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1. What is Lawsuit Funding and How Should You Use it?

Every plaintiff who considers receiving lawsuit funding should know some basic facts before applying. Many plaintiffs accept lawsuit funding as the answer to their current bill problems with really understanding what lawsuit funding is and how a non-recourse lawsuit funding transaction works. At Lawsuit Financial, we constantly find ourselves answering questions that aren’t asked. We spend significant time and energy protecting desperate plaintiffs from themselves. Often, they just want the money and don’t consider the cost or the consequences. Our professional and para-professional staff will not permit any plaintiff to receive a non-recourse cash advance without understanding the transaction, its impact on his/her financial situation, and its impact on the case that is the subject of the funding. This post is intended to provide the practical information that we provide to every client we talk to, to all prospective recipients and their attorneys, whether they are considering Lawsuit Financial, or some other provider of a similar service.

2. Does Lawsuit Funding Finance "Cases" or "People"?

A common misconception is that lawsuit funding is strictly a need-based funding program. If a person needs this much money or that much money, that is what the plaintiff applies for. At Lawsuit Financial, we certainly do our best to accommodate and fill the needs of the applicant. However, we fund cases, not people; these transactions are not "loans", rather they are non-recourse advances, provided against the merits of a lawsuit. Hopefully, the lawsuit has enough potential value to satisfy the plaintiff’s "need", but if it does not have that value, funding will not completely fill the need. Further, the lawsuit funding company must see at least a good possibility that their will be a positive outcome in the case. Lawsuit funding companies take the risk of winning and/or losing the lawsuit, just like plaintiffs and attorneys do, so case quality and value is an important consideration when providing lawsuit funding. The hope is that there will be enough proceeds at the end of the case to pay the attorney and the case costs, pay the lawsuit funding company its money back, with contractual profit, and return sufficient case value to the plaintiff. If proceeds are not sufficient, then the lawsuit funding company should be willing to offer a reasonably compromise so that the plaintiff receives his/her fair share of the settlement or verdict. Most lawsuit funding companies will not promise a compromise for poor case results; if your chosen company will not make such a promise, find one who will. If funding is provided appropriately and strategically, case value will increase, because the financial need to settle early and inexpensively will be eliminated.

In essence, then, lawsuit funding companies invest in litigation; lawsuit funding companies do not "loan" money to the needy plaintiff. As such, no credit, poor credit, prior bankruptcy status does not matter in negotiating these transactions. While many of our competitors use terms like "lawsuit loans", "litigation funding", "litigation loans", "lawsuit finance", "lawsuit cash advances", "case loans", "case cash advances, "plaintiff cash advances", "pre-settlement loans", "pre-settlement funding" or "pre-settlement cash advances", these transactions are, in reality, investment agreements. The lawsuit funding company is taking an investment interest in your case

3. How does the Lawsuit Funding Company Get Paid?

Lawsuit funding companies get paid by charging "investment profit" if their investments into cases merit those profits. There are many lawsuit funding companies; there are many different methods and formulas for lawsuit funding compensation. First, we must agree that a lawsuit funding company takes significant risk by funding cases that may or not be successful. Those cases are often funded for plaintiffs and attorneys that we have never met. The investment is only as good as the case. Even if a case starts out looking "good", litigation is a strange animal and things can take a quick turn for the worse. Lawsuit Financial has more combined legal and legal funding experience than almost anyone else in the lawsuit funding industry; almost any result is possible in litigation; once good cases can suddenly be worthless. Because of a substantial risk of loss, lawsuit funding profits tend to be on the high side. Simply, profits on case wins must offset losses on case failures for a lawsuit funding company to be profitable. And, consider that the lawsuit funding company has absolutely no control over the handling of the case, including a decision to dismiss a previously funded case. These are, indeed, risky investments.

4. Do Lawsuit Funding Companies Charge Additional Fees or Costs?

Lawsuit Financial does not charge any additional fees of any kind. However, industry wide and generally speaking, most other companies do charge additional fees and costs. Why? Because they wish to make their core investment fees appear lower; they make up for these "lower’ fees by charging a bunch of "junk" additional fees. Caveat emptor: Buyer beware! Examples are underwriting fees, broker fees, application fees, origination fees, document preparation fees, delivery fees, premature repayment penalties, and others. Most of the time, these additional fees are not immediately disclosed; ask questions about additional fees before accepting someone’s "lower" offer.

5. Is There an Appropriate Strategy for the Use of Lawsuit Funding?

Strategic lawsuit funding, lawsuit funding used correctly, is an amount that takes care of your short term financial problems so that you don’t have to settle your case early and cheap. We don’t "buy cases"; we do try to keep you going so that your attorney has the time he/she needs to get you to best possible result in your case. Often, our funding pays for itself by the extra settlement or verdict money we made possible by giving the plaintiff, additional financial staying power. Lawsuit Financial calls this the "win-win-win scenario. Improved litigation results benefits the plaintiff, the attorney and the lawsuit funding company: win-win-win. With most companies, lawsuit funding investment profit increases with the passage of time; so, to save money and to achieve a result that creates the win-win-win scenario, it is best to receive lawsuit funding as late in the legal process as possible.

6. Final Thoughts: Are there Different Levels of Experience Between the Various Companies?

Lawsuit Funding is a relatively new concept, but it has experienced growth. As previously stated, Lawsuit Financial is one of the most experienced legal and legal finance companies in the market place. Every day, someone’s son or brother, a former real estate, mortgage or stock broker, a financial services professional decides that he/she has what it takes to invest in litigation and become a lawsuit funding company or broker. They do not have what it takes; their inexperience can hurt you and your case. As the plaintiff, the owner of a potentially valuable piece of litigation, you should understand lawsuit funding; Lawsuit Financial provides free telephone and/or Internet advice to all who inquire about lawsuit funding services. Don’t proceed blindly, without inquiry; it will usually cost you dearly.

Happy New Year; we at Lawsuit Financial certainly hope it is one of good health, prosperity and peace for all of our clients, attorneys and readers.

One Comment

  1. Gravatar for William

    Fast us at 1-866-738-3817 or visit us online at We provide advances on many types of injury cases. In most cases we have clients funded within 24 hours. If you have been seriously injured by the negligence of another, have an attorney and cannot wait for the resolution of your pending claim to pay your bills, then call us today. Even if you're not sure if you qualify, call's free to apply. In fact, we have no up-front cost at all and we do not charge interest!!!!

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