subject: Legal Financing Revolves Around The Merits Of A Case [print this page] In the legal finance industry, underwriting a lawsuit is a complicated process. Whether or not a plaintiff can receive an advance before a civil case concludes usually revolves around the likely outcome of the lawsuit. When money is lent to a client, it does not have to be paid back if the plaintiff does not win the case. This is why it is so crucial for those lending money to carefully research the lawsuit.
Advance
Technically, this is not a loan. It is an advance. Litigation finance companies want to make sure, whenever possible, that they are making a good investment in the case. The plaintiff in a lawsuit agrees to take cash in advance of a positive outcome in the suit. The person is basically selling off a portion of the proceeds of the case. One of the key issues about legal funding is whether the case has merit. This is decided by a number of factors.
Types
Every case is different. Those types that are most likely for the plaintiff to recover include auto accidents, slip-and-fall cases, wrongful death suits, workmen's compensation, Federal Employers' Liability Act (FELA) railroad cases, Jones Act, medical malpractice and legal malpractice.
These usually include someone getting hurt either on the job or due to another person's negligence. They are referred to as personal injury cases. When insurance companies are involved, it is easier to determine what the probable outcome of a case will be or whether it will settle before going to trial.
Settlement
For a personal injury case to have merit and therefore be eligible for a lawsuit cash advance, there are three factors that must be present. They are liability, coverage and damages. Liability means that the defendant must have some responsibility for the injury by either doing something wrong or not doing something they should have done. Coverage refers to the defendant having insurance coverage or an underwriter available to pay out the amount owed if the plaintiff wins the case. Damages are the monetary restitution paid out to the plaintiff if they win or settle the legal claim.
For cases where there is an agency involved, such as workers' compensation or the federal government, things are more complicated. It takes longer for legal funding companies to go through all of the rules, regulations and facts of the case. Since they must be careful about who they give financing to, it takes a lot of careful research and understanding before they can make a decision.
Once it is determined that a plaintiff is eligible for a cash advance, things move pretty quickly and the person usually receives their money within a few days.
