Before the emergence of the Legal Funding Industry, little attention was paid to how injured plaintiffs managed financially while waiting years for their cases to be resolved. In addition, there was a distinct disadvantage in the settlement and overall litigation process for those who could not afford the luxury to wait for their attorney to reach a proper and just resolution of their case.
There are a number of ways by which a plaintiff in a lawsuit can benefit from using the Legal Funding Industry. Some of these can be listed as follows:
- The use of the Industry to fund needed surgical procedures for the plaintiff who would otherwise have no way to pay for it, thereby getting the needed medical procedure to improve his health and his own quality of life is a very common and positive benefit.
- Stopping a foreclosure action or an eviction from occurring is another positive benefit. Ethics rules preclude an attorney from advancing money to his client. In statistics from one of the larger firms within the Industry, over 62% of the funds provided to plaintiffs go to stop a foreclosure or eviction action. Giving the plaintiff an advance to stop such action not only gives them the peace of mind to continue the case but allows their attorney time to get them the settlement that they deserve.
- Another positive benefit is that by giving the plaintiff the needed funds to stop that eviction, to allow their child to stay in college when the tuition bill comes due, or to cover a delinquent child support payment provides them with the staying power to let their attorney adjudicate the case in their best interest.
- Although litigation funding provided by a local bank would, in principle, be very good for plaintiffs, unfortunately, the credit risk in most cases involving an injured plaintiff, who is possibly jobless, is simply not acceptable to a bank. The banker sees the possible future proceeds of a case as insufficient collateral no matter what is predicted to be the outcome. They do not care why the plaintiff is out of work or why his FICO score dropped as a result of his accident. |
