Known by other names such as legal financing, legal funding, lawsuit loans and so on, pre settlement lawsuit financing is a little known concept in personal injury, medical malpractice, accident and other cases. Often times plaintiffs aren’t aware that they can receive funding to pay for pre trial expenses like hiring expert witnesses, conducting extensive witness research and to pay attorney fees.

Who is eligible for pre settlement lawsuit financing?

A person who has been involved in the following types of cases is eligible for a presettlement lawsuit financing scheme.

  • Injured in a car or other auto accident
  • Involved in a medical malpractice case
  • Involved in a wrongful death case
  • Involved in any other kind of commercial litigation case
  • Needs funds to pay for expert witnesses or witness research
  • Involved in a product liability case
  • Involved in an employment discrimination case
  • Injured in the performance of his job
  • Has family or relatives who have been victims of nursing home abuse
  • Involved in a breach of contract case
  • Involved in a fraud case

A person who’s involved in the above types of cases and is represented by an attorney is eligible for pre settlement legal funding.

A person who’s in need of such a loan is obviously one who is in financial hardship, and needs funding to tide the case over until such time as settlement is reached. Very often the financial hardship is due to work time lost as a result of the personal injury sustained in the accident or other situation as mentioned above. Say, for instance, a person who’s filing damage claims after being injured in an accident is unable to work and therefore unable to earn an income. This in turn means he is unable to fork out the sums of money that his attorney will need in order to proceed with the case. This is where pre settlement lawsuit financing steps in.

A presettlement loan is never given for the full amount of the expected settlement. It is usually about 10 to 15 per cent of the settlement amount. The absolute minimum amount is 250 dollars while the maximum loaned amount is a million dollars on a single case. There is no interest charged to the plaintiff in the form of weekly, monthly or yearly payouts. What happens is that fees are accumulated and paid back if and when the plaintiff wins his case and gets a settlement amount.

Typically a lawsuit funding company will not sanction a loan till the case is at least 6 months old. This gives the attorneys ample time to lay the groundwork for the case, collect information and conduct evaluation and other procedures that may take weeks and months.

Pre settlement lawsuit financing is not limited to those with great credit. Even unemployed persons can avail of a loan. However exceptions might be made by some legal funding companies against individuals who run the risk of a pending bankruptcy.

Such pre settlement legal funding can have a direct impact on the outcome of a case. Say for instance a person has been involved in a car accident and because of injuries sustained is unable to earn an income. The resulting financial burden might force him to opt for an early settlement of a lesser amount. Pre settlement funding can help him withhold settlement until his attorney has properly prepared his case and established the groundwork for a favorable outcome and settlement.