Paul Coppola

March 15, 2024 by Paul Coppola

Med Mal Lawsuit Funding Helps Plaintiffs in Need

Lawsuit loans are routinely offered for medical malpractice cases by legal funding companies. The underwriting of these cases however, is often much more complicated than the standard negligence case. This post identifies some things to remember when attempting to secure Med Mal lawsuit funding.

Medical Malpractice Basics

The American legal system places a duty of care upon doctors as they interact with their patients. Medical Malpractice actions are based upon a breach of this duty. The breach must be of the standard of care for similar professionals in that specialty and in the geographic area in which the treatment occurred.

In order to sustain a cause of action for malpractice against a medical professional, the negligence must be causally related to the damages alleged. In other words, the malpractice must have caused an injury or other damages to the plaintiff. Plaintiffs routinely allege different types of damages. Most often, plaintiffs allege physical damage to their bodies. In other instances, lost wages or other economic damages are sought. In still others, emotional or mental damages are available to plaintiffs.

Malpractice Cases are Often Complicated

Most states recognize malpractice cases for the following:

* Misdiagnosis and Failure to Diagnose a Treatable Medical Condition
* Delay in Diagnosis of a Treatable Medical Condition
* Misread or Improper Evaluation of Study
* Pregnancy, Labor & Delivery Malpractice
* Medication Errors
* and others. . .

People can easily imagine a medical malpractice case where the doctor amputates the wrong leg. Clearly, the doctor should have known which leg to amputate and the resulting damages would be irreparable and not hard to quantify. Such a case would most likely be settled in short order.

But the vast majority of medical malpractice lawsuits are not so cut and dry making Med Mal lawsuit funding challenging.

When health care professionals (including doctors, nurses, and other practitioners) treat their patients, most are doing their very best to help. When something goes wrong, victims sometimes blame the health care worker for unexpected complications. However, just because a patient’s condition worsens does not necessarily mean the medical provider deviated from standard practice. After all, the patient is usually ill before he seeks medical attention.

The Standard of Care

The “standard of care” is treatment that is accepted by medical experts as a proper treatment for a certain type of disease and that is widely used by health care professionals. Once a breach of the standard of care is proven, plaintiffs and their attorneys must then prove malpractice caused the plaintiffs damages. In other words, it is not enough to show the patient eventually suffered. The negligence must cause the suffering. In many lawsuits, this is not so easy to show.

For example, a physician may misdiagnose a patient’s Stage 4 pancreatic cancer. And the attorneys, through their skill and expertise can prove that the doctor’s diagnosis deviated from the acceptable standard of care. However, due to the terminal nature of this type of condition, damages would be very difficult to prove. The patient would most likely be facing a terminal diagnosis regardless of its timeliness. In this instance, any damages would certainly be minimized by defense attorneys.

Med Mal Lawsuit Funding

Med Mal lawsuit funding is a tricky endeavor. When funding malpractice cases, lawsuit loan companies attempt to analyze the probability of success based upon much more complex factual and economic scenarios than typical case loans involving negligence. These might include car or pedestrian accident loans.

For example, malpractice cases usually involve multiple parties. A lawsuit involving a surgery would require the examination of every individual in the Operating Room during the procedure. This normally includes the serving and answering of interrogatories, depositions, and other discovery requests. These steps are taken AFTER the following:

Drafting and filing of the Complaint, service of the Complaint, answering of the Complaint by defense counsel, motions to dismiss, designation of trial counsel, scheduling, logistical issues, document compilation, document production, etc. This must be done for each and every defendant. For these reasons it is not difficult to see why these cases take years to litigate.

Lawsuit delays are compounded by the fact that many lawsuits involve very serious medical conditions which prevent plaintiffs from earning wages. This combination frequently results in increased economic difficulty for plaintiffs. Creditors do not usually care whether plaintiffs can work, they only care about getting paid. That is their business.

Med Mal lawsuit funding is one way to mitigate against these economic hardships. Essentially, plaintiffs assign a portion of the proceeds of their cases to lawsuit funding companies. If a case settles, the “loan” is paid back according to the terms outlined in the funding agreement. The use of the Med Mal lawsuit loan is totally at the discretion of the plaintiff. The money can be used for anything at all. Which is great news for plaintiffs who find themselves behind on their expenses.

If You Have Any Questions, Call 888-964-2224

WE ARE HERE TO HELP YOU!

Med Mal Lawsuit Funding Troubles

The bad news is that medical malpractice cases are very difficult to fund. The reason is because they are so difficult to win. Keep in mind, the discovery process described above costs money in the form of time, expert fees, court fees, stenographers, support staff, etc. A lawsuit based on medical negligence is a commitment of time, money and energy.

Further, in many jurisdictions, Med Mal plaintiffs only win 1 out of 3 lawsuits filed. Plaintiff attorneys make money because the cases which are won, are very large. But for purposes of Med Mal lawsuit loans, where any loss is a total loss, 33.33% is just not the ideal scenario.

Med Mal Lawsuit Funding Still Available

Despite these obvious pitfalls, lawsuit funding companies offer lawsuit funding for medical malpractice cases every single day. They are not the easiest cases to get approved, but the plaintiff’s need still exists. The legal funding business is there to help plaintiffs lessen their financial burdens while they wait for a favorable recovery on their case. Med Mal lawsuits are complex and time consuming. Med Mal lawsuit funding is one possible financial solution available to plaintiffs.

Thank you for your interest in Med Mal Lawsuit Funding and the lawsuit loan business.

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March 11, 2024 by Paul Coppola

Potential Reasons You Were Denied a Lawsuit Loan

Applying for lawsuit loans is easy, but what are the implications when you are denied a lawsuit loan? Most lawsuit loan applicants are approved for funding. In this post, we examine the reasons why plaintiffs are unsuccessful in their quest for financial support through legal funding, a.k.a. lawsuit loans.

What are Lawsuit Loans?

Lawsuit loans are financial transactions where plaintiffs receive a portion of their lawsuit settlement prior to the case’s resolution. In return, plaintiffs pledge a portion of their settlements at some point in the future but only if they win their cases. The repayment amount is dependent upon how long it takes to finish the case.

Lawsuit loans sell future property rights in the settlement and for this reason, repaid only if the lawsuit succeeds. For this reason, lawsuit loans are not actually loans in the traditional sense of the word, since regular loans imply repayment under all circumstances.

Reasons to be Denied a Lawsuit Loan

Each lawsuit is evaluated on its own merits for purposes of lawsuit loan approvals. Below are a few reasons why a lawsuit funding company will pass on the opportunity to invest capital into a particular case.

Attorney Representation

Lawsuit loans are generally not available to plaintiffs who do not have an attorney on retainer. While some pro se plaintiffs apply for cash advances on their pending lawsuits, attorney cooperation is an integral part of the lawsuit loan process. Accordingly, plaintiffs without counsel are denied lawsuit loans.

Timing

It is possible to be denied a lawsuit loan simply because of poor timing. For example, lawsuit funding underwriters need information to analyze a lawsuit for funding. If a case is too new, it is unlikely enough information is available to adequately determine the risk of loss. This is why most lawsuit funding companies are reluctant to advance money to plaintiffs less than 45 days after an accident.

Documentation

Consider a lawsuit for personal injuries sustained from a car accident. Since car accidents are generally based in negligence, plaintiffs must prove liability, causation and damages. The success of an auto accident lawsuit (and almost all others), is the ability to collect. Evidence of a defendant’s ability to pay is also required. In order to evaluate a plaintiff for a car accident lawsuit loan, underwriters need the “nuts and bolts” of the case. That is, they need a police report (liability), medical records (damages) and insurance information (ability to pay).

Car accident documentation is fairly straightforward but not all lawsuits are so easy. Consider medical malpractice lawsuits where a plaintiff needs an advance. Med Mal lawsuit funding requires copies of the following to properly consider the case for funding:

the Complaint
Bill of Particulars, if applicable
Expert credentials
Expert reports
Insurance information
Estimation of damages
and more. . .

Documentation the name of the game in determining the likelihood of success for any particular lawsuit. If essential documentation is not available, lawsuit loans are generally denied.

State Law

Certain states prohibit lawsuit funding. In others, regulation renders the business unprofitable. In these jurisdictions, there is no market for plaintiffs to sell their future settlement. If a plaintiff lives in a state that prohibits the practice altogether, a lawsuit loan is denied.

Plaintiffs try outsmarting lawsuit loan companies by applying out of state. Lawsuit lenders must still verify your residency however. So, if the plaintiff lives in a “prohibited state”, he/she will be denied a lawsuit loan.

Case Equity

Case equity represents the available settlement money from which all parties are paid. For example, a lawsuit with an expected value of $100,000 without any liens or other encumbrances on the file (other than attorney’s fees), has case equity of approximately $60,000 ($100,000 settlement value – $40,000 attorney’s fee = $60,000).

These calculations are rarely that straightforward. Often, attorneys pay liens at settlement disbursement. These might include:

expert fees
court costs
stenographer costs and document fees
filing fees
arbitration costs
medical bills
child support payments
tax liens
and more. . .

When a large amount of liens are present on a file, case equity shrinks accordingly. This affects how much lawsuit funding a plaintiff can get. In many cases, liens can limit the amount available. In other cases, low case equity can cause lawsuit loan denials.

Prior Funding

Multiple lawsuit loans can be another factor in being denied a lawsuit loan. As stated above, there is only so much “room” in a case to get everyone paid at settlement. Large funding payoffs are a common reason for lawsuit loan denials. Again, the reason is that too much is owed compared to the expected value of the case.

Consider that same $100,000 expected settlement value with the 40% attorney fee. Now add a $20,000 payoff for a previous lawsuit loan. Now add a Medicaid lien in the amount of $20,000. From the $100,000 settlement, plaintiff receives $20,000 when all is said and done ($100,000 settlement value – $40,000 attorney’s fee – $20,000 loan payoff – $20,000 Medicaid lien = $20,000).

Perhaps this hypothetical plaintiff is happy with the settlement. How happy would the plaintiff be if the liens were more and only $10,000 was his/her net amount? Would that plaintiff be likely to accept the $100,000?

Lawsuit settlements make sense for all parties. Accordingly, lawsuit funding companies go through great lengths in their analysis to make sure there is enough money left for plaintiffs at the time of disbursement. This way, everyone is satisfied. If there isn’t enough money available, then lawsuit loans are denied.

Case Type

Other lawsuit loan applications are denied because they are a specific case type. Although most cases are candidates for funding, some cases are not. Cases for social security disability benefits are not fundable lawsuits. Neither are divorce, inheritance or soft tissue cases excellent investment choices generally.

By far the most common lawsuit loan type involves claims for personal injuries. Cases other than personal injury lawsuits can be funded however. These include discrimination cases, medical malpractice, wrongful imprisonment, and employment lawsuits. Others are denied a lawsuit loan because of their specific case type.

Weak Liability

A defendant is liable when they are held responsible for something. In the case of civil lawsuits, liability means the plaintiff can hold the defendant responsible for damages.

Settlement funding contracts are all or nothing investments for lawsuit lenders. If a lawsuit is unsuccessful, the company loses its investment. For this reason, liability is a major consideration for underwriters. If liability is not found, the lawsuit fails and the settlement loan is not repaid.

Certain cases have clear liability. Consider a car accident where one car is stopped at a traffic signal and a second vehicle “rear ends” the first. Liability is easily established in this set of facts.

However, liability is not always so clear. Consider a case where a doctor is sued for malpractice. Since most medical malpractice cases are not successful, lawsuit lenders are reluctant to advance money unless liability is obvious. If not, it is likely the case will be denied a lawsuit loan.

Inability to Collect

What happens when plaintiffs sue someone with no money? What happens when there is no available insurance coverage? These issues can have a significant impact when trying to get approved for a lawsuit loan. Unfortunately, many defendants are judgement proof. This means that even if plaintiffs prevail in court, there is no money available to compensate them. Unfortunately, Plaintiffs who sue judgment proof defendants will likely be denied a lawsuit loan.

Communication

In rare instances, pre-qualified applications can die on the vine simply from lack of activity. To be approved, a plaintiff must be screened, paperwork gathered, and attorney contacted. Once approved, the case goes to the funding department. If at any point in the process communication breaks down, the lawsuit loan can be denied.

For example, a few attorneys simply will not cooperate with funding requests. Their reasons may be personal or just a matter of firm policy. Without attorney cooperation, a lawsuit loan is denied.

If You Have Any Questions, Call 888-964-2224

WE ARE HERE TO HELP YOU!

What to Do If You are Denied a Lawsuit Loan

If your request for a lawsuit loan is denied, there are still some things you can do.

First, try to pinpoint the reason for the denial. If the application was denied for lack of paperwork or something similar, see if you can help secure the requested paperwork.
The second thing you can do to help your chances for lawsuit loan approval is to communicate your needs with your attorney. With your attorney on board, settlement funding runs smoothly and without complication.

Third, apply with a different lawsuit funding company. Lawsuit funding underwriting is often subjective and your denial could be related to internal portfolio considerations unique to that specific business. Finding the best lawsuit funding company is a worthwhile endeavor and can save you thousands of dollars as well.

Finally, you might also consider an alternative short term solution and reapply at a later time. Circumstances often change and become a better fit for purposes of getting support through settlement funding.

Lawsuit Loan Denial Takeaways

Legal funding exists to bridge the gap between the filing of a claim or lawsuit, and its ultimate resolution. Although some lawsuit types are not a fit for this particular financial solution, other lawsuit loans are denied for other reasons. Understanding these reasons can allow plaintiffs to avoid these roadblocks whenever possible.

If you have any questions regarding lawsuit loans or the reasons why your particular case was denied, please give us a call at 888-964-2224. You can also contact us online. We are here to help and will answer any questions you may have.

Thank you for your interest in Fair Rate Funding.

Apply Now

March 6, 2024 by Paul Coppola

Multiple Lawsuit Loans Are Often Needed

If you’ve already received an advance on your case, it is likely you will be eligible for additional funding. Of course, how much depends upon the specifics of your case. In this post, we examine the use of multiple lawsuit loans and how to go about getting multiple lawsuit loans on your case.

What are Lawsuit Loans?

A pre-settlement loan, also known as a lawsuit loan, legal funding or settlement funding is a special type of financial support for plaintiffs involved in pending litigation. Pre-settlement loans are not technically loans but rather cash advances against pending lawsuits.

These transactions are designed as an assignment of property rights in the future proceeds of a case. Because of this, lawsuit loans are not repaid if the underlying lawsuit is not successful. Thus, they are often referred to as “non-recourse” financing and a risk-free way for litigants to access much needed cash.

How Lawsuit Loans are Used

Lawsuit loans are used as a financial lifeline for plaintiffs who encounter financial strain during the litigation process. Delays in lawsuit justice are a feature in a system which tries to balance the ability of citizens to resolve disputes and the costs to administer justice.

The most popular lawsuit loans are personal injury loans – advances to injured plaintiffs who are sometimes unable to work due to injuries. Lawsuits take time to resolve. Many plaintiffs must wait years to receive compensation. Settlement loans are commonly used to pay for:

Rent or housing
Groceries
Utilities and other living expenses
School Tuition
Transportation Costs
Business or Investment Opportunities
Medical Treatment
Surgeries
and more . . .

Although most plaintiffs use the money as described above, there are no restrictions on the use of lawsuit loans. Any uses are acceptable, if decided upon by the plaintiffs themselves.

Why Use Multiple Lawsuit Loans?

In many instances, plaintiffs require multiple lawsuit loans. Can plaintiffs get multiple settlement loans? They absolutely can and for a variety of reasons. Two of the more common reasons why plaintiffs get more than one lawsuit loans are:

Need More Money

Finances can be tricky and what is needed at one moment can change quickly. For this reason, plaintiffs who need more money can and do apply for multiple lawsuit loans. These can be structured as one-time advances or done on a periodic basis.

Monthly Expenses

In many instances, plaintiffs are unable to earn the same amount of money as before their lawsuit commences. Many are unable to meet monthly expenses and are forced to look for liquidity solutions to bridge the gap. In these cases, multiple lawsuit loans can be set up as monthly stipends (i.e. monthly payments made to cover monthly expenses).

Multiple lawsuit loans provide plaintiffs with the ability to endure a sometimes long and drawn out litigation process. Even better news is that there is extreme flexibility for plaintiffs to access cash from their lawsuit. Lawsuit funding is a largely unregulated marketplace. Thus, lawsuit “lenders” can be creative in their efforts to solve plaintiffs’ cash flow problems and turn a profit themselves.

If You Have Any Questions, Call 888-964-2224

WE ARE HERE TO HELP YOU!

What Makes More than One Lawsuit Loan Possible?

There are two questions which must be answered in order to qualify for multiple lawsuit loans. The first is, how much is available to advance on a particular case? A general rule is ten percent (10%) of the estimated lawsuit value. This figure is an industry standard and only a general rule of thumb. It is designed to offer the support each plaintiff needs but also allow the plaintiff to receive a meaningful amount of money from the remaining settlement, even after repayment of the advance, legal fees, and other costs are considered.

The second question is, how much is each lawsuit worth? And that answer depends upon the facts of each particular case. The question is answered by lawsuit funding underwriters who are legal professionals and in the business of analyzing risk in common lawsuit types. They tend to be conservative in their estimates but the art of underwriting is very subjective.

Qualification for multiple lawsuit loans involves analyzing:

The likely settlement value
The expected duration of the case
Available insurance coverage
Amount of damages caused
The likelihood of success

Based upon this analysis, underwriters will set a ceiling on the maximum amount of funding available as the lawsuit is situated at the time. As long as the request for multiple lawsuit advances and/or lawsuit loan buyouts are at or below this threshold, the funder will likely approve the request.

How to Apply

The process of obtaining a pre-settlement loan is simple.

Fill out the Quick Application on this web page or call us at 888-964-2224.
We contact you shortly to discuss your case.
Once you are pre-qualified, we discuss your case with your attorney.
If your case is approved for cash advance, we prepare a document for your signature.
Once executed, you are funded via overnight courier or EFT (electronic funds transfer).

Final Thoughts

Lawsuit loans are useful tools for plaintiffs in need of financial support during the litigation process. Lawsuit funding is flexible and this flexibility allows the best lawsuit funding companies to be creative in the financial solutions they offer clients. Multiple lawsuit loans are one such solution.

Thank you for your interest in Fair Rate Funding.

Apply Now

March 1, 2024 by Paul Coppola

Why Attorneys are Concerned About Lawsuit Loans

Plaintiff attorneys have legitimate concerns with lawsuit funding since their clients and cases are involved in these financial transactions. In this post, we examine why plaintiff lawyers are concerned with their clients entering into legal loan contracts and how these legitimate concerns are addressed.

Attorney Concerns with Lawsuit Funding Begin with Origination

Origination of new legal funding business usually comes in two forms. Either the client contacts the lawsuit loan company or a lawyer refers a client who needs immediate cash against his/her case.

Attorney referrals are the ideal way to secure funding because the referring attorney usually understands the funding business and can secure the best terms. We discuss the benefits of a lawyer/funder relationship in other posts.

New business initiated by the client is an entirely different animal. Although lawsuit funding requires attorney cooperation, sometimes attorneys are unfamiliar with lawsuit “loans” or otherwise reluctant to participate in the lawsuit loan process.

When attorneys are reluctant to cooperate with their clients’ wishes, the reasons usually fall within the same few themes. Below, we examine some common issues.

Oppressive Terms

To some critics, lawsuit loans are the equivalent of payday lending only with a lawsuit instead of a paycheck backing the transaction. Critics maintain lawsuit loans are predatory lending and exploit plaintiffs when they are vulnerable. Many articles have been written about the costs associated with lawsuit loans. We will not get into that topic in too much detail herein.

Yet, lawsuit loans are not traditional loans, so criticisms regarding cost are perhaps misplaced. Legal funding contracts are non-recourse since repayment is contingent upon a successful outcome. This means the recovery itself must be the source of the repayment, not the plaintiff personally. Lawsuit loans are risky in that any loss is a total loss of the funding company’s investment. This additional risk must be factored into the pricing.

Nevertheless, many plaintiff lawyers have legitimate concerns regarding lawsuit funding costs, since in some instances, the transactions can hinder settlement negotiations. More on this issue below.

It is also important to understand that while the costs are higher than traditional financing options, pricing for cash advances on pending lawsuits has drastically declined in recent years. Moreover, by working with funders directly, the client can save as much as 50% off the cost of the advance since some administrative fees (origination, underwriting and broker fees) can be avoided.

Scope of Representation

Another common attorney concern with lawsuit funding involves the scope of representation. Attorneys are understandably leery of representing clients outside the scope of their retainer agreements. When a client applies for funding, the attorney must balance his client’s interests with his own.

For example, a lawyer agrees to represent a plaintiff who is injured in an automobile accident. As far as the attorney is concerned, his representation begins and ends with the personal injury action. Representing a client as to the nuances of contract law and lawsuit funding contracts may be beyond his level of expertise. Or perhaps the attorney simply does not want to spend his valuable time researching these topics without payment for his services. These are legitimate concerns.

In the vast majority of cases, this potential conflict is remedied because the attorney is normally willing to help his client, and more often than not, discussions about the funding process between the attorney and the funding company will put the attorney at ease.

Funding companies simply want to be repaid if there is a successful resolution to the case. They do not want to hang an attorney “out to dry” if something unforeseen should occur. After all, a lawsuit funding company wants to be a resource for an attorney, not an adversary.

If You Have Any Questions, Call 888-964-2224

WE ARE HERE TO HELP YOU!

Attorney Concerns with Lawsuit Funding in Settlement Negotiations

One of the most common attorney concerns with lawsuit funding is the idea that more liens on a file will result in difficulty settling the case. The thinking is that the client will not want to settle the case if most of the award goes to attorney’s fees, medical or other liens, and repaying the lawsuit loan. This is also a legitimate concern. For example, one can easily foresee a client wanting to “roll the dice” and go to trial if he feels his portion of the award is less than adequate. Trying cases costs money and time so attorneys are likely to resist anything which would increase this possibility.

What is important to realize however is that pre-settlement finance companies do not want a case to go to trial either because almost anything can happen in a courtroom, and often does. Settlements make sense for all parties so funders mitigate the risk of trial by limiting how much lawsuit funding is available on any particular case. More often than not, a conversation with the attorney will quell concerns about this issue. Since the advance amounts are designed to gain a return, they are usually low enough to avoid this problem.

When a case does not yield the expected settlement offer, other tactics can be used to ensure a positive outcome for all parties involved. Professional settlement funding companies will rarely stand in the way of a reasonable settlement especially when something unforeseen (like when plaintiffs die during lawsuits) occurs.

Balancing Plaintiff and Attorney Concerns with Lawsuit Funding

Of course, more attorney concerns with lawsuit funding possibly exist than explored in this post. And attorneys may have a multitude of reasons to discourage their clients from obtaining lawsuit funding. Yet, the above issues repeatedly come up when dealing with these concerns and are routinely resolved through communication and mutual understanding.

If you have any questions regarding lawsuit loans, do not hesitate to give us a call. You will reach a live representative who will be happy to field your questions. Or you can contact us online. We are here to help and are at your service.

Thank you for your interest in pre-settlement funding.

Apply Now

February 29, 2024 by Paul Coppola

Frivolous Lawsuits – Costs and System Safeguards

Lawsuits are a fundamental aspect of the legal system, serving as a mechanism for resolving disputes and ensuring justice. However, within the system is the ability of claimants/plaintiffs to initiate proceedings often referred to as frivolous lawsuits – legal actions which lack merit, are filed primarily to harass, intimidate, or extort defendants rather than to seek legitimate justice.

While frivolous lawsuits can capture public attention and spark outrage, a deeper look into their implications is in order. In this post, we delve deeper into frivolous lawsuits and their implications on society and also relate them to lawsuit funding.

The Cost of Frivolous Lawsuits

Frivolous lawsuits come with significant costs, not only for the parties directly involved but also for the legal system and its participants. Since the civil justice system is primarily publicly funded, these costs are a drag on society as a whole and manifest in various ways:

Financial Burden

Frivolous lawsuits impose a substantial financial burden on defendants who bear the costs of legal defense, potentially draining resources which can be allocated elsewhere. These additional costs must be borne by someone and are normally passed on to the end users of products and services.

Waste of Judicial Resources

Frivolous cases divert valuable resources away from legitimate legal matters before the court. This backlog creates legal system delays and impacts timely justice for real claimants. In many jurisdictions, plaintiffs must wait many months or even years before their cases are resolved. Of course, these delays are not solely caused by frivolous lawsuits but a lack of allocated resources to a crowded civil docket. Frivolous cases only add to an existing problem.

Impact on Reputation

Defendants targeted by frivolous lawsuits may suffer reputational damage, regardless of a case’s merit. Even if lawsuits are ultimately resolved in defendants’ favor, damage to their reputations can endure.

Chilling Effect

Frivolous lawsuits can discourage innovation and entrepreneurship. Fear of litigation may deter individuals and businesses from engaging in activities that could potentially attract legal scrutiny, stifling economic growth and creativity.

If You Have Any Questions, Call 888-964-2224

WE ARE HERE TO HELP YOU!

Safeguards Against Frivolous Lawsuits in the Legal System

Despite the challenges posed by frivolous lawsuits, the legal system incorporates several safeguards to mitigate their impact and ensure the fair and efficient administration of justice. These include:

Rule 11 Sanctions

In the United States federal courts, Rule 11 of the Federal Rules of Civil Procedure empowers judges to impose sanctions on parties or attorneys who file frivolous lawsuits or pleadings. These sanctions may include monetary penalties or disciplinary actions.

Attorney Oversight

Legal professional bodies (bar associations) regulate the conduct of attorneys and impose ethical obligations to discourage the filing of frivolous lawsuits. Attorneys found to engage in unethical behavior, including the pursuit of meritless claims, risk disciplinary measures, including suspension or disbarment.

Summary Judgment

Courts have the authority to grant summary judgment in cases where there is no genuine issue of material fact, effectively disposing of frivolous claims at an early stage of litigation without the need for a trial.

Cost Recovery

In some jurisdictions, defendants who successfully defend against frivolous lawsuits may be entitled to recover their attorney fees and litigation costs from the plaintiff, serving as a deterrent against baseless litigation.

Judicial Discretion over Frivolous Lawsuits

Judges possess discretion to dismiss frivolous lawsuits, impose sanctions, and manage cases efficiently to uphold the integrity of the legal process.

Business Costs

Plaintiff attorneys on contingency fee retainers often front the costs of pursuing a claim for their clients. Frivolous lawsuits represent a business loss for these firms so they are unlikely pursued for business reasons.

Frivolous Lawsuits and Legal Funding

One common critique of the legal funding industry is that the practice encourages litigation of matters which would ordinarily be resolved without it. Critics predict that frivolous lawsuits increase when litigants can find investors to cover litigation costs (commercial litigation and/or mass torts). They argue that lawsuits continue too long if parties do not face economic pressure to resolve the case before trial.

If legal funding cash advances on pending lawsuits were available to anyone and everyone, perhaps their argument would have merit. Their arguments fail however, since these criticisms assume lawsuit loans (legal funding) are available to all litigants.

In reality, more goes into lawsuit loan approvals than just being a named plaintiff on a filed complaint. Lawsuit funding companies go through the lawsuit loan process and painstaking underwriting in order to identify “fundable” lawsuits. And a fundable lawsuit means a case with a strong likelihood of success since cash advances on pending lawsuits are not repaid if cases are lost. The non-recourse nature of these transactions means that legal funding capital flows to the best lawsuits, not frivolous ones.

Conclusion

Frivolous lawsuits represent a challenge within the legal landscape, with significant costs and implications for all stakeholders involved. However, the legal system incorporates various safeguards to address these challenges, promoting fairness, efficiency, and the pursuit of legitimate justice.

By upholding ethical standards, exercising judicial discretion, and imposing consequences for misconduct, the legal framework endeavors to strike a balance between access to justice and the prevention of abuse. Ultimately, fostering a culture of responsibility and accountability among litigants and legal practitioners is essential to safeguarding the integrity of the legal system and preserving public trust in the pursuit of justice.

Thank you for your interest in lawsuit funding.

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February 27, 2024 by Paul Coppola

Attorneys Use Lawsuit Funding to Benefit Their Practices

Attorneys use lawsuit funding properly by fostering working relationships with reputable lawsuit lenders. These relationships are a valuable asset for your firm.

Since each lawsuit is unique, attorneys sometimes require flexibility from lawsuit lenders to provide much needed liquidity for clients. These funds can be used for any purpose ranging from surgical procedures to daily living expenses.

In this post, we examine the best way to find the best lawsuit funding company, assure the terms of legal funding contracts are fair and transparent and explore how lawyers can best use lawsuit funding relationships.

Understanding Contract Structure and Costs

Almost all lawsuit funding agreements assign property rights in a portion of the future proceeds of pending litigation. The contracts are drafted in this way so the transactions are “non-recourse” and fall outside the realm of traditional loans for purposes of state usury laws.

According to the contract, the lawsuit cash advance is to be repaid from settlement or judgement proceeds and lenders cannot pursue plaintiffs personally for repayment. Thus, if there is no monetary recovery, the advance is not repaid. While percentages and time are factors which dictate repayment amounts, the contingent nature of a successful outcome makes these transactions unique.

While there is a wide range of lawsuit loan pricing methods used by different lawsuit funding companies, the vast majority of advances on pending lawsuits‘ repayment schedules are calculated in one of two ways.

The first way is through a compounding monthly rate. The normal range is 2.5% to 3.5% per month. The second way is by calculating a simple interest rate based on the contract amount. Clients can expect to see a range from 18% -50% every six-months until the case is settled and advance repaid.

All Rates Are Not Equal

You may be surprised to learn that a compounding monthly rate may not be as oppressive as it sounds. In fact, if a lawsuit were to settle within the first 6 months after an advance, the average compounding monthly rate is cheaper than a flat rate calculation. After that time frame, but before 24 months, both rate structures are remarkably similar. Only after 2 years is the compounding effect noticeable.

There are pros and cons to both lawsuit loan rate structures. And although the contractual language of lawsuit funding transactions is not complex, what personal injury attorney wants to spend the time becoming an expert in this field? As attorneys, we cannot be an expert in everything. Couldn’t your time be better spent elsewhere?

The nuances of lawsuit loan contracts are easily grasped when you have a “go to guy” in the lawsuit funding business. A good working relationship with a funder you can trust will save you a great deal of time in the long run.

If You Have Any Questions, Call 888-964-2224

WE ARE HERE TO HELP YOU!

Understanding How Attorneys Use Lawsuit Funding Properly

Lawsuit funding operations design contracts which protect their interests in the event a dispute arises. Obviously, lawsuit funding companies are concerned with repayment of capital. Intelligent lawsuit funding companies are also concerned with creating mutually beneficial relationships with attorneys and their clients. They understand the value of attorney referral business to the extent that it lowers the cost of lawsuit loan case origination.

Smart plaintiff attorneys use lawsuit funding properly when they understand funders’ business needs and balance them with the needs of their clients. For example, consider a personal injury case where the plaintiff was not forthcoming about prior injuries. Once deposed, plaintiff was forced to admit injuring the same body parts in a prior accident. One can expect any settlement offer to be well below what was projected by lawsuit funding underwriters relying on limited information.

The result might be difficulty in settling the case. After all, the lawsuit loan, if paid off in full, will yield virtually no recovery for the plaintiff personally. Meanwhile, the attorney cannot “sell” a reasonable settlement offer to his client who wants to go to trial to see what happens. Of course, the plaintiff is unaware of the costs associated with going to trial. He/she may have read an article online stating a particular injury type is worth over $1,000,000 in settlement.

Faced with the “throwing good money after bad” prospect of prepping for trial, hiring experts and actually picking a jury, attorneys who have existing relationships with lawsuit funders can approach these companies and explain the situation. Although many would not be pleased, professional funding operations understand the value of repeat business and will usually be reasonable if settlement negotiations break down. Having to take a reduction on a single case is far more palatable when that same firm routinely refers clients for funding.

What are the First Steps?

Contact a lawsuit funder about their programs and make sure you get at least a ballpark estimate of the costs. These should include process fees, underwriting fees, application fees, and origination fees, if any. Attorneys should ask questions about how the advance is amortized, when repayment is expected and what exactly are an attorney’s obligations under a typical agreement.

By beginning a dialogue, you will get a feel for whether the funding company is up front and honest with the information you request and a sense of what it will be like to do business with the company in the future. From there, it is just a matter of getting comfortable with the lawsuit loan process and the players.

Choose Fair Rate Funding

At Fair Rate Funding, we want to be a resource for your firm and your clients. We are plaintiff advocates in that we afford litigants the financial support they need to pursue their interests in the court system. We’ve been doing so since 2007.

If you have any questions of any kind about how lawsuit funding can help your practice, please contact us at 888-964-2224. We are here to help and are at your service.

Thank you for your interest in the lawsuit funding business.

Apply Now

February 26, 2024 by Paul Coppola

Delays in Legal System Give Rise to Lawsuit Funding

Sometimes it is appropriate to get down to basics when analyzing an issue. Although we’ve written extensively about the pre settlement funding business and how the market players are filling an existing need, what is rarely discussed is why there is a need in the first place. In this post, we uncover that legal system delays are the origin of lawsuit funding.

The legal system is not perfect. Like all systems, certain problems arise. The good news is that in a free society, market participants can remedy these problems.

Lawsuit delays are a result of limited resources in resolving disputes between parties. They are just one flaw within the legal system. Lawsuit funding seeks to remedy the effects of legal system delays.

In This Post

Delays in Legal System Give Rise to Lawsuit Funding
Legal System Does What it Intends
Speedy Justice
Lawsuit Funding Responds

Legal System Does What it Intends

No one would deny that a legal system designed to resolve civil disputes is a good thing. The alternative might be people taking into their own hands the means to resolve these disagreements. One can easily envision violent altercations as the ultimate form of dispute resolution. In a civilized society, the courts offer parties to a civil dispute an opportunity to resolve it without bloodshed.

Further, a legal system which utilizes well documented regulations and historical precedent builds a foundation to resolve all future disputes in a more equitable fashion. With this foundation, those who make their living navigating the legal system (i.e. lawyers) can learn those standards and help others with this expertise.

The problem with the legal system has never been its inability to resolve conflict. In fact, many, MANY, rules and regulations are in place specifically to deal with potential conflicts and other pitfalls in the process. Most of the time, these were implemented because of the existence of past problems. Ultimately, the system reaches its intended destination – justice.

Speedy Justice

One often cited legal system flaw however, is the speed in which justice is served. While many small disputes can be adjudicated in only a couple of months, the vast majority of cases will not reach their final conclusion for many months and more often than not, years.

Of course, the time it takes from complaint to settlement varies from venue to venue and from case to case. Factors such as the type of case, amount of other cases on the docket, discovery, lining up witness and expert testimony, and coordinating attorney calendars can all contribute to delays in the legal system.

Are Legal System Delays Really Flaws?

Legal system delays are not necessarily a bad thing since many people make a living providing legal services to the public. Certainly the speed of the civil justice system could be increased, but at what cost? Are more judges, clerks, registrars, courthouses, lawyers really what we need? Taxes and borrowing must pay for it. Do we need more of those?

This delay also adds an added benefit of filtering out frivolous lawsuits and/or petty claims because it simply may not be worth the effort for parties to use the system. If too much effort is required, plaintiffs might not be willing to pay the price, especially if the potential reward is limited.

Lawsuit Delays May Cause Problems

For the majority of participants, the legal system in the United States operates as intended. All citizens are allowed access to the courts to rule on disputes between parties. It may take some time, but ultimately the matters are resolved.

For others however, legal system delays are significant flaws and can pose real problems. For example, personal injury plaintiffs, who are unable to work due to injuries, often encounter severe financial distress while they wait out the judicial process. In this situation, any delay in justice can be financially burdensome and uncomfortable.

For years, plaintiffs met this financial stress in traditional ways like taking loans from family members, selling of existing property, credit card cash advances, etc. In the last couple of decades, settlement funding emerged to meet the needs of these individuals.

If You Have Any Questions, Call 888-964-2224

WE ARE HERE TO HELP YOU!

Lawsuit Funding Responds

The lawsuit funding business, which provides liquidity to plaintiffs prior to settlement or recovery, attempts to fill the need of plaintiffs who cannot meet their expenses while they wait out legal system delays. The practice gained momentum in the late 2000’s and is now a legitimate part of the civil litigation landscape.

What are Lawsuit Loans?

Lawsuit loans are financial deals that address the ramifications of legal system delays. They occur when a plaintiff pledges a portion of the future recovery on a pending lawsuit in return for a lump sum amount of cash from a lawsuit lender. Lawsuit loans bridge the financial gap between initiating a lawsuit and its ultimate resolution. They attempt to level the financial playing field between individual plaintiffs and large insurance companies who defend civil actions in court.

How are Lawsuit Loans Different?

Traditional loans imply repayment at some point in the future. Lawsuit loans are not loans in the traditional sense because repayment is dependent upon a successful outcome. That is, if the lawsuit fails, the lawsuit cash advance is not repaid.

Lawsuit funding contract terms dictate that repayment is to be made from lawsuit proceeds only. For this reason, lawsuit lenders cannot pursue plaintiffs personally for repayment. Lawsuit loans are appropriately deemed “non-recourse” funding.

How are They Used?

Medical treatment and surgery loans
Living expenses
Housing
Transportation
Past debts
School tuition
and more . . .

How the Process Works

Before considering non-recourse legal funding, we advise that clients speak with their trusted personal injury attorney to weigh out all of their options.

APPLY ONLINE – The lawsuit loan application process is brief and straightforward. Simply fill out our brief online application or give us a call to get started.
CASE REVIEW – We’ve been in the lawsuit funding business for over 15 years and have decades of legal experience. We need only a few minutes with your attorney to evaluate a case for lawsuit loan approval.
RECEIVE FUNDS – Once approved, a contract is executed and money is sent via overnight check or electronic bank transfer.

Legal Funding and Legal System Delays

As stated above, legal system delays are inherent in the judicial process and are unavoidable. Their effects however, can be minimized in certain circumstances utilizing the power of lawsuit loans. If you are struggling financially due to delays in justice, you may have more options than you realize. If you have any questions regarding legal funding and your lawsuit, reach out to us at 888-964-2224 and speak to a live representative. We are at your service and here to help.

Thank you for your interest in Fair Rate Funding.

Apply Now

February 21, 2024 by Paul Coppola

How to Get Settlement Money Early

If you are involved in civil litigation and are encountering financial strain, you may wonder if it’s possible to get settlement money early. In this post, we explain how to use lawsuit loans to get a portion of your settlement money early – prior to actually resolving your case.

What are Lawsuit Loans?

Lawsuit loans are specialty financial transactions where lawsuit lenders advance money on pending cases. Lawsuit loans are also known as settlement funding, legal funding, settlement loans, case loans and lawsuit funding.

Lawsuit Loans are Not Loans

Although the word “loan” is contained in some phrases describing these transactions, lawsuit loans are most definitely NOT loans in the traditional sense of the word. Traditional loans imply repayment at some point in the future. Lawsuit funding however allows you to get settlement money early by advancing cash in anticipation of settlement or recovery. Repayment is contingent upon a successful outcome.

This means lawsuit loans are risk free to plaintiffs who wish to get some of their settlement money early to the extent that repayment is made with the lawsuit proceeds themselves, not the plaintiff personally. Accordingly, lawsuit funding contracts are deemed “non-recourse” early advances on lawsuits.

Why You Might Need Settlement Money Early

Lawsuits take time and sometimes years may pass between the time a plaintiff is wronged in the eyes of the law and some sort of monetary recovery. There are many reasons why lawsuits take so long.

For example, a personal injury case might be forced to continue medical treatment or even surgery. Healing from injury adds to the litigation process because often, it is impossible to gauge the permanency and severity of an injury until all treatment options are exhausted.

While treating, plaintiffs are often not able to earn as much money as before their accidents. This adds stress to an already stressful situation leaving many plaintiffs susceptible to low-ball settlement offer tactics used by insurance companies to minimize the amount of compensation plaintiffs receive for their troubles.

How Pre-Settlement Funding Can Help

Lawsuit loans are an effective way to get settlement money early and resolve short-term cash flow issues that plaintiffs potentially face. Traditional bank loans involve lengthy credit checks and sometimes pledging collateral. Lawsuit loans involve no credit checks and no need to prove your income or employment status. Lawsuit loan companies rely solely on the strength of your case and how much you’ll likely receive when it’s over.

Even better, you can use lawsuit loans for any expense whatsoever. Many clients use early settlement money to pay for:

Medical treatment or surgeries
Living expenses
School tuition or education payments
Housing costs such as rent or mortgage payments
Consolidating existing debt
Transportation costs
Business expenses, and
other uses for lawsuit loans

Pre-settlement funding is a financial lifeline for plaintiffs, enabling them to cover their costs while waiting out the legal process. Getting settlement money early through lawsuit loans avoids the credit and employment issues which normally face traditional borrowers.

If You Have Any Questions – Call 888-964-2224

Complete a Free Application Form Now

How Legal Funding Works to Get Settlement Money Early

The legal funding process works as follows:

Plaintiff contacts lawsuit funder and gives some details about the lawsuit. This will include:
- Plaintiffs name, address and contact information
- Attorney’s name and contact information
- Date of accident/incident
- Amount of money needed early
- Whether plaintiff has received funding previously
Lawsuit lender chases paperwork from client and/or attorney and builds a file to send to a lawsuit funding underwriter.
Underwriter contacts attorney to discuss the case.
Decision is made and if approved, an offer for funding is presented to the plaintiff.
Plaintiff and attorney agree, execute and return the lawsuit funding contract.
Plaintiff receives funds via bank transfer or overnight delivery of a check.

The Costs for Getting Settlement Money Early

As stated above, legal funding contracts are only repaid if the lawsuit is successful. These are asset purchase agreements in which plaintiffs sell a portion of their settlement ahead of time. If the case should lose, what was purchased (settlement proceeds) is worthless. Thus, there is no repayment. That’s the good news.

The bad news is funding companies must charge for this additional risk of loss. Thus plaintiffs can expect to pay approximately 36% or more per year for cash advances on pending lawsuits.

And there is more good news – it’s never been easier to shop for lawsuit loans since information on lawsuit funding rates is plentiful on the internet if you take the time to look. Information on the types of lawsuit loan pricing structures (compounding vs. simple) and legal loan fees can be found all online. It might be wise to examine these types of costs and make a determination on which is the best fit for your personal situation.

Pros and Cons of Lawsuit Loans

Legal Funding: Pros

You get money in as little as 12-24 hours.
You can use the money however you wish.
You can refuse low-ball settlement offers and allow your attorney(s) to negotiate a better settlement.

Lawsuit Loans: Cons

Lawsuit loans can be costly – especially if a plaintiff doesn’t do his/her homework.
Not all cases qualify for lawsuit funding.
- Although many lawsuit loan case types exist, many more simply do not fit within the investment wishes of lawsuit “lenders”. These might include:
  - Social security cases
  - Divorces
  - Some workers’ compensation cases
  - Trust and Estate disputes
  - You are Pro Se (aren’t represented by counsel)
  - Your attorney is not representing you on a contingency fee basis.
  - and more. . .

Do You Need to Get Settlement Money Early

Above we discuss the benefits and drawbacks of getting settlement money early through lawsuit loans. Now you are in a better position to see if lawsuit loans are right for you. If you have any questions or want to know if you qualify, simply pick up the phone and give us a call. You’ll reach a live person during business hours who can answer your questions.

Or you can contact us online for more information. Fortunately, choosing the best lawsuit loan company is well within the reach of every plaintiff. Give us a call. We are here to help and are at your service.

Thank you for your interest in Fair Rate Funding.

Apply Now

February 13, 2024 by Paul Coppola

Successful Legal Funding Applications are Possible – Learn How

Legal battles take time, and this time lag can become a significant hurdle for plaintiffs seeking justice. Legal funding, also known as litigation financing or settlement loans, is a potential solution. Legal funding provides financial support to plaintiffs so they can meet their expenses while they wait out the process. Successful legal funding applications depend upon a variety of factors.

Securing lawsuit loan approvals are not always easy and straightforward. In this post, we examine 5 tips for successful legal funding applications and approvals.

Understand Legal Funding

Before applying for legal funding, ensure you have a comprehensive understanding of legal funding and the lawsuit loan process. Legal funding is selling a portion of a future settlement for immediate cash. In return, the plaintiff pledges a portion of the recovery depending upon how long the case needs to resolve and whether the case is won. Because legal funding contracts are contingent upon a successful outcome, these transactions are considered “non-recourse” funding. That is, repayment comes from the settlement itself, not from the plaintiff personally. If the case is lost, so is the lawsuit lender’s investment.

Understanding legal funding can help with successful legal funding applications since a potential client understands the nature of the transaction. With this knowledge, plaintiffs can better understand the next 4 tips.

Understand Your Case

Successful legal funding applications means understanding what lawsuit funding companies are looking for as investments. Lawsuit lenders are looking for the following:

Plaintiffs with a strong liability claim
Plaintiffs with a retained attorney on a contingency fee basis
Plaintiffs who were significantly harmed by the defendant (damages)

Since lawsuit funders are only compensated if a case is successful, it is not surprising for them to look for cases with a strong likelihood of success. Strong liability and damages are the nuts and bolts of a lawsuit. Representation by a contingency fee based attorney adds another layer of probability to a lawsuit funding investment since attorneys are unlikely to invest their time and money in a lawsuit that will not generate a fee for their firm.

Understanding that certain lawsuit types are better candidates for funding than others will get you ahead of the game when trying to secure a successful legal funding application.

Choose the Right Funding Provider

Not all legal funding providers are the same. So successful legal funding applications can depend upon who you are applying with. Learning how to shop for lawsuit loans can be an extremely cost effective use of your time. Research and identify reputable and experienced funders who specialize in your type of case.

Consider factors such as costs, fees, and legal funding rates. Make sure all the terms and conditions are clear. The best legal funding contracts are free from hidden fees and clearly state repayment amounts in the agreement.

It’s crucial to choose the best lawsuit funding company so that your advance cost and terms are fair. You should choose a funding company who understands the complexities of your case and can offer tailored financial solutions to meet your needs. This is not hard to accomplish and will be time well spent.

If You Have Any Questions, Call 888-964-2224

WE ARE HERE TO HELP YOU!

Successful Legal Funding Applications Need Accurate Information

Providing accurate information can go a long way in a successful legal funding application. During the initial screening, lawsuit lenders gather all the information they need. Remember, your goal and the goal of the legal funding company are the same: a successful legal funding application. Since approvals are wanted by both parties, making it easy on lawsuit lenders can help your cause.

Make sure you provide your lawyer’s full name, name of the firm, address, and phone number. Also make sure you accurately detail the date of accident, the type of medical treatment you received or a measure of the damages you sustained. Remember, information is crucial to lawsuit loan underwriters. Most often, a representative will need to speak with the attorney to gather information about the lawsuit’s strength and the approximate amount of any potential settlement. Plaintiffs should provide accurate information to ensure no delays in getting same day approval for a lawsuit loan.

Effective communication is key to a successful legal funding application. Be responsive to inquiries from potential funders and maintain open and honest communication throughout the process, addressing any concerns or questions that may arise. Building a strong relationship with your funding provider can lead to a smoother funding process and a successful outcome.

Attorney Cooperation – Successful Legal Funding Application Key

Attorney cooperation in lawsuit funding is the master key to successful legal funding applications. Attorneys are an integral part of the legal funding process since they:

usually provide the required case documents.
participate in the underwriting process.
must sign off on the agreement itself.
are responsible for repayment in the event of a successful recovery.

In years past, many lawyers were reluctant to take on these responsibilities for their clients. This is understandable since successful legal funding applications were not part of their job description. The good news is that legal funding has matured and the entire process is streamlined. This means that attorney participation is less intrusive on their time. When it comes to legal funding approvals, attorney cooperation tops the list. So helping your attorney with your settlement loan can go a long way to a successful legal funding application.

Securing Successful Legal Funding Applications

Successful legal funding applications require just a few ingredients. Understanding your case, legal funding, and choosing the right funder can all go a long way to securing legal funding. Being clear and accurate with the information you provide also contributes to success. These four ingredients are well within the control of most plaintiffs. Attorney cooperation then is the missing ingredient but can make all the difference in successful legal funding applications.

By following these five tips, you can enhance your chances of obtaining the financial support needed to pursue your legal case successfully. With diligence and perseverance, you can navigate the legal funding landscape and secure the resources necessary to achieve a favorable outcome in your case.

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February 5, 2024 by Paul Coppola

Social media and lawsuits are a logical outflow in today’s interconnected world since social media platforms have become an integral part of our daily lives. From sharing personal experiences to posting updates on various events, people often turn to platforms like Facebook, Instagram, X (Twitter), and others to connect with friends and family.

However, the ubiquity of social media introduces a new dynamic in the legal landscape, particularly in the realm of personal injury or other civil lawsuits. In this post, we examine social media and lawsuits and explore some ways this new technology can affect personal injury and other civil cases.

What is Social Media

Social media is digital technology that allows the sharing of ideas and information, including text and visuals, through virtual networks and communities. Essentially, social media platforms provide a forum where people can communicate freely.

When these communities began at the end of the 20th century, they were nowhere near as large and influential. Since the launch of Facebook in the mid 2000’s, social media platforms were the most visited websites internationally and according to the Pew Research Center, well over half the US population is on one form of social media or another.

Over time, social media has evolved from direct electronic information exchange, to virtual gathering place or community, to retail platforms for companies to sell their products and services. Their popularity offers both personal and commercial opportunities to individuals and businesses. Yet, there are some downsides to this widespread exchange of information.

Lawsuits and the Use of Evidence

Evidence is anything that can show the likelihood of the truth of something asserted. Simply put, anything that can be used to prove something is evidence. Lawyers use evidence to prove a particular fact or position for their clients. Thus, evidence is the building blocks of a lawsuit.

What Can Be Used as Evidence?

There are many types of evidence. Type of admissible evidence include:

Direct evidence
Circumstantial evidence
Statistical evidence
Real evidence
Demonstrative evidence
Documentary evidence
Impression evidence
Testimonial evidence
Character evidence
Habit evidence
Hearsay evidence exceptions
Forensic evidence
Trace evidence
Expert witness evidence
Digital evidence

What Cannot be Used as Evidence?

Forms of evidence that are generally inadmissible include hearsay, prejudicial, improperly obtained or irrelevant items.

What Evidence Does in Practice

Evidence is used to support a particular position during legal proceedings. The parties either use evidence to prove or disprove something. In civil cases, plaintiffs have the burden of proof. Thus, they need to show enough evidence to prove to the fact finder (judge or jury) that their side of the story is true. If they fail to do so, they lose the case.

Social Media as Evidence of Liability

The interaction between social media and lawsuits involves the use of social media information as evidence. Individuals involved in accidents sometimes share details about their lives, activities, and well-being on these platforms. Attorneys, insurance companies, and opposing parties use this information to strengthen or undermine a case.

Social Media Example 1

Consider a plaintiff who posted in the past about their involvement in a prior accident. These pictures are available to defense attorneys as part of the discovery process. They most likely would use these photos to question the causal relationship between plaintiff’s injuries and the accident in question. If, as part of discovery, plaintiff stated there were no prior accidents, plaintiff’s credibility will also be called into question.

Social Media and Lawsuits Example 2

Consider a motor vehicle accident defendant would regularly posts videos of himself bobbing and weaving through traffic at a high rate of speed. These posts are also discoverable and could be used to establish a pattern of reckless behavior.

Social Media and Lawsuits – Evidence of Damages

Social media can also influence the assessment of damages in a personal injury lawsuit. Plaintiffs seeking compensation for physical and emotional distress may find their claims challenged based on the information available on social media.

Social Media and Damages Example 1

Consider a plaintiff claiming emotional distress and trauma after a car accident posts pictures or updates showing them enjoying social events without signs of distress. The defense could argue that these activities contradict the alleged emotional suffering. While these pictures may not be enough by themselves, it’s possible that with other evidence, a fact finder can be swayed.

Social Media and Lawsuit Damages Example 2

Consider a plaintiff claiming severe and permanent physical injuries who posts pictures of themselves engaging in physically demanding activities after the accident. Defense lawyers will use these posts to question the severity of any alleged injuries, their permanency, and their impact upon the plaintiff’s quality of life.

If You Have Any Questions, Call 888-964-2224

WE ARE HERE TO HELP YOU!

Preservation of Evidence

Attorneys often advise their clients to be cautious about their social media activity during ongoing legal proceedings. As stated above, posts, comments, or even private messages can be used as evidence. Clients should also be aware that deleting social media while involved in a lawsuit can also have consequences.

If, during litigation, a plaintiff deletes social media content relevant to the case, such as posts about the incident or related injuries, this could be considered spoliation. Spoliation is the deliberate, accidental or negligent destruction of relevant evidence. Not only will plaintiffs face damage to their credibility if posts are deleted. Some can even be ordered to pay fines if social media posts are destroyed during a lawsuit.

Social Media and Lawsuits Takeaways

While social media provides a platform for individuals to express themselves and connect with others, it also presents challenges in the context of personal injury lawsuits. Both plaintiffs and defendants should exercise caution and be mindful of the potential impact their social media can affect their lawsuits. Attorneys might want to advise clients on the prudent use of social media during lawsuits to avoid compromising the strength of their case. As the digital landscape continues to evolve, the legal system must adapt to effectively navigate the complexities introduced by social media.

Thank you for your interest in Fair Rate Funding.

IMPORTANT: This and all articles contained on the Fair Rate Funding lawsuit loan blog are intended for information purposes only and is not intended to constitute legal advice. Consult with a lawyer for any legal issues you may be experiencing.

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