Lawsuit Financing Myth: Lawsuit Financing Takes Advantage of Litigants’ MisfortunesMarch 4, 2013
Once viewed with skepticism, lawsuit financing has been steadily gaining acceptance among plaintiffs’ lawyers. By keeping plaintiffs financially secure during protracted litigation, settlement funding enables attorneys to diligently fight for a fair outcome and maximum recovery. Unfortunately, misconceptions still abound when it comes to this relative newcomer to the legal services industry.
Often, plaintiffs facing protracted litigation find themselves between a rock and a hard place financially. They cannot work, but the costs of basic necessities remain unchanged. As a result of such financial duress, a plaintiff may feel compelled to settle for less than their case is worth.
Pre-settlement funding enables the plaintiff’s attorney to pursue maximum recovery despite lengthy litigation by providing no-risk, non-recourse financial assistance to relieve financial hardship. A funding recipient may use a lawsuit advance to meet a variety of needs, from housing, meals and clothing, to medical care, school tuition or a new business venture. The financing provider only recoups the money advanced if the plaintiff prevails in securing a settlement or damages award. Should the defendant prevail, the financing company may not seek repayment from either the plaintiff or the plaintiff’s attorney.