the federal level. For-profit funders often charge annual percentage rates ranging from 30% to over 100%, far exceeding traditional lending products like credit cards. 

Because these advances are non-recourse—meaning repayment is only required if a case is successful—many lenders operate outside traditional consumer protection laws. This structure allows them to impose complex and often excessive repayment terms on plaintiffs who are already in vulnerable situations. 

What This Looks Like in Practice 

Consider three hypothetical families who each receive a $10,000 advance while waiting for their case to resolve: 

Family A (15% simple interest): Owes $14,500 after three years 

Family B (30% compounded): Owes approximately $24,325 

Family C (50% compounded): Owes over $43,000 

While these scenarios are illustrative, they reflect a broader reality: high-cost funding can significantly reduce the financial recovery plaintiffs ultimately receive—limiting their ability to rebuild after a difficult experience. 

What the New Law Changes 

The Consumer Litigation Funding Act introduces several important protections, including: 

• A cap limiting funders to 25% of a settlement or judgment 
• Clear disclosure requirements in plain language 
• A 10-day right of rescission for consumers 
• Registration and oversight by the New York Department of State 
• Restrictions on misleading practices and interference in legal decisions 

These measures bring much-needed transparency and accountability to the consumer litigation funding industry. 

Where More Work Is Needed 

Despite this progress, key gaps remain. 

The law does not place limits on interest rates or fully regulate the fees that can be charged—leaving room for practices that may still disadvantage plaintiffs. As policymakers continue to evaluate the industry, these areas will be critical to address to ensure comprehensive protection for plaintiffs.  

A Better Path Forward 

Pre-settlement and post-settlement funding should serve its original purpose: providing plaintiffs with the financial stability they need to pursue justice—not creating additional financial strain. 

At The Milestone Foundation, we believe there is a better way. As a nonprofit litigation funder, our model is designed to provide fair, transparent support without prioritizing profit. Our goal is simple: to ensure that no one has to choose between their financial stability and their right to seek justice. 

Looking Ahead 

New York’s new law is a meaningful step forward—but it is not the finish line. Continued reform, oversight, and innovation are essential to creating a system that truly works for plaintiffs. 

Because access to justice should never depend on the ability to afford the wait.