These articles are intended to educate the reader on the pre-settlement loan industry.  In previous posts, we discussed the administrative tasks needed to offer lawsuit loans to plaintiffs who need cash while they wait for their case to settle.  This post will discuss money management as it relates to the lawsuit cash advance funding industry. Read more »

In a report published recently by the National Association of Mutual Insurance Companies, the lawsuit funding industry was blamed for rising insurance premiums.  As absurd as this may seem, never underestimate the lengths insurers will go to excuse premium increases.  For example, read the excerpt below,

“It stands to reason that third-party funding will increase the volume of litigation, and will especially encourage the filing of frivolous and ‘nuisance’ lawsuits,” said Robert Detlefsen, Ph.D., NAMIC’s vice president of public policy. “This will increase insurers’ litigation defense costs, which will ultimately cause premiums to rise.”

In his report, Dr. Detlefsen accomplishes little more than simply offering opinion as fact.  The original report can be viewed here. Read more »

Recently, I was asked what benefits a lawsuit funding company can offer attorneys who represent clients in need of pre settlement loans.  That is, clients who have an immediate need for cash but who have already exhausted or otherwise do not have other avenues of cash currently available to them.

Lawsuit funding companies sometimes meet resistance from law firms when their clients apply for a cash advance.  The reasons are many but usually revolve around a negative stigma attached to the litigation finance industry with regard to price AND the idea that counseling clients with regard to financial transactions is usually outside the scope of representation originally agreed upon by the attorney and client.

Below I address the top 5 things attorneys should know about the lawsuit cash advance business in an effort to address some of these concerns.

Read more »

The lawsuit loan is a financial transaction wherein a company advances money to an individual involved in a civil lawsuit but who is still waiting for the matter to be concluded.  In other words, the plaintiff gets money now and he/she assigns a portion of the case’s ultimate recovery.  The lawsuit funding business arose out of an ever increasing need for immediate cash to meet the pressing financial obligations many plaintiffs were facing.

The most common example is a plaintiff who is injured, due to the negligence of another, and whose injuries prevent him from financially supporting himself.  With nowhere else to turn for funds (many typical lawsuit funding clients have poor credit or would otherwise not qualify for a personal loan), pre settlement loan companies offered relief to these individuals.

According to an article entitled, “Regulation of ‘lawsuit funding’ industry faces uncertain future in Senate” originally published here, the Kentucky Legislature passed a bill through the State Senate in an effort to regulate the “lawsuit funding” business.

This is not the first attempt by state legislatures to consider regulating the pre settlement loan industry.  And ultimately, some sort of legislation may actually be passed.  This post will consider the costs associated with potential regulation and what possible consequences, intended or otherwise, could arise from this interference in the free market. Read more »

MANASQUAN, N.J., March 7, 2011 /PRNewswire/ — Fair Rate Funding, a lawsuit funding company located in New Jersey, recently acquired the ability to fund cases in the State of Missouri thereby offering relief to those claimants who have a pending lawsuit but are encountering immediate financial difficulty.

Until recently, lawsuit financing, also known as pre-settlement loans, was unavailable for various reasons relative to applicable laws and their interpretation in that jurisdiction.  Fair Rate Funding is pleased to announce its intention to facilitate lawsuit funding deals in Missouri for personal injury cases including motor vehicle accidents, slip and falls, medical and legal malpractice, products liability and worker’s compensation.  All other cases are considered on a case by case basis. Read more »

Recently, I was asked what benefits a lawsuit funding company can offer attorneys who represent clients in need of litigation capital or a pre settlement loan.  That is, clients who have an immediate need for cash but who have already exhausted other avenues of money or otherwise do not have the ability to obtain cash for bills, medical treatment, debts, shelter, cars, etc.

This article will address this issue in further detail since it really can make a difference for the client in desperate need of funds. Read more »

In our last article, we discussed some of the basic business expenditures involved with providing lawsuit funding for those individuals who need cash but cannot wait until their lawsuit is settled.  Costs such as salaries, IT, legal counsel, etc. are all factored into the “cost” of pre settlement cash advance funding.

While all of the above are obviously necessary components of the lawsuit loan business, one of the most important aspects of the business is the compilation and analysis of paperwork.  This post will explore what we call “chasing the paper” as part of the litigation advance business. Read more »

In previous articles, we explore some of the most common nuances in the pre-settlement loan or legal funding business.  Because of the relative infancy of this business compared to others in the financial services industry, lawsuit funding is often misunderstood.  This post attempts to shed some light on litigation cash advances for cases as a business and outlines a few common expenses.  The goal is to help the reader better understand what goes into a lawsuit funding operation and thus feel more comfortable if the reader should utilize these services in the future.  Lawyers and clients alike would be better served by a more informed perspective. Read more »

A lawsuit funding transaction is the selling of part of the future proceeds expected from a pending litigation.  The plaintiff  in the lawsuit effectively transfers by contract a portion of the case once it is successful.  Part of the transaction is the agreement that the contract will be placed in the file as a “lien” against the future settlement.  In other words, the property must be repaid, with costs, to the rightful owner BEFORE the plaintiff receives any of the settlement.

A lawsuit loan is only one potential lien which may exist in any given file.  Below we discuss some common examples of liens contained in litigation files. Read more »

The answer to the above lawsuit funding question comes up a great deal in day to day business in the litigation financing industry.  More goes into underwriting a lawsuit loan or cash advance than most people realize.  Analyzing case specific fact patterns, applicable laws, insurance issues, complex damages, and a host of other legal dynamics is the job of the lawsuit funding underwriter.  Most professionals in this arena are usually derived from a few occupations.  Below we discuss some of the most common. Read more »