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Lawsuit financing is illegal, Ohio high court says.

Publication: Trial
Publication Date: 01-OCT-03 		Format: Online
Delivery: Immediate Online Access

Article Excerpt
The Ohio Supreme Court has unanimously affirmed that lawsuit financing in the state is illegal, basing its ruling on a theory that was not argued in any of the lower courts. The court declared the practice of advancing funds secured only by an interest in a pending lawsuit--and in this case, at a rate exceeding 180 percent per year--to be maintenance and champerty, both of which are prohibited by state statutes. (Rancman v. Interim Settlement Funding Corp., 789 N.E.2d 217 (Ohio 200:4).)

The two defendant companies are part of an emerging industry that provides cash to plaintiffs while their lawsuits are pending; in exchange the companies receive a portion of any settlement of verdict. The plaintiff, Roberta Rancman of Akron, Ohio, sought to have her contract with the defendants invalidated, arguing that the amount due...

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