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Everything to Know about Litigation Financing.
When you are in a lawsuit, you look forward to the results turning in your favor. Litigation funding is a situation where a third party not related to a case in any way provides funding to the plaintiff or the lawyer handling the litigation procedure for the case. The merit of your case is the factor that will determine whether you will have the lawsuit financing you need or not because the person funding you needs to know he will have his money back.
Its important for the company to look in to the lawsuit itself when financing the case because the money is not a loan. It is better to look at a lawsuit financing as an assignment of the portion of the client in an event that they win the case that is at hand. This is to clearly mean that if a case is lost the money that the lawsuit financing had offered gets lost as well. When it comes to a case being financed, some may question on the ethical nature of a lawyer referring a client to a lawsuit financing party.
Yes it is ethical if a lawyer refers a client to a lawsuit financing company provided they have no interest in the financing company. To polish off on the ethical requirements, the lawyer should not in any way profit from the transaction that is going to happen. The company that is financing the case should not be involved in the lawsuit in a way that it will benefit if the case is lost by the client. When the lawyer refers the client to the financing company , there are benefits for all the parties involved , some too obvious. It’s definitely a welcome intervention if a client will secure funding especially if there was no way to raise the money before the lawsuit financing company. Lawsuit companies come in handy especially if the client has no way to raise the money needed to finance the lawsuit that they are involved in . To secure pre-settlement advance, you have to undergo a process but it’s not complicated. Litigation companies will require you to fill some application to help them evaluate the case at hand.
The litigation funding company will weigh the merits of the case and if any questions arise, the attorney representing the company will be called upon to answer the questions. The decision on whether the case will receive some funding is made within 24 to 48 hours of receiving the documents of the case. If the case is accepted, the attorney will receive a contract outlining some details on rates and transactions charged and on how they will receive the money from the client. Sometimes litigation financing will be a post settlement advance , this means that a case has already been settled. The need to get financing for already settled cases may be motivated by reason of court order approval, insurance companies dragging, Medicare resolutions or other reasons that are time consuming.