Lawsuit funding has become increasingly popular amongst plaintiffs looking to extend their personal injury cases in hopes for larger settlements. Due to the downturn in the economy and recent job loss lawsuit funding is now becoming a more viable option. The plaintiffs that tend to use lawsuit funding as an option are those people who are strapped for cash and need help paying bills and out of pocket expenses prior to a legal case reaching a settlement.
Over the last few years, lawsuit funding has become a phenomena within the legal community. While many attorneys use lawsuit funding as a way to litigate class action lawsuits & large personal injury cases, many are advising their clients to investigate this option to help keep their case alive. Due to the deep pockets of insurance companies and corporations, litigation can extend out for years before a verdict is reached. These companies have tenacious defense teams with deep pockets willing to hold up a verdict at all costs. Most companies will intentionally hold up a case in hopes for a lesser settlement. It is always recommended that a client never prematurely accept an offer without fully understanding the financial consequences at hand. An experienced personal injury attorney will advise his client to seek ongoing medical treatment prior to accepting a less offer.
When a company provides funding for a legal case the money does not come as a loan. Lawsuit funding is a financial arrangement between the lender or investment company and the plaintiff. A loan is defined as money that is borrowed by a person or company which will be paid back within a certain time period. Lawsuit funding is non recourse meaning money advanced to the plaintiff is contingent upon the outcome of the case. The lender cannot recover payments made if the client's case is lost, and the client gets to keep the full amount of the advancement.
When a person decides to hire legal representation to help fight for their legal battle they oftentimes have an arrangement to pay the attorney a contingent fee. This fee is typically a percentage of the winnings from the case. If the plaintiff wins the case, the personal injury attorney will be the first person to receive compensation. If a person decides to secure lawsuit funding as an option the lender would be the next in line to receive payment. The remainder of the monies left over would be paid directly to the plaintiff.
If the amount of money won by the plaintiff is less than what was borrowed, the finance company will receive the remaining amount of money, only after the attorney is paid their fee. The remainder balance is not paid back to the lender.
There four different lawsuit funding types include:
- Pre settlement funding
- Structured settlement funding
- Commercial litigation financing
- Law Firm loans
While alternative methods are preferred by some lawsuit funding is becoming a viable option within the legal industry.
Over the last few years, lawsuit funding has become a phenomena within the legal community. While many attorneys use lawsuit funding as a way to litigate class action lawsuits & large personal injury cases, many are advising their clients to investigate this option to help keep their case alive. Due to the deep pockets of insurance companies and corporations, litigation can extend out for years before a verdict is reached. These companies have tenacious defense teams with deep pockets willing to hold up a verdict at all costs. Most companies will intentionally hold up a case in hopes for a lesser settlement. It is always recommended that a client never prematurely accept an offer without fully understanding the financial consequences at hand. An experienced personal injury attorney will advise his client to seek ongoing medical treatment prior to accepting a less offer.
When a company provides funding for a legal case the money does not come as a loan. Lawsuit funding is a financial arrangement between the lender or investment company and the plaintiff. A loan is defined as money that is borrowed by a person or company which will be paid back within a certain time period. Lawsuit funding is non recourse meaning money advanced to the plaintiff is contingent upon the outcome of the case. The lender cannot recover payments made if the client's case is lost, and the client gets to keep the full amount of the advancement.
When a person decides to hire legal representation to help fight for their legal battle they oftentimes have an arrangement to pay the attorney a contingent fee. This fee is typically a percentage of the winnings from the case. If the plaintiff wins the case, the personal injury attorney will be the first person to receive compensation. If a person decides to secure lawsuit funding as an option the lender would be the next in line to receive payment. The remainder of the monies left over would be paid directly to the plaintiff.
If the amount of money won by the plaintiff is less than what was borrowed, the finance company will receive the remaining amount of money, only after the attorney is paid their fee. The remainder balance is not paid back to the lender.
There four different lawsuit funding types include:
- Pre settlement funding
- Structured settlement funding
- Commercial litigation financing
- Law Firm loans
While alternative methods are preferred by some a settlement loan is becoming a viable option within the legal industry.
