Class action lawsuit pre-settlement funding can provide much-needed cash now when the legal process can take years. Involving numerous plaintiffs, class action lawsuits are notoriously time-consuming and hard to settle. Pre-settlement funding can cover your medical bills and living expenses until the case concludes. It also gives attorneys a chance to negotiate a higher settlement rather than have clients settle for less.
How Class Action Lawsuits Work
Also referred to as a mass tort, a class action lawsuit involves many plaintiffs (collectively a “class”) who were injured or sustained losses due to a single product or business. Class action lawsuits often arise from defective product claims. However, they can also involve fraudulent business practices, scams, investment fraud, or violations by an employer.
Once the legal process begins, several steps must be followed before the case is resolved:
- Obtain a Class Certification: The plaintiffs, or class representatives, present their issue to an attorney; the lawsuit can move forward if the court approves the motion for a class certification.
- Class Members Are Given Notice: Upon court approval, those considered part of the class are informed about the lawsuit by mail, email, or public notice.
- Class Members Can Opt-Out: Opting out of the suit or settlement allows plaintiffs to file separate lawsuits. Otherwise, anyone who bought the defective product or had information exposed due to the data breach in question is automatically included.
- Attorneys Pursue a Settlement or Verdict: After class certification and the notice period, the attorneys in the lawsuit present their case. Both parties can agree to a settlement. Or, a jury will deliver a verdict.
- The Settlement Is Approved: Once a settlement is agreed to, it’s confirmed in a final approval hearing, which is typically scheduled after claims are submitted. Settlements are rarely rejected by the court.
- The Payment Is Distributed: Settlement payments are distributed to class members after appeals are addressed, legal fees for the attorney are taken out, and class representatives are paid.
Eligibility for Class Action Lawsuit Pre-Settlement Funding
To borrow money on a future settlement, the plaintiff(s) must be injured enough to be unable to work or cover living expenses. One can borrow up to a certain percentage of the expected settlement amount. Credit scores, the financial status of plaintiffs, or their income are not factors in approval decisions. Approval and the funding offered are dependent on the strength of the lawsuit and the cost burden of the injury.
Advantages of Class Action Lawsuit Pre-Settlement Funding
While the goal of the lawsuit is to compensate plaintiffs for their injuries or losses, cash awards typically aren’t received for some time. Class action lawsuit pre-settlement funding has these benefits:
- Plaintiffs can see less of a financial strain, allowing them to pay bills and cover other expenses.
- It provides a source of income if an injured person is unable to work due to their injury.
- A plaintiff’s credit history is not a factor in the lender’s approval decision.
- There’s low risk compared to a bank loan, which requires monthly payments plus interest regardless of whether your case wins or loses.
- Plaintiffs don’t pay the funding company back if their case doesn’t win.
- Attorneys can negotiate a higher settlement offer and seek justice for the parties who are liable for the damages.
- Pre-settlement funding has no effect on the future settlement amount.
How Pre-Settlement Funding Works
Obtaining pre-settlement funding often involves applying online. Applications are generally simple and require information about the plaintiff, their attorney, and the case. The funding company will then discuss the facts of the case with the attorney. This allows them to determine the validity of the claim and the chances of winning. Plaintiffs with stronger cases are more likely to be approved.
Once the applicant is approved for funding, they’ll receive an offer. They can accept or reject it, or take a lesser amount depending on their needs. The funds can then be quickly transferred to their bank account for immediate use.
Risks and Limitations of Pre-Settlement Funding
Class action lawsuit pre-settlement funding can be helpful during hard times. However, it’s not always the best option. Here’s why:
- Lawsuit funding isn’t subject to the same regulations traditional loans are.
- Interest rates are often very high and dependent on the risk the lender takes.
- Legal funding companies tend to be picky about the cases that qualify.
- A lot of legal paperwork is required to evaluate your case.
- Funds are paid back out of your settlement, reducing the amount you receive.
- Depending on the state, the lender must comply with laws on interest rate limits and loan term disclosure.
- Finding a reputable lender can be challenging.
Class action lawsuits are complex and require many steps. Therefore, plaintiffs must often wait years to be compensated. But class action lawsuit pre-settlement funding can provide the financial support they need now. Nonetheless, it’s important to carefully consider your options, as not all cases qualify for legal funding and, depending on the circumstances, it can cost you more in the long run. Do your research and compare different lenders before signing off on any agreement, and discuss your financial needs with your attorney in advance.
Apply Today with Fund Capital America
We provide hassle-free, non-recourse legal funding. Therefore, plaintiffs aren’t pressured to settle their lawsuits sooner and have a better chance at getting fair compensation. To receive class action lawsuit pre-settlement funding, apply now online. Call 855-870-2274 for more information.