Do You Need Pre-Settlement Lawsuit Funding?

The cost of being involved in a personal injury lawsuit can be financially devastating for plaintiffs, as they often wait years before they receive an award. One way that plaintiffs can cover their expenses during a legal battle is through litigation funding such as pre-settlement funding. Such legal funding offers plaintiffs money before their lawsuit is finished, so they can make ends meet without worrying about financial ruin. Some plaintiffs in personal injury cases are unable to work because of their injuries and face high medical bills, making lawsuit funding incredibly helpful.


Pre-settlement funding has become rather commonplace in the legal landscape; typically, pre-settlement funding is offered in cases that involve personal injury or wrongful death, where the plaintiff faces a loss of income and/or high medical bills. Because litigation can take years, lawsuit funding can provide the plaintiff with funds to cover necessary expenses while the litigation proceeds.

While lawsuit funding can be quite helpful to a plaintiff, there are some attorneys who simply do not like lawsuit funding. They argue that it is too expensive, that the plaintiff might forget about the obligation at the end of the case, or that rapidly escalating charges might pressure an attorney to compromise a case to avoid funding increases. These attorney-critics feel that if lawsuit funding must be provided, it should be obtained in the smallest amount possible.

Those who have significant experience in providing lawsuit funding would, surprisingly, agree with most, if not all, of these arguments. Legal funding can be expensive, the plaintiff does, sometimes, forget that he received assistance, and some attorneys do feel pressure to settle to avoid funding increases. And, absolutely, lawsuit funding should be obtained for the least amount needed, not for any amount the plaintiff desires. Pre-settlement lawsuit funding should be used only when a plaintiff is having difficulty managing his financial obligations while his lawsuit is in progress; it is not "fun money".

Pre-settlement litigation funding is provided by a lawsuit funding company to a plaintiff before a settlement or award is won, with the expectation that the plaintiff will ultimately receive money from his lawsuit. The settlement funding provides the client immediate access to money, so that he can cover his expenses while in litigation. The plaintiff is not required to pay the money back until the settlement is reached or an award is won in his lawsuit.

Pre-settlement funding companies determine the amount of funding to provide to the plaintiff based on an assessment of the case being tried and the likelihood that the case will decided in the plaintiff's favor with an appropriate settlement or award amount. Lawsuit funding is offered as non-recourse funding, meaning plaintiffs only pay back the money if they receive settlement money from their lawsuit. Funding is paid back with interest, although the amount of interest charged varies.

The main focus of a lawsuit funding company is to provide strategic cash advances to cash-strapped plaintiffs, who, through no fault of their own, find their physical and financial lives turned upside down by an injury accident. These lawsuit cash advances are collateralized only by pending litigation; if the lawsuits fails, the advances are excused--the plaintiff does not have to pay back the loan. A lawsuit funding company is not part of a law firm.

Pre-Settlement Legal Funding Request

If you or a loved one is interested in additional information on Pre-Settlement Funding, please click the link below and your request will be sent to a legal funding professional who will evaluate your request at no cost or obligation.
Last updated on May-24-12