Pre-settlement litigation funding is a non-recourse
cash advance, provided to an injured person in return for a promise
to repay the advance after you win your lawsuit. The advance covers
medical and health care related costs, expert witness, research, and
attorney fees. Ideally, the suit should be at least 4 months old with
the likelihood that it will settle in no more than 18 months.
The pre-settlement funding source would fund the
client approximately 10-20% of the expected judgment in return for a
lien against the entire award remaining. This lien follows any lien
placed on the case for attorney or medical fees. By keeping the funded
amount small, and by getting involved after a certain amount of time
has passed, the actual cost to the client is very small relative to
their increased gain.
How Does Pre-Settlement Funding Work?
An injured person contacts us, sometimes at the suggestion of their attorney. After receiving permission
from the client, we contact the attorney handling the case to obtain
information about the case. Based on this information, we estimate the
value of the case and the risk involved, and offer a cash advance to
the plaintiff based upon that estimate. The fee may be a flat fee or
a monthly percentage fee that accrues each month. These advances are
non-recourse: the fee is paid after the case settles, and only
if the client wins a judgment. The amount advanced varies, depending
upon the nature of the case, insurance company involved, how long the
case has been active, and the expected settlement date.