Post-settlement Funding: Who qualifies?May 28, 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. Post settlement funding, also known as post-settlement funding or cash for settlement, provides non-recourse financing for plaintiffs. After a qualified 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.
To qualify for post-settlement funding, an applicant must have a settled claim – meaning the litigation has resolved and the applicant has agreed to release all claims – and be represented by a lawyer on a contingency fee basis. The defendant (the alleged at-fault party) must be an insured party. While types of claims funded vary according to the settlement financing provider, USClaims prefers to fund the following types of cases:
- Personal Injury
- Catastrophic Personal Injury
- Class Action
- Mass Tort
- Qui Tam / Whistleblower
- Federal Employers Liability Act (FELA)
USClaims is pleased to offer its already competitively priced services at a reduced rate for settled cases.
Typically, this is how post settlement funding works: A plaintiff applies to a settlement financing company such as USClaims. The financing company’s representative reviews the application and if approved, sends a purchase agreement to the applicant. The purchase agreement provides for the cash purchase of an interest in the proceeds of the applicant’s case. The financing company is not paid unless and until the plaintiff receives the settlement proceeds. At that time, repayment will come directly from the proceeds of the case. The rate of repayment will be detailed in the purchase agreement, and the purchase agreement will clearly state that if the case brings no recovery, there is no obligation to the financing company (unless the applicant has provided the company with false information, committed fraud, or otherwise breached the purchase agreement).
We encourage you to browse our website, including our blog and FAQs, for more information on postsettlement and other lawsuit funding.