Litigation, and even access to an attorney, is inherently expensive. This is not because lawyers like charging high fees, although they must bill for their time. Research, depositions, court motions, witness preparation, subpoenas, and other factors such as court fees and the need for consultants all come with costs. Oftentimes a personal injury plaintiff cannot afford to pursue their claim and abandons their case before a reasonable settlement can be reached.
Litigation financing makes litigation accessible to individuals who aren’t wealthy or who may be unemployed or otherwise disadvantage due to an accident-related injury. Also known as legal funding, it is provided by a third-party lender. But unlike a lawsuit loan, the proceeds aren’t paid back unless the plaintiff obtains a financial recovery from their settlement. The cash received is an advance on their future settlement, although if the case doesn’t win, the claimant doesn’t owe any money.
When Did Litigation Financing Come About and How Does It Help?
Legal funding isn’t necessarily new, but it has come into the mainstream in recent years. It has been around for at least a couple of decades. Intended to allow equal access to the legal system, a lawsuit cash advance can help directly pay for legal costs or even personal expenses such as rent, medical bills, and even groceries.
Oftentimes insurance companies put pressure on litigants in the hopes they’ll settle earlier for less. With litigation financing, individuals can afford to pursue a settlement while meeting their personal expenses. It can help companies deal with litigation costs and manage their balance sheets as well. Also, top lawyers are more accessible. For attorneys and law firms, it is possible to work with plaintiffs who otherwise couldn’t afford their fees, obtain capital for litigation expenses, and who may be at risk of running out of money during a case.
Is Litigation Financing Legal?
The concept of providing financial support for legal disputes goes back to medieval England. For a time, there was a prohibition on the practice, but this eventually was considered obsolete as more effective ways for controlling abuse of the legal system came about. One can now seek legal funding without abusing the attorney-client privilege, which protects communications between attorneys and their clients from disclosure. Therefore, a lawsuit funding company in Los Angeles can obtain information from the plaintiff without concern over violating this privilege.
Some state legislatures have more recently issued rules for disclosure of terms and caps on interest rates. But legal funding is largely unregulated. Plaintiffs are free to apply for financing without the typical barriers to getting a loan. At FCA Legal Funding, there is no credit check, so having poor or no credit will not affect an applicant’s eligibility for financing. Income or employment are not factors either, since the cash advance is paid back later with the settlement proceeds and not with cash out of pocket or from one’s bank account.
How Do I Get Litigation Financing?
Apply for litigation financing is simpler than most people think. First, you need to have a personal injury attorney working on your accident claim, but a settlement cash advance isn’t used for paying your attorney up front, because accident lawyers aren’t paid in this manner. FCA Legal Funding provides an online form that requires just some basic details of an accident, plus your attorney’s contact information. Same day funding is available; once we discuss the case with your attorney, you can receive your lawsuit cash advance within 24 hours.