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- The legal funding industry started around 1997, with a few small companies providing small advances to plaintiffs in personal injury lawsuits
- Over the past ten years, a number of larger, better-capitalized companies have developed in the industry, able to offer lower financing costs and better underwriting standards
- ALFA was formed in 2004 by 15 of the leading companies in the industry
- ALFA’s purpose was, and is:
- To establish and maintain the highest ethical standards and fair business practices within the legal funding industry
- To represent ALFA’s members and their interests to regulators, legislators, the media and the public
- To develop awareness of the industry and to ensure that facts about the industry are accurately disseminated
- To work towards establishing legal and regulatory frameworks in individual states that meet the needs and concerns of all parties interested in legal funding
- In 2005, ALFA reached a voluntary agreement with the Attorney General of New York State to regulate the conduct of the legal funding industry within that state: this was the first agreement of its kind in the nation
- In 2007, ALFA worked with legislators in the State of Maine to help pass legislation regulating the conduct of the legal funding industry within that state: this was the first such legislative action of its kind in the US
- ALFA members are believed to have originated approximately 90% of currently outstanding legal fundings
- Research at one leading company shows that over 60% of funds advanced go to prevent a foreclosure or eviction action against the legal financing client
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