The Role of Litigation Funding Companies


Litigation funding companies are financial businesses that lend money exclusively to plaintiffs prosecuting a litigation to recover financial claims. Litigation funding is generally associated with personal injury claims arising our of motor accidents, wrongful deaths, legal/medical malpractice, work place accidents, product liability or other forms of negligence etc. Litigation funding may not therefore be available for every type of litigation.

Why Litigation Funding

The earliest settlement in an auto accident lawsuit tends to be anywhere upward of 1 year. The average however is between 18 and 24 months and the plaintiff has to find money for legal fees in addition to all the sufferings he is undergoing. Insurance carriers/assessors in the meantime will continuously persuade the plaintiff to settle for amounts way below what a court could possibly award considering the circumstances of the accident and the party at fault. But, when you are really fighting it hard to balance between possible loss of earnings, mounting medical expenses and dwindling savings, you opt for a settlement rather than being haunted by credit card companies and other debtors.

Litigation funding comes to your succor in such situations by lending you some money in the nature of a cash advance taking your attorney’s assessment of the lawsuit as the only collateral. No credit check or income verification is necessary for litigation funding companies to approve your loan. Further, in the extreme event of the opposite party winning the law suit, you are not obliged to pay back your loan.

Making Litigation Funding Easy for You

Your attorney’s assessment of the law suit impacts the approval of cash advance by litigation funding companies. Therefore, if you have opted to prosecute the case on your own, you may find it difficult to provide an impressive assessment of the law suit. That brings into focus the need to appoint a competent attorney to prosecute the case in the first instance. Experience shows that plaintiffs who chose this route have received significantly higher awards compared to those who fought their own suits.

On the flip side, the litigation funding companies are at a higher risk lending against a possible settlement. Remember, if you lose, you don’t repay the cash advance. Most other forms of cash advances are fully secured through a wide range of collaterals depending on the type and size of the loan. These lenders are therefore happy to charge you affordable rates of interest. Litigation funding companies on the other hand may charge you more because of the inherent risk in the business. You should expect to pay close to 3% per month or more for cash advances made by litigation funding companies.

Keeping it to the Minimum

The focus of most litigation funding companies is on loans between $500 and $5,000. Higher amounts may be possible in exceptional situations though. One way you can benefit from litigation funding without the overwhelming costs is by keeping the cash advance a tad lower than what you really need.


Call Us Today 866-WE-FUND-U / 866.933.8638


About the author
Michael Smith is the Customer Experience Director at 911 Lawsuit Loans LLC and is responsible for client relations throughout the funding.
Author:Mike Smith