Litigation finance is a helpful tool for many plaintiffs. Here are four ways litigation finance can be useful to parities involved in lawsuits.
First, litigation finance levels the playing field for all people. By that I mean that it promotes access to justice for everyone, including people who otherwise wouldn’t be able to afford it. Litigation is expensive, from fees associated with discovery to attorney’s fees, filing fees, and much more, the cost of litigation would be a strain for most individuals and even some companies. Using litigation finance allows plaintiffs to have more even power when going against a large company.
Secondly, litigation finances helps with risk management. Even when your chances of winning a lawsuit are strong, it is never 100%. There is always a risk in litigation. But when using a litigation finance company it helps to mediate the risk by spreading it amongst all claims that the company is currently handling, thus there is a lower risk when you have a portfolio of claims rather than just one single claim. Additionally, the typical litigation finance is not a loan but a cash advance, meaning that repayment is not required unless the lawsuit is won. This lowers the risk on the plaintiff of worrying about how they will afford to pay back the funder if they do not win.
Litigation finance allows attorneys to do what they do best. If you find yourself in litigation, you want to make sure you have the best representation possible for the situation, no matter what the costs. By using litigation funding, you don’t have to look for attorneys that will take your case on contingency or on some alternate fee schedule. Using outside funding will allow your attorneys to give their best effort to your case.
Lastly, litigation finance may allow for a faster and easier litigation process. Particularly when facing large insurance companies, defendants may try to drag out a case causing the plaintiff to suffer financially or quickly settle for less than what they deserve just so that it doesn’t continue. By involving a litigation finance company, defendants may see that you will be able to last longer in a law suit. Thus, it can sometimes be the extra little push a defendant needs to settle the case earlier, but for a fair and reasonable amount.
Topics: litigation finance, litigation costs, third-party funding
Works Cited: Is Litigation Finance Right for You?, Uplift Legal Funding (Nov. 10, 2017), available at https://upliftlegalfunding.com/litigation-finance-right-for-you/