Law Suit Financing
Law suit financing is a strategy used by individuals involved in litigation, but have not yet been awarded monetary settlement, to obtain lump sum cash. Pending awards are used as collateral to secure advanced funds. Funds are usually obtained from funding sources such as private investors or cash advance providers.
The majority of law suit financing advances are funded as "non-recourse". This process is used when litigants obtain advanced funds against a lawsuit in which the verdict is undetermined. If recipients are unsuccessful in the courtroom they are not held responsible for repayment of advanced funds
Non-recourse also protects those who receive awards at lesser amounts than cash advances. If advances exceed reward, recipients are not responsible for deficiency amounts.
Obtaining lawsuit funding involves locating a funding source and providing case documentation. Funding sources review the case with Plaintiff's legal counsel to determine the potential for winning the case in court.
While there is never a guaranteed win, lawyers can assess potential for favorable outcome. Funding sources rarely gamble on 50/50 or less. Instead, they prefer winning forecast to be in the 75-percent or higher bracket.
Once an offer is accepted, Plaintiffs pay a financing fee and agree to repay advanced funds upon settlement. It's important to determine assessed fees. Some funding sources charge a flat fee which means a one-time flat rate is charged for upfront funds. Others assess a recurring fee which is assessed on a monthly or quarterly basis.
Litigation is known for extending for long periods of time. People who cannot maintain their standard of living often seek out pre-settlement funding to cover basic living expenses. Another common reason is to obtain cash for inheritance suspended in probate.
A strange irony of law suit financing is lawyers oftentimes recommend their clients seek advanced funds, but refuse to sign contracts with financing companies. In some states, lawyers are prohibited from signing liens required to obtain cash advances.
It is best to obtain legal counsel prior to seeking out funding sources. At minimum, conduct research surrounding cash advance laws using pending lawsuits as collateral. If lawyers are unwilling to work with funding sources, chances are high Plaintiff's will not be able to obtain necessary funds.
Law firms are prohibited from engaging in law suit funding as this is a conflict of interest. However, when legally allowed, lawyers can refer clients to funding sources that specialize in pre-settlement funding, such as Simon Volkov.
In states where law suit financing is offered, pre-settlement funds can be obtained for a variety of cases. Some of the most common include motor vehicle accidents, medical malpractice, product liability, pharmaceutical litigation, worker's compensation, and wrongful death.
It can be advantageous to compare funding sources to obtain the highest offer. Take time to investigate funding sources to ensure working with reputable investors.
At Simon Volkov, we consider law suit financing opportunities. If your case has a high probability of receiving award money we may be able to provide a funding package at rates you can afford.
To begin the process, submit requested information via the law suit financing form and a representative will contact you to discuss your needs.
Published on April 11, 2011 at 03:14 AM