Soft tissue lawsuit funding makes up a great deal of the lawsuit funding industry. A large percentage of applicants only apply for a small funding, sometimes less than $1,000. While it may be true that even plaintiffs with very heavy injuries may only require a few additional dollars to meet their needs, the vast majority of these small fundings occur in connection with “soft tissue” lawsuits.
Defining “soft tissue” is not difficult. The term was originally used to describe “whiplash” type injuries sustained in personal injury lawsuits. Soft tissue essentially means that the injury, although severe, essentially involves a strain or sprain of muscles, flesh and body tissue as compared to broken bones, tears to ligaments or other connective tissue, or other more severe conditions.
Imaging equipment such as x-rays, MRI’s and CT Scanners, can show medical problems that exist under the skin’s surface. Conditions such as ligament tears, herniated discs, and fractures are can be examined by doctors using these mediums. Lawyers, medical experts and insurance adjusters are all able to see the extent these physical conditions objectively.
The use of imaging equipment is good news for plaintiffs who are seriously injured, since these injuries can be diagnosed with accuracy.
Insurance companies label injuries without objective evidence (e.g. x-ray findings of fracture or MRI tears) of injury as “soft tissue” injuries. Essentially, a “soft tissue” injury is one where no abnormality can be found in one of the aforementioned imaging studies.
In the remainder of this article, we examine soft tissue personal injury lawsuits and as they relate to the lawsuit funding process.
“Soft Tissue” Defined
As previously mentioned, a soft tissue injury means an injury involving muscles or other tissue such as the typical “whiplash” injury where the patient suffers muscle strain from trauma. Over the years, insurance companies and their attorneys sought to expand this definition a little further. This expansion can have significant impact on an insurer’s bottom line because some state insurance laws (no-fault states) prohibit filing a suit for soft tissue injuries for the majority of the policies written.
Since Fair Rate Funding is based in the State of New Jersey, let’s use NJ as an example. New Jersey’s “No-Fault” statute was enacted decades ago and was designed to provide protection for injured parties in the form of medical benefits. The trade off was that in order to pursue a claim for pain and suffering, the injured party had to show “objective” evidence of permanent medical injury AND that the injury had a significant impact on his/her life (it should be noted that the insured could opt out of what is known as the “verbal threshold” but at a much higher premium payment).
What is “objective” became an issue at that time and was usually defined by a diagnostic imaging test like we discussed above. This standard remained in effect for years.
Recently, and not surprisingly, insurers are pushing to include positive imaging findings such as disc bulging and/or herniations into the ‘soft tissue’ box. And in some jurisdictions, insurers have been persuasive. Although a positive finding in an MRI used to meet the “objective evidence of injury” test in the past, defense attorneys are now trying to remove injuries with these types of findings from the pool of compensable injuries.
What to Expect When Applying for Soft Tissue Lawsuit Funding
In light of the trend toward less and less coverage for these less severe but still extremely painful injuries, lawsuit funding companies mitigate this additional risk in variety of ways.
One way is to eliminate lawsuit funding for soft tissue cases completely. In fact, many settlement loan businesses will not consider automobile personal injury lawsuits for funding without a surgery. Others may only consider automobile cases in which an imaging test has a positive finding of abnormality such as a bulge, tear or herniation.
Another way is to limit the funding amount. When approved, a lawsuit with ‘soft tissue’ injuries are generally approved for settlement loans for $1,000 or less.
Lawsuit funding’s mission is to provide financial relief to litigants while they wait for their claim/lawsuit to be resolved. Applicants often request small amounts of money for their lawsuit regardless of the severity of their injury. If even small amounts of funding reach plaintiffs who need this assistance, then the mission is fulfilled.
Regardless, soft tissue lawsuits require the consideration of different issues for purposes of providing lawsuit funding to plaintiffs.
Thank you for your interest in the lawsuit funding – settlement loan business.