With the explosive growth and high decibel advertising by litigation funding companies, it is very easy for clients experiencing monetary problems to rush into contracts without adequate consideration of the various factors. Any litigant intending to pursue loans from a lawsuit financing company will do well to examine the following issues to ensure the most rational decision.
Why Do You Require the Money?
Since lawsuit loans can be extremely expensive you must really examine very carefully the exact reasons why you are considering this route. You should ideally exhaust all other possibilities of arranging funds before approaching a litigation financier and then only if you are in dire financial distress. These factors could be issues such as not having enough for daily subsistence, eviction from rental premises or the bank foreclosing the home mortgage. Recourse to external funding may also be required to take care of vehicle repayments or medical care, without which, it would not be possible for you to lead a normal existence. You should carefully analyze the urgency of your requirement and only if there is an inability to arrange the funds through other means, should you think of approaching a legal finance company.
Is Funding Likely To Increase the Settlement Value?
If you are financially distressed then in all probability you would be inclined to accept the first offer of settlement that you receive through your lawyer. Speak to your lawyer and find out if there are chances of being able to significantly raise the settlement value by holding out for a longer time. You can take a litigation loan to give yourself some financial stability so that you can continue to pursue your claim to get a substantially better award or negotiate better for a superior settlement. However, you need to chalk out your strategy in consultation with your lawyer and the merits of the claim rather than just an overriding emotion of getting back at the defendant. There is little point in fighting cases where the award is not going to substantial.
Will You Get Adequate Funding?
You need to appreciate that irrespective of the amount of your requirement, funding decisions are made according to parameters such as merits of the claim, reputation of the defendant, place of the claim, time expected to reach a conclusion as well as legal precedents. Ideally the best you can expect from a litigation financier is one-third of the projected value of the case. It is best not to exceed this as you will end up getting virtually nothing after settling with them and your lawyer. Litigation finance should ideally be restricted to cases with substantial projected values where the loan requirement is in comparison relatively small. It is also wise to find out what sort of compromise formula the financing company will agree to if the settlement is done for a value that is substantially less than its projected value due to any mitigating reason. Do not deal with financing companies that are not ready to adjust for such compromises. Lawsuit funding is a fast evolving and largely unregulated industry, hence you must take care to carefully examine the contract and be mentally prepared for what it entails. You may browse through official website of Top Consumer Reviews for more detailed information on lawsuit funding.
Will the Lawsuit Company Interfere With the Handling of the Claim?
When discussing the case details and the contract with the litigation financier, it must be explicitly made clear that they should not at any point of time put pressure on the client or his lawyer on any aspect of the litigation such as strategy, trial preparation and negotiations that will interfere with the client’s right to obtain the best possible award or settlement. It is essential for you to make it clear that apart from periodic status updates, you or your lawyer will not be continually discussing the case details with the loan company. Make it clear that the status of the loan company is just that of a provider of funds and nothing more. The lawsuit company also cannot question the end use of the money that is provided to the client.
Author: Jake Simmons is the chief correspondent of a prominent legal journal. He writes extensively on new developments in litigation and in the legal environment. He is widely followed on the social media for his incisive observations and he often shares his knowledge on Top Consumer Reviews that is of immense help to the layman.
