Financing A Lawsuit
Lawsuit funding provides monetary help when a person looks for legal solution in a court of
law, and does not have the funds to endure the expenditure. The expenses covered by
lawsuit financing companies include attorney fees, medical bills, health care, rent and
mortgage, food etc. Cases funded by lawsuit firms consist of personal injury, workers
compensation, motor vehicle accidental injury, wrongful death, medical malpractice, product
liability, breach of contract, fraud and others.
Nevertheless, this should not be taken wrongly for as a loan, since it is non-recourse. That
is, the customer doesn't have to repay the amount if he or she loses the lawsuit. The risk is
undertaken completely by the companies. A loan, on the other hand, usually has a definite
payback schedule within a preset period. As there is no way of figuring out how long a case
will go, there is no rigid schedule of repayment followed by lawsuit funding companies.
These companies usually lookout for cases that have a strong chance of winning, so as to
reduce the danger of losing money. They have an in-house attorney who studies cases, and
determines which of those are much more likely to win. Eventually, they fix the amount that
is to be offered to the client, in accordance to his or her needs.
There are basically three kinds of funding:
1. Pre-settlement funding:
Companies supply funds before the verdict is declared. These are usually provided when
the client, due to some injury or some other reason, cannot work and earn money to pay the
fees. If nevertheless, the verdict goes against the client, the company doesn't retrieve the
2. Post-settlement funding:
Firms provide money definitely after the lawsuit is settled. In such cases, however, they do
permit partial advances.
3. Attorney Loans:
The firms directly supply the attorney a long-term credit that will take care of all the
Nevertheless, before accepting help from such companies, it would be prudent to consider
the terms of repayment, and choices available. The terms consist of the flat fee and the
recurring fee. One should make an exploratory survey of different companies, and choose
the one that's the most suitable.