Five Benefits Of Which Attorneys Should Be Made Aware Regarding Lawsuit Loans And
Have you ever wondered what benefits there are in obtaining lawsuit loans and settlement loans -
and what benefits they can offer attorneys in representing their clients? Particularly those clients
who have an urgent need for financing and who have exhausted all other avenues?
Unfortunately, the topic of lawsuit loans and settlement loans frequently encounters resistance from
attorneys. This can be particularly frustrating to clients who are need of financing, but are unable to
obtain it. Certainly, their attorneys are not permitted, by law, to assist them with financing their
In this particular article, we'll address five things lawyers should know about the benefits of lawsuit
loans and settlement loans in assisting their clients in obtaining a fair and equitable settlement in
1. It is important to realize that not all forms of lawsuit funding are onerous.
Litigation funding is of relatively recent origin. In many instances, such funding may be obtained at
no cost to the litigant. Remember, these are non-recourse forms of financing. Therefore, if the
plaintiff does not prevail in the underlying claim, there is absolutely nothing to repay.
Additionally, although these forms of financing are referred to as a lawsuit loans and settlement
loans, this is really a misnomer. If they were in fact loans, it would be necessary to repay them,
irrespective of the outcome of the litigation. However, fees will be assessed with respect to the
financing advanced predicated on the amount of risk inherent in a particular claim. Thus, these
forms of financing are more correctly identified as having "risk fees."
Fortunately, this form of financing does not inhibit the trial's outcome. In fact, it increases the
likelihood of a case not having to go to trial. This assumes, of course, that the attorney is
sufficiently apprised of methods by which requisite discovery is obtained to force the defendant to
settle the claim as quickly as possible. (This is just one of the many reasons that a plaintiff needs to
retain a competent attorney – one who specializes in the area of law in which their particular case
2. The "risk-fee" is going to be contingent on the nature of the claim filed. There isn't a great
deal that can be done to adjust this fact. This is not a time to seek a litigation funding source-
based solely on the fees assessed in a particular case.
It is also significant to keep in mind that most of these litigation funding companies are relatively
flexible in dealing with clients. The lenders will be willing to assist their clients in being able to
repay the monies advanced, assuming that it is in the lender's best interest. In many instances, it
would be beneficial to the lender to allow the client a more protracted interval to repay than not to
obtain any payment whatsoever. Additionally, it would be much less expensive than the lender
having to file a suit against its own client.
3. Lawsuit loans and settlement loans are such that an attorney's cooperation is absolutely
No legitimate funding company will advance financing in a lawsuit without first contacting your
attorney. Therefore, it is very important that you cooperate with your attorney and have an attorney
who will cooperate in obtaining this funding as quickly and easily as possible. The attorney's office
will be required to forward requisite documentation to the funding entity. The attorney will also
need to counsel and approve liens that will be assigned against the lawsuit proceeds - in the event
the plaintiff does prevail in the underlying claim.
If you encounter any funding entity that will advance either lawsuit loans or settlement loans
without having your attorney approve of such a transaction, you would be strongly advised to avoid
entering into any arrangements with such an entity.
4. Most plaintiffs are looking to obtain financing very quickly.
The vast majority of instances in which litigation funding is sought have a sense of urgency as one
of their principal components. It would be a rare instance indeed for an attorney who specializes in
Personal Injury cases to have not encountered numerous situations in which their clients have found
themselves in need of such financial assistance.
Attorneys should be aware of the fact that this process actually will assist both the attorney and
client in being able to proceed with requisite discovery, continuing to pursue a fair and equitable
settlement in lieu of accepting some low-ball offer that the defendant will put on the table, thinking
that the plaintiff is unable to continue this fight to a reasonable conclusion.
Your attorney will also be in the best position to assist the funding entity in identifying the strengths
and weaknesses of your case. Keep in mind that those individuals who do advance lawsuit funding
are customarily very knowledgeable in this process. This is also the way in which the process, if the
plaintiff so desires, may be used to put the defendant on notice that the funding entity has reviewed
your claim and they have deemed it worthy of funding. (Keep in mind, however, it is never
necessary to divulge such information to the defendant.)
If you find that your attorney is not willing to cooperate with you in this process, it will be
necessary for you to make a determination as to whether you need to get another attorney or
abandon your hope for obtaining either a lawsuit loan or settlement loan to assist you in pursuing
your claim. This is an impasse that forces you to make a decision.
5. Make no mistake about it, those who provide lawsuit loans and settlement loans are in
business to make money.
If the funding entities from which such financing is obtained are not able to make a profit, they
obviously would not continue to be in the business of providing litigation funding. Additionally, if
they advance funding in a capricious manner, they're not going to be in business for a very long
period of time.
Once again, in the vast majority of instances, you will find individuals who are very knowledgeable
in the process of lawsuit funding when applications are submitted. Individuals who work closely
with brokers are best able to find funding companies that are in a position to help the client in a very
efficient manner. (There are many funding companies that will not provide funding simply because
of the state in which the claim is filed. There are some states in which virtually no lawsuit funding
company will advance litigation funding.)
Learn more about obtaining settlement loans. Stop by our site where you can find out all about the
benefits of obtaining lawsuit loans and what they can do for you.