In New Mexico, an individual by the name of Dawn had run out of gas. She had driven her tank dry after she rushed herself to a hospital emergency room for what would wind up being a panic attack. Dawn was older and suffered from injuries that were caused by a faulty medical device and believed she need immediate help. Gripped by fear, and a lack of resources, she pulled some coats over herself and attempted to sleep near the hospital.
Someone saw her, gave her gas money and some food vouchers. However, they warned her to not stay long because she might get arrested for vagrancy.
Dawn was owed a substantial amount of money from a settlement deal over the faulty medical device, but the payout would take a year. This promised money did not do her good when it was most needed.
For an individual like Dawn, litigation finance could have saved her a lot of stress! Litigation finance could have paid for her whole lawsuit and immediately dealt her money to live off of. Her visit to the hospital would not have had to end with her sitting in her car, unable to pay for help.
However, this saving grace may come at a price. One individual says that litigation finance interest rates can reach as high as 40%. Financers rationalize this by saying that that is the price that is payed for them taking a risk on financing an individual’s case. How is there a risk in financing an individual’s case? Well every case is funded on a non-recourse basis. This means that if the individual loses, nothing is owed to the financer.
Several states have actively outlawed this practice. Others have specifically allowed it. However, for individuals like Dawn, it can provide a valuable resource for individuals who need help the most. Ultimately, it is up to the client whether this is too much!
Keywords: litigation finance, saved, interest, non-recourse
Work Cited: Brandon Lowrey, How Litigation Funding Can Save, and Doom, Poor Plaintiffs, Law360 (May 13, 2019)