Everything to Know about Litigation Financing.
There are two sides to each story but the fact is both the two parties that are involved in a lawsuit hopes that the case goes their way. Litigation funding or financing is a practice where a third party not involved in the lawsuit provides funds to the plaintiff involved in litigation. The merit of your case is the factor that will determine whether you will have the lawsuit financing you need or not because the person funding you needs to know he will have his money back.
Lawsuit financing is no loan hence the need for the lawsuit funding company to look into the case itself before any steps are taken. It is simply an assignment of the portion of the client or attorney’s interest in anticipated recovery of the client. This is to clearly mean that if a case is lost the money that the lawsuit financing had offered gets lost as well. When it comes to a case being financed, some may question on the ethical nature of a lawyer referring a client to a lawsuit financing party.
Yes it is ethical if a lawyer refers a client to a lawsuit financing company provided they have no interest in the financing company. It has to be established also that the attorney handling the case will not in any way profit from the transaction. There will be a conflict of interest if the lawsuit company is involved in the lawsuit so the company that has been approached by the client should not be involved in any way. There are benefits that come with clients being refereed to litigation finance companies . If a client gets to secure financing from a source that they had not anticipated , it will definitely ease the burden. The decision to approach a financing company means that probably the client might be in a financially tight position. To secure pre-settlement advance, you have to undergo a process but it’s not complicated. Litigation companies will require you to fill some application to help them evaluate the case at hand.
The litigation funding company will weigh the merits of the case and if any questions arise, the attorney representing the company will be called upon to answer the questions. The decision on whether the case will receive some funding is made within 24 to 48 hours of receiving the documents of the case. Should the case be accepted , the attorney will forward a contract to the lawyer representing the case outlining terms and conditions and how they will receive money from the company. In other cases some litigation financing is done on already settled cases. Medicare solutions, distribution protocols or court order approval among other reasons may occasion the need for post settlement advances.