Litigation Funding: What Every Plaintiff Needs to Know

Pursuing a lawsuit might deplete your finances, but you don't have to go bankrupt for justice to be served. Obtaining litigation funding can serve as the financial lifeline for your case and your living expenses. Litigation funding bridges the gap between your accident date and the settlement date allows you to receive cash advances throughout your case. It is available for all types of cases including medical malpractice, personal injury, wrongful death, and employment discrimination.

Litigation funding is a process where plaintiffs get money from a lawsuit loan firm, who takes a part of the suit's proceeds in exchange for cash now. Funding is given on a non-recourse basis, meaning that the money you receive will be yours even if your case has a negative outcome. Lawsuit loan companies generally give funds to those who have a strong case since they view the cash advance as an investment. Should you win, the firm get a percentage of the money given to you by the court; whereas if you lose, the firm receives nothing. Litigation funding therefore presents no risks on your part because you don't have to repay the company if you do not win your lawsuit.

Before choosing a funding firm, do not hesitate to ask questions about their practices, fees, and the conditions involved. The American Litigation Finance Association has some tips you can use to help find a funding firm that will suit your needs.

Make sure you deal with a company that invests for its own portfolio, or you could end up paying more money than necessary.

Do not supply the firm with more information than it needs. Privileged information should be kept between you and your lawyer.

Always consult your attorney before signing any complex funding contracts as there could be clauses in fine print that you may not understand.