subject: Lawsuit Funders Need Due Diligence [print this page] Some kinds of lawsuits can be funded by Lawsuit Funding Companies (LFCs). LFCs can help plaintiffs, but only if it makes financial sense for the LFC. When the plaintiff needs $1,000 for their lawsuit, funding usually comes quickly. If the plaintiff needs $35,000, funding delays depend on careful, successful, and lengthy due diligence by the LFC.
From a WWW search, you get the impression that you can get money for funding your lawsuit as quickly as one to three days. While this does occasionally happen, it's much more likely to take three to twelve weeks.
Presuming you qualify to have a Lawsuit Funding Company (LFC) fund your lawsuit, the speed at which this happens depends on your paperwork, your lawyer, your debtor, and the complexity of your case.
When you sue someone, there is a staggering amount of paperwork generated and research gathered. When you hope to get funding from a LFC, you must again deal with this paperwork.
Some LFC web sites have online forms, so you can "instantly" submit your application. They hint that action (money coming to your door) can happen in 24-72 hours.
Less than one time in a hundred will this really happen within 72 hours. In many cases, if all parties are ready, and cooperate quickly, a plaintiff can know if they qualify for money within a week. Actually getting the money comes later.
Because funding lawsuits has risks, LFCs must perform their due diligence. The LFC must know the nature of the case, where the case has been filed, damages sought, the expenses the plaintiff has incurred, etc.
Any plaintiff wanting their lawsuit funded needs to be aware of how much documentation is required before any payoff can happen. The delays in getting a lawsuit funded often depend on the time it takes for the plaintiff to supply the required documentation.
Most LFCs prefer to fund contingency-based cases. They usually do not like to fund (non-recourse) cases for only attorney fees and litigation costs. They prefer necessities of life funding for plaintiffs. The reason is, if the attorney wants their fee or costs "up front", it can mean the quality of the case might be questionable.
All parties should be "hungry" for a settlement. LFCs reduce a client's hunger to settle too early for too little, which costs both the client and attorney money.
When finding a LFC, do not believe the "instant" funding pitch. Most Lawsuit Funding Companies offer the same product. It makes little sense to talk with every LFC you can find on a web search. Look for the LFC's reputation, length of time in the business, and customer service.
