How Litigation Funding Helps Medical Malpractice Plaintiffs

As more parties take advantage of litigation financing, the benefits of such financing are becoming more readily apparent.  That is certainly the case with medical malpractice cases.

A recent study, along with anecdotal evidence from attorneys, shows that litigation financing helps create more opportunities for deserving plaintiffs and produces better outcomes.  The study was undertaken by researchers from Vanderbilt University, and it examined the effect of litigation financing on a wide variety of consumer litigation, including personal injury and medical malpractice cases.  According to the study, after Ohio legalized litigation financing in 2008, medical malpractice plaintiffs there received judgments and settlements that were 13.3 percent higher, as compared to all other states, which were assembled in a “synthetic control group.”  The study’s findings suggest that the promised benefits of litigation financing are realized in practice.  That is, when a plaintiff has access to litigation financing, he or she can resist low-ball settlement offers made at the outset of the case.  In addition, plaintiffs with litigation financing can afford to pay for first-rate experts who can demonstrate the merits of their claims.  All of this leads to better settlements and favorable jury verdicts.

The attorneys who represent medical malpractice plaintiffs agree that litigation financing improves their ability take meritorious cases and to try them to achieve the best possible result. Because they take so many cases on a contingent fee basis, many plaintiffs’ firms often have cash flow issues.  When they are uncertain about their cash flow, such firms may decline cases that seem to require large expenditures for discovery and expert testimony.  But when a plaintiff can obtain litigation financing, that is not an issue.  As one attorney put it, “I basically never have to worry about whether I have $10,000 available for an expert to testify at my trial.”

In medical malpractice cases, as in many other kinds of cases, defendants often have an enormous advantage because their litigation expenses are paid by insurers.  But litigation financing levels the playing field for plaintiffs up against those defendants. Referring to litigation financing, one plaintiff’s attorney noted that “it allows us basically to go toe-to-toe with the insurance company in any case,” he said. “We have the funding available to get whatever expert we need in the case and match the unlimited spending that the insurance company has.”


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