The pros and cons of lawsuit funding for plaintiffs

Lawsuit funding, also known as legal financing or settlement funding, is a practice where a third-party provider offers financial assistance to plaintiffs in exchange for a portion of the potential settlement or judgment. This can be a useful option for plaintiffs who are struggling to cover their expenses during the legal process. However, there are both advantages and disadvantages to this type of funding.

Pros:

1. Provides financial relief: One of the most significant advantages of lawsuit funding is that it can provide financial relief to plaintiffs who are struggling to cover their expenses. This can include medical bills, living expenses, and legal fees.
2. No risk: Lawsuit funding is non-recourse, which means that if the plaintiff does not win their case, they are not obligated to repay the funding. This eliminates the risk for plaintiffs, as they do not have to worry about repaying the money if their case is unsuccessful.
3. Faster settlement: If a plaintiff is struggling financially, they may be more likely to settle their case quickly, even if the settlement amount is less than what they deserve. With lawsuit funding, plaintiffs can avoid settling for a lower amount and instead wait for a fair settlement or judgment.
4. No credit check: Lawsuit funding is not based on the plaintiff’s credit history or income. This means that even if a plaintiff has a poor credit history or is unemployed, they may still be eligible for funding.

Cons:

1. High-interest rates: Lawsuit funding providers often charge high-interest rates for their services, which can range from 27% to 60% annually. This means that plaintiffs may end up owing more than they receive from the settlement or judgment.
2. Limited regulation: Lawsuit funding is not heavily regulated in most states, which means that plaintiffs may be at risk of working with unscrupulous providers. It is important for plaintiffs to do their research and choose a reputable provider.
3. Limited availability: Lawsuit funding is not available for all types of cases. Some providers may only work with cases that have a high likelihood of success, which means that some plaintiffs may not be eligible for funding.
4. Potential conflicts of interest: Because the funding provider will receive a portion of the settlement or judgment, they may have a vested interest in the outcome of the case. This could potentially create a conflict of interest and affect the plaintiff’s legal strategy.

It is important for plaintiffs to carefully review the terms and conditions of the funding agreement, including the interest rates and fees, repayment terms, and any other conditions or restrictions. It is also advisable for plaintiffs to consult with their attorney before pursuing lawsuit funding, as the attorney may have recommendations for reputable providers and can help ensure that the funding agreement is in the plaintiff’s best interest.

Another potential disadvantage of lawsuit funding is that it can create a perception of weakness or desperation on the part of the plaintiff. Insurance companies and defense attorneys may use the fact that the plaintiff has sought funding as a way to argue that they are not confident in their case, or that they are in dire financial straits and therefore more likely to settle for a lower amount. This can potentially impact the outcome of the case and the amount of the settlement or judgment.

At Fast Funds, we understand the pros and cons of lawsuit funding for plaintiffs and are committed to providing fair and transparent funding options. We can help provide financial relief to plaintiffs who are struggling during their legal case, covering living expenses, medical bills, and legal fees. Our non-recourse funding also eliminates the risk for plaintiffs, as they are not obligated to repay the funding if their case is unsuccessful.

While we do charge interest on our funding, we offer competitive rates and work with each client to ensure that the terms are fair and transparent. Additionally, we do not interfere with the plaintiff’s legal strategy and our funding is not contingent on the outcome of the case, helping to avoid potential conflicts of interest.

Fast Funds may only work with cases that have a high likelihood of success, but we are always willing to discuss potential funding options with clients and provide guidance on other resources that may be available. We are committed to operating ethically and transparently, and we encourage plaintiffs to do their research and choose a reputable provider when considering lawsuit funding.

At Fast Funds, we are dedicated to helping plaintiffs receive the financial support they need to pursue justice and receive a fair settlement or judgment. Our goal is to provide clear and understandable funding terms and work with each client to ensure their individual needs are met.