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.
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.
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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.
