Class action Lawsuit loans are designed to provide working funds to attorneys litigating a class action suit. Protracted delays are inherent in a class action suit and an attorney has to wait for several years before he/she can lay hands on the fee and expenses post settlement. In most instances, defense will be supported by deep pockets adept in the use of delay tactics. Over the prolonged period, the plaintiff’s attorney can become cash strapped, impacting other lawsuits he/she is handling apart from the class action suit itself. To help overcome this situation, the financial industry has introduced the innovative product class action lawsuit loans.
Class action lawsuits are generally high value suits and unlike with other lawsuit loans, only the attorney litigating a class action suit can benefit from this type of loan except in rare circumstances where an individual plaintiff may be considered for this loan. In most class action lawsuits, plaintiffs are represented as a group making it impossible to single out a plaintiff for the purpose of the loan. Nevertheless, the attorney has to spend money in conducting the suit and taking care of his own basic needs. For attorneys representing multiple suits of similar nature, this situation can become pretty overwhelming in the absence of a healthy cash flow.
Cause of action for class action lawsuit can include:
Class action lawsuits arise when similar circumstances cause harm or injury to a large group of plaintiffs. Typicality, commonality, adequacy and numerosity .are among the conditions that must be satisfied for a lawsuit to be admitted as a class action lawsuit. In a class action lawsuit, the legal process benefits from higher efficiency since a group of people are arrayed as defendants instead of each individual fighting separate legal battle. Given the large volume of settlement payouts under a class action lawsuit, reckless corporates can be forced into better behavior through enforced accountability.
Understand the cost of funding.
Class action lawsuit loans offer great convenience when you are looking to fund a potentially high value lawsuit. The absence of a credit check or income verification makes it even more attractive. The bother of monthly payments will also not haunt you when you are approved for a class action lawsuit loan. But, the risk profile tilts against the lender and therefore the legal funding companies have to factor in their own costs and the absence of a repayment obligation when the lawsuit is lost by the borrower/attorney. As a consequence, class action lawsuit loans tend to be more expensive compared to other forms of credit. The larger size of the loan will also impact the approval process and a very strong case must be made out against the defendants to support the projected settlement. When you are borrowing as an individual plaintiff you could have potential difficulties in establishing that you have a strong case on your hands.
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About the author
Michael Smith is the Customer Experience Director at 911 Lawsuit Loans LLC and is responsible for client relations throughout the funding.