Legal funding may be used for different kinds of civil lawsuits, and based on studies, more and more litigants and even law firms are resorting to it. Legal financing can be applied in different cases, although the following are the most common. Note that this is a general guideline as the process may vary from state to state and country to country.
Legal financing is often used by plaintiffs in lawsuits involving personal injuries to cover medical bills and living costs while awaiting a court award or settlement. Usually, personal injury lawsuits have subsets including accidents. Vehicular accidents, slips, falls and other injuries can be costly, and legal financing can be of help here as the case goes on.
Wrongful termination and worker’s compensation can also benefit from legal financing as plaintiffs are often out of work while waiting for a settlement, so legal funding can definitely help. The same situation applies to medical malpractice lawsuits as it usually means the plaintiff cannot work.
Litigants in divorce cases may also receive legal financing in exchange for a sum or interest once the financial assets are settled. In addition, legal financing can be valuable in product liability cases as manufacturers often try to drag these cases on for years. With legal financial assistance, plaintiffs will be able to pay for expenses incurred during the proceedings.
Attorney Legal funding
Attorney legal financing allows lawyers to receive a cash advance before the case settles down, and may include pre and post settlement funding. Funding may also include secure lines of credit. Lawyers can also use legal financing to cover the expenses of class action lawsuits and complex, multi-plaintiff cases.
Commercial Litigation Funding
Legal financing can also be used by companies involved in legal disputes to cover for the expenses, allowing them to save on money and concentrate on growth and investment.
Patents and Intellectual Property
Cases involving patents and intellectual property rights can take a long time to resolve, incurring heavy expenses as a result. Because many of these companies don’t have the means to fund these cases, legal financing can be of assistance.
One of the more practical applications of legal financing is for whistleblower cases, wherein a private citizen brings up a case against a company for committing illegal acts. Usually the plaintiff is an ordinary citizen who doesn’t have the financial capability for long drawn cases. With the aid of a third party, they’ll be able to shoulder various expenses.
There was a time in the past when litigation financing was very expensive, but competition among these services has reduced the cost significantly. But more than the reduced cost, legal financing third party services were created specifically for dealing with these cases, something that banks can’t do.
Unlike banks and other finance institutions, legal funding companies specialize in lawsuit valuation and how it is financed. For attorneys and litigants, legal financing is a very attractive option as it provides protection from debt, something that can happen in lengthy legal cases.