How Pre-settlement Funding Provides A Lifeline For Lawsuit Plaintiffs

by | Aug 18, 2021 | Finance Litigation

Plaintiff settlement funding loan Advice for those who need a guide pre or post settlement. When dealing with a personal injury settlement finding a firm that provides capital to plaintiffs to bridge the gap till they receive their settlement funding can make a big financial difference. We explain the process below. 

Wrongful termination from work, wrongful death, personal injury, breached contract, property damage, a car accident where the other party’s insurer isn’t willing to pay — they’re many reasons why you might be contemplating filing a lawsuit. Maybe you’ve even gone to court already and gotten the process underway. No matter your circumstances, there’s one thing you need to keep in mind; legal action can be expensive. Your ability to secure a favorable outcome — in the form of either a settlement or bench award — could come down to whether or not you can foot the bill.

Now, you’ll be relieved to know that there’s a way to secure the funds you need to that end. But before we get to that, let’s look at the various costs involved in filing a lawsuit.

Breaking Down the Costs of a Lawsuit

Hiring a lawyer is usually the biggest expense a plaintiff incurs when pursuing legal action. If you can find one who’s willing to take your case on contingency, that will obviously take a huge burden off your shoulders. But there are still a few things you’ll need to pay for, and which are not included in the contingency arrangement:

– Filing Fees: This is the cost of filing various case documents with the court. The amount varies in the low-to-mid 3-figure territory, depending on the jurisdiction and the specifics of your case.

– Service Fees: Besides filing with the court, you’ll also need to serve the case documents to the party you’re suing. And rather than hand them over yourself in person, it’s recommended to engage a professional process server; this will cost about $100 or so.

– Discovery: Your attorney will need to talk to witnesses and request information from the other party as they gather the evidence needed to build a solid case. Discovery costs can vary widely depending on how many witnesses/documents are involved, and how much time the process takes.

– Expert Witness Fees: Your lawsuit could use the testimony of at least one qualified expert who can fortify your arguments — make no mistake that the other side will engage expert witnesses of their own. These experts will usually charge hourly rates for their services. Depending on the profession and time spent on your case, the fee could amount to a few thousand dollars.

– Miscellaneous Expenses: Additional expenses you’ll need to account for include travel, document processing, and so on.

Ultimately, it’s your responsibility as the plaintiff to pay all these costs as they arise — to ‘fuel’ the lawsuit, if you will. And chances are that you have additional expenses to keep up with as litigation proceeds in court; hospital bills, car repair, and so on depending on what you’re suing for. Combine that with the cost of standard upkeep, and it becomes clear that you could use a lifeline.

Of course, you’re hoping that your case gets resolved quickly so you can take care of all these things and get back to your normal life. But that’s not how lawsuits work — not if the outcome is gonna be in your favor anyway. Court cases can take months or even years to complete. To add salt to injury, the other party has no incentive to “play ball” and bring the matter to a conclusion speedily.

What they’d rather do instead, as a matter of fact, is to drag their feet for as long as possible; hoping that you’ll be tempted to settle for less than you deserve as the financial pressure mounts. More significantly, they’ve hedged their bets on the likelihood that you’ll find the process to slow and expensive, consequently giving up altogether. Which is obviously the last situation you want to find yourself in.

So, as highlighted earlier, having the means to both fuel your lawsuit and attend to your other obligations can make a huge difference in how your case finalizes. And it’s at this point that a plaintiff settlement funding loan comes into the picture.

What is a Plaintiff Settlement Funding Loan?

This is a form of financing offered to plaintiffs whose lawsuits are proceeding in court, and which are ripe to yield a favorable settlement award. It’s also known as litigation funding/lawsuit loan/pre-settlement loan — although, the latter two terms are actually misnomers. This isn’t a loan like the one you’d borrow from a bank or similar institution.

Pre-settlement funding is offered on markedly different terms, the most significant of which is that it’s non-recourse. The lender, instead of actually providing a loan, is purchasing a right to a fraction of the expected settlement/award. You get the funds you need to keep your lawsuit going and pay for other expenses upfront, on the condition that you’ll pay back once the proceeds come through. Should the case end up losing, the money will simply be forfeited.

Another notable feature of litigation financing is that there are no credit checks, or any of the stringent processes involved when one applies for a normal bank loan. In essence, the lender’s only interested in whether:

– Your case is based on a solid claim

– You’re being represented by a qualified attorney

– The lawsuit has potential to win in court, or compel a settlement offer from the other party

– You’re eligible for monetary compensation (and how much for)

Most lenders will have no problem funding you as long as you meet all these conditions. We should also highlight that pre-settlement advances have very quick turnaround time. While a traditional bank loan can take weeks before your application gets processed, litigation financing providers will usually get back to you within a couple of days. The money could even be made available to you the same day — lenders understand that time is of essence as far as lawsuits are concerned.

Financing Your Lawsuit With a Pre-Settlement Advance: Should You Do It?

Here’s one thing no one tells you about being the plaintiff in a yet-to-be-decided lawsuit: It’s incredibly nerve-wracking. On the one hand, you have a very good understanding of how you got here; maybe you’ve even familiarized yourself with a few statutes that are relevant to your case. On the other hand, you know that justice is a double-edged sword, and nothing is guaranteed.

Having such thoughts running through your mind as you struggle to raise court fees and other lawsuit costs isn’t healthy. But life doesn’t wait now, does it? You still have your living expenses to take care of. And as much as you’re looking forward to for a quick outcome, you want your lawyer to do everything it takes to get justice.

It’s the high time you considered taking out a pre-settlement cash advance. Having the funds to take care of your pressing obligations will take a great deal of stress out of your situation. More importantly, the funds will allow your attorney gather evidence, recruit expert witnesses, and subsequently build a watertight case. Not to forget the need to file court papers in time — statutes of limitation impose strict deadlines on when this needs to be done. With litigation financing, there’s no risk of missing out as you try to raise filing fees, and forfeiting your claim as a result.

Kick-start Your Quest for Justice With Litigation Financing

It’s evidently clear that you have nothing to lose and everything to gain from seeking litigation financing. Besides helping you prepare and present a solid lawsuit, the money will also allow you pay your bills, and the other side’s low-ball offers won’t be as tempting. And because it’s non-recourse, there’s no risk of putting yourself in a precarious situation if the outcome is unfavorable.

But perhaps the best thing about pre-settlement funding is that it’s available even when other options aren’t forthcoming. Thanks to the lack of credit checks, anyone can qualify no matter how their financial situation looks; all without wasting precious time waiting to see if the application went through. And for what it’s worth, providers will be more than happy to answer any queries you might have before committing to the arrangement. No reason why you shouldn’t get in touch with one today.

Jessica Diaz, CFA

Financial Advisor

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• Masters in Business Administration

McGill University

• B.S. in Business Administration

University of Colorado


• Corporate Finance Advisor

8 Years

• Personal Finance Advisor

11 Years