subject: Are Settlement Loans And Lawsuit Funding More Valuable Than You Realize? [print this page] Clients often express concerns regarding lawsuit funding and settlement loans. I am often intrigued by concerns our clients express regarding lawsuit funding and settlement loans. It is interesting that this form of funding, while increasing in popularity, is an instrument with which most, to include both plaintiffs and attorneys, are unaware. In fact, lawsuit loans are readily available for many classifications of cases. Nevertheless, far fewer are aware of some of the benefits that lie just below the surface.
As discussed in the past, many misconceptions exist regarding interest rates and lawsuit loans. As we indicated in previous articles, there are no interest rates involved in such funding. It is important to bear in mind that they are not loans. Many entities that provide this form of funding include terms related to loans due to the fact that many individuals looking for pre-settlement loans enter the term when searching. However, funding is the appropriate term for related-instruments.
We also encouraged plaintiffs who seek lawsuit funding and/or settlement loans to charge expenses incurred against the defendant. Even though there are no interest rates, risk fees are applied with this form of funding. The amount of risk fee assessed will be contingent on the risks inherent in any given case involving pre-settlement loans.
Virtually all plaintiffs consider their case a "slam dunk" case. However, few cases are a "slam dunk." Illustrative of this is a client who, as a pedestrian, was struck by an automobile. The client proclaimed, "My case is a slam dunk!" Interestingly, the police report revealed the following: (1) the plaintiff was wearing dark clothing; (2) the incident occurred at night; (3) it was raining; (4) the client was walking in the roadway; and (5) the ER report described the client as "drunk." Does that sound like a slam dunk case to you?
Back to the purpose of this article! This article is intended to illustrate that lawsuit funding and/or settlement loans may beneficial in another way. The vast majority of you are familiar with the term "mock juries." Individuals who work as jury-consultants generate millions of dollars working with lawyers to select the most likely venue and jury-pool with which to prevail in a particular lawsuit.
What is the primary purpose of mock juries? Naturally, they are intended to allow both plaintiffs and defendants to observe the strengths, as well as the weaknesses of a particular case, through jurors' eyes. It is significant to be able to garner this information objectively. It is the jurors, with guidance from a judge, who will determine the plaintiff's/defendant's fate if the case is not settled prior to trial. Those who fund lawsuit loans will thoroughly review the elements of the cases submitted for pre-settlement loans. Due to the fact that such funding is non-recourse, if the plaintiff loses his/her their case, the funding-company collects zero.
Once the application is submitted for either lawsuit funding or settlement loans, the application, as well as relevant documents will be reviewed by those who specialize in litigation funding. These experts will analyze the information received and determine if additional information is required. The additional documents required may prove tremendously valuable to the client in making his/her case. An example of required documentation, but one often not made available by individuals seeking pre-settlement loans in breach of contract cases, is the written offer. To succeed, the plaintiff must clearly establish liability. Additionally, the defendant's ability to pay any judgment likely to be awarded must be considered. A judgment of a monetary award is of little value if the plaintiff is unable to collect.
When utilized appropriately, lawsuit loans provide tremendous financial relief for many plaintiffs. However, the value of having individuals with years of experience in reviewing such cases evaluate claims submitted and for which lawsuit funding is sought, is incalculable. Bear in mind, the funding entity is looking for reasons to provide settlement loans.
