Funding Terms

Demystifying Lawsuit Funding: An In-Depth Guide

Posted on by Fast Funds
Understanding Lawsuit Funding A Comprehensive Guide
25
Jul

Navigating the legal system can be a complex and time-consuming process, especially for individuals involved in personal injury lawsuits. Lawsuit funding, also known as pre-settlement funding or litigation financing, offers a financial lifeline to plaintiffs awaiting the resolution of their cases. This comprehensive guide aims to elucidate the concept of lawsuit funding, explaining its mechanics and providing a step-by-step breakdown of how it works. By understanding the intricacies of this financial tool, plaintiffs can make informed decisions to alleviate financial stress while pursuing justice.

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The Concept of Lawsuit Funding

Lawsuit funding is a financial service designed to provide plaintiffs with cash advances against the expected settlement or judgment of their lawsuits. Unlike traditional loans, lawsuit funding is non-recourse, meaning the plaintiff is not obligated to repay the advance if they lose their case. This unique feature makes it an attractive option for those facing financial hardships during lengthy legal battles. The primary objective of lawsuit funding is to level the playing field between plaintiffs and defendants, often large corporations or insurance companies with significant financial resources. By securing funds in advance, plaintiffs can cover essential living expenses and medical bills without the pressure to accept low settlement offers due to financial desperation.

Eligibility for Lawsuit Funding

To qualify for lawsuit funding, plaintiffs must meet certain criteria. First and foremost, they must have a valid lawsuit with strong merits. Funding companies typically work with personal injury cases, such as car accidents, slip and fall incidents, medical malpractice, and product liability claims. Additionally, plaintiffs must be represented by an attorney on a contingency fee basis, meaning the attorney only gets paid if the case is successful. This arrangement aligns the interests of both the plaintiff and the attorney, ensuring that the case is handled diligently and with the aim of securing the maximum possible settlement. The funding company will evaluate the details of the case, including liability, damages, and the likelihood of a favorable outcome, before approving the funding request.

The Application Process

The application process for lawsuit funding is straightforward and typically involves a few key steps. Initially, the plaintiff contacts a reputable funding company and provides basic information about their case. This information includes details about the incident, the nature of the injuries sustained, and the expected duration of the legal process. The funding company then collaborates with the plaintiff’s attorney to gather additional documentation, such as medical records, accident reports, and legal filings, to assess the strength of the case. This collaborative approach ensures that the funding company has a comprehensive understanding of the case’s merits and potential value.

Once the necessary information is gathered, the funding company conducts a thorough evaluation of the case. This evaluation process involves reviewing the evidence, analyzing the legal arguments, and assessing the potential settlement amount. Based on this analysis, the funding company determines the amount of funding it can provide to the plaintiff. The funding amount typically ranges from a few thousand dollars to hundreds of thousands, depending on the specifics of the case and the anticipated settlement value. The plaintiff is then presented with a funding agreement that outlines the terms and conditions of the advance, including the amount to be funded, the repayment terms, and any applicable fees.

- WHAT CLIENTS ARE SAYING -

In June, my wife and I asked our attorney about giving us a loan against any settlement proceeds from our case. He told us that the state bar does not
permit lawyers to participate in the financing of clients. The offer of settlement was very low so the case needed to be filed in court. I called Fast Funds. Within 24 hours, I had entered into an agreement with them, selling a very small portion of the anticipated proceeds to them in exchange for immediate financing. Now my suit is in court and I don't have to worry about money until it's outcome. Thank god for Fast Funds
B.G.
As a result of the advances you have made to our client, we were able to refuse an extremely low settlement offer and take the case to court. We settled the day of the trial for a very generous sum. Had there been no advances by Fast Funds, our client would have had no choice but to accept the inadequate offer since he was in severe debt due to his inability to work. Thank you for your helpful assistance in providing our client with the ability to persevere.
C.F.
I was involved in an accident which took my left leg. I was forced to live homeless for eleven months. Thanks to the Fast Funds people advancing money. I now live in an apartment,I am walking on a prosthetic and otherwise getting my life back together, even though my attorney has not yet settled my lawsuit. I don't know what I would have done for money because the insurance company has offered nothing so far.
A.R.S.
I was involved in an auto accident which caused me to suffer a herniated disc. Because of this injury, I was forced to miss many months of work. I had no income and no place or person to turn to for money. My attorney told me he was unable to help with any financing and the insurance company was refusing to settle the case. I turned to a company called Fast funds. They immediately reviewed my file and took the financial pressure off by providing me with interim financing. I am now able to wait for as long as it takes for my lawyer to achieve a successful result in my case. Without the financial involvement of Fast Funds, I don't know what I would have done.
K.P.
I wanted to thank you for your sensitivity in helping me cope through a very difficult time in my life. Without your help, I would have been unable to pay my rent , forcing my wife and children to be put on the street. I have not been able to return to work and I was tempted to accept the insurance company's very low offer to settle, even though I knew it was not fair or reasonable. You have given me the ability to withstand the financial pressures. Thanks for your help. I will never forget it
C.S.
I have in the past referred clients to Fast Funds Inc., a non-recourse company. The experience of my clients
and my firm were totally positive. Fast Funds was responsive to the clients financial and emotional needs, provided the necessary emergency money and did not interfere in any manner with my handling of the cases. The clients, without my input, negotiated the advance directly with the company. In each case, they were completely satisfied with the final result of the case, including the amount of profit earned by Fast Funds. Non-recourse funding is clearly a valuable tool to the plaintiff's attorney.
M.J.L.
"I am writing to recommend the valuable assistance of the Fast Funds Inc., a company that provided interim funding to financially needy clients. They help to insure that a case will be brought to a successful resolution. A good case in point is when I was offered $75,000.00 for a seriously injured client. Had she not been able to take advantage of the advance financing offered by Fast Funds, I would have been forced to take the money. As it turned out, because my client now had the financial ability to withstand the pressures of time, I tried the case to a jury and received a verdict of $315,000.00.
M.S.D.
It is my belief that non-recourse companies, such as Fast Funds, the company to whom I refer my needy clients, perform an invaluable service to both the client and the attorney. Simply put, it is common knowledge that one of the tools negotiation utilized by insurance companies is time. Offering
considerably less money than the actual case value to a client in desperate need of funds while the case is pending, gives the insurance companies a tremendous advantage. This advantage is minimized and the playing field is leveled when the client has the ability to obtain funds for a minimal portion of the anticipated proceeds. Many times, with no prospects of income, an injured party will settle the case for whatever offer is made.
R.J.F.

Approval and Funding

Once the plaintiff agrees to the terms of the funding agreement, the approval process is finalized, and the funds are disbursed. The speed of this process can vary, but in many cases, plaintiffs receive their funds within a few days. The funds can be used at the plaintiff’s discretion, providing immediate relief for pressing financial needs such as medical bills, rent or mortgage payments, utility bills, and daily living expenses. This financial support allows plaintiffs to focus on their recovery and the progression of their legal case without the constant worry of financial instability.

Repayment and Settlement

Repayment of the lawsuit funding occurs once the case is resolved through a settlement or a court judgment. If the plaintiff wins the case or reaches a settlement, the funding company is repaid from the proceeds of the settlement. The repayment amount includes the principal advance, along with any agreed-upon fees or interest. It is important to note that lawsuit funding is typically structured as non-recourse, meaning that if the plaintiff loses the case, they are not obligated to repay the advance. This non-recourse nature ensures that plaintiffs are not burdened with debt in the event of an unfavorable outcome.

The repayment amount is generally determined by the terms outlined in the funding agreement. Funding companies charge fees or interest rates based on the amount of the advance and the duration of the legal process. These fees can vary widely, so it is crucial for plaintiffs to carefully review and understand the terms before accepting the funding. Transparent communication with the funding company and the plaintiff’s attorney is essential to ensure that all parties are aware of the financial implications and the repayment process.

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Applying For Lawsuit Funding

Types of Cases We Fund

Benefits of Lawsuit Funding

Lawsuit funding offers several significant benefits to plaintiffs facing financial hardships during their legal battles. One of the primary advantages is the immediate access to funds, which can alleviate the stress of mounting medical bills, living expenses, and other financial obligations. By securing funding, plaintiffs can avoid the pressure to settle their cases prematurely for less than they deserve. This financial stability allows plaintiffs to pursue their cases more effectively, giving their attorneys the time and resources needed to build a strong case and negotiate a fair settlement.

Another benefit of lawsuit funding is the ability to level the playing field between plaintiffs and defendants. Defendants — often large corporations or insurance companies — may have significant financial resources and can afford to prolong legal proceedings in the hopes of pressuring plaintiffs into accepting lower settlements. Lawsuit funding empowers plaintiffs by providing the financial support needed to withstand these tactics and pursue their cases to a favorable conclusion. This support can be especially crucial in complex cases that require extensive legal and medical documentation, testimony, and other resources.

Considerations and Risks

While lawsuit funding can be a valuable financial tool, it is essential for plaintiffs to carefully consider the associated costs and risks. Funding companies charge fees or interest rates that can vary significantly, and these costs can impact the final amount received by the plaintiff once the case is settled. Plaintiffs should work closely with their attorneys to evaluate the terms of the funding agreement and ensure that they fully understand the financial implications. Additionally, plaintiffs should consider alternative sources of funding, such as personal savings, loans from family or friends, or other financial resources, before opting for lawsuit funding.

Another consideration is the potential impact of lawsuit funding on settlement negotiations. Defendants may be aware that plaintiffs have received funding and may attempt to use this information to their advantage during settlement discussions. Plaintiffs and their attorneys should be prepared to address this issue and negotiate from a position of strength, emphasizing the merits of the case and the anticipated settlement value. Transparent communication with the funding company and a clear understanding of the repayment terms are essential to ensure that all parties are aligned and working towards the best possible outcome.

Choosing the Right Funding Company

Selecting a reputable and trustworthy funding company is crucial for plaintiffs considering lawsuit funding. Plaintiffs should research funding companies thoroughly, seeking recommendations from their attorneys and reading reviews from other plaintiffs who have used their services. A reliable funding company will provide transparent information about its terms, fees, and approval process, ensuring that plaintiffs fully understand the financial implications of the funding. Plaintiffs should also consider the company’s track record and experience in handling cases similar to theirs, as well as its commitment to ethical practices and customer service.

Open communication with the funding company is essential throughout the process. Plaintiffs should feel comfortable asking questions and seeking clarification on any aspects of the funding agreement. A reputable funding company will be responsive and supportive, providing clear and concise information to help plaintiffs make informed decisions. Plaintiffs should also ensure that their attorneys are involved in the process and are aware of the funding terms, as this collaboration can help ensure that the funding is used effectively and that the case progresses smoothly.

Legal and Ethical Considerations

Lawsuit funding is a regulated industry, and plaintiffs should be aware of the legal and ethical considerations involved. Funding companies must comply with state and federal regulations governing their operations, including transparency requirements and restrictions on fees and interest rates. Plaintiffs should ensure that the funding company they choose operates in compliance with these regulations and adheres to ethical practices. Working with a reputable funding company and consulting with their attorneys can help plaintiffs navigate the legal and ethical landscape of lawsuit funding and ensure that their interests are protected.

Plaintiffs should also be aware of any potential conflicts of interest that may arise from the involvement of third-party funding. Attorneys have a fiduciary duty to act in the best interests of their clients, and this duty extends to advising on lawsuit funding. Plaintiffs should discuss the funding options with their attorneys and ensure that the funding arrangement aligns with their legal strategy and financial needs. Open and honest communication with the attorney and the funding company is essential to ensure that all parties are working towards the best possible outcome for the plaintiff.

Contact Fast Funds Today

If you are a plaintiff facing financial challenges while pursuing a personal injury lawsuit, lawsuit funding can provide the support you need to navigate the legal process without compromising your financial stability. At Fast Funds, we understand the stress and uncertainty that can accompany a prolonged legal battle, and we are committed to providing transparent, ethical, and reliable funding solutions to help you secure the justice you deserve. 

Our team works closely with your attorney to evaluate your case and provide the financial support you need to cover essential expenses and focus on your recovery. Contact Fast Funds today to learn more about how lawsuit funding can benefit you — and take the first step towards securing the financial stability you need during this challenging time.