Post-Settlement Funding for PlaintiffsFebruary 27, 2013
Resolution of a catastrophic personal injury, class action, mass tort, qui tam or Federal Employers Liability Act (FELA) matter often takes several years to achieve. Clients face daunting challenges during this time: physical injury, emotional strain, disability, and/or difficulty meeting financial obligations are common struggles. What many plaintiffs don’t realize is that even after they have prevailed either through trial or settlement, they will often wait anywhere from three to six months to receive compensation. Should a defendant appeal a verdict, the wait could be even longer. As bills mount, that wait can seem like an eternity. Post settlement funding, also known as postsettlement funding or cash for settlement, can provide a welcome lifeline to litigants teetering on the brink of financial crisis.
Like its counterpart pre-settlement funding, post-settlement funding offers non-recourse financing for plaintiffs. After a plaintiff has prevailed either at trial or through settlement, a settlement funding company will provide immediate cash for an interest in the plaintiff’s future settlement payments.
Because post-settlement funding is a form of no-risk financing, plaintiffs who take advantage of settlement financing also benefit by shifting the risk of nonpayment to a settlement financing company, such as USClaims. Should the defendant fail to pay, the plaintiff will owe nothing. In other words, in the absence of a recovery, the financing company loses its investment. The company cannot seek repayment from either the client or the client’s attorney. The funding company will only be paid when the verdict or settlement is paid, with payment coming directly from the proceeds of the case. In the meantime, the client is free to spend the settlement funding on whatever they wish, from mortgage payments to college tuition to a new business venture.
Post-settlement funding is available to approved applicants in a variety of cases:
• Personal injury, including auto accidents, premises liability, slip and fall, medical malpractice and others
• Catastrophic personal injury
• Class action
• Mass tort
• Qui tam (whistleblower)
• Federal Employers Liability Act (FELA)
• Prevailing plaintiffs whose verdicts have been appealed
Litigants should also be aware that postsettlement funding is typically less costly than presettlement funding, as a verdict or settlement has already been reached, thereby reducing the element of risk to the funding company.