Litigation finance is a cash advance based upon the merits of a lawsuit that provides a plaintiff with sufficient funding for concluding the case when they will receive their share of the settlement or verdict. The main role of litigation financing companies is to fund the plaintiffs in the case instead of giving them a loan. If the plaintiff is seeking the financial assistance from the litigation financing companies, the current or previous financial position of the plaintiff is not considered.
The litigation finance companies charge interest and fees differently. The funding given by the litigation companies is risky. It is normal for a judge to dismiss a case even if it has a strong basis. Due to the risks involved, these litigation finance companies charge high-interest rates on the cases that are successful so that they can make up for the cases that have been unsuccessful. Some funding companies prefer to use multipliers overcharging interest rates for their financial assistance.
These litigation finance companies will provide you with the resources to fight a case in the form of a cash advance. This assistance is offered to any person who lacks the means to fight a case. Generally, lawyers are not allowed to provide means to the clients. In spite of that, the advocate has a right to inform you about the best financing option that you can depend on. There are various litigation financing that individuals can seek professional assistance from.
The plaintiffs funding is one of the available options. In this type of funding, no money is paid back if the case is not resolved successfully. The plaintiff is required to pay high rates if they win the case. It is only a certain percentage of the settlement fund that is charged.
The other type of litigation finance is the post-settlement financing. This form of financing is easily available to the people who are not sure when they will get the compensation.. When you get the post-settlement financing, you are expected to pay back the interest rates or a portion of the settlement in case the case is successful.
Most of the litigation financing companies buy structured settlement payments from injury victims. Attorney litigation financing involves loans to attorneys. Most of the funding companies that offer this financing might postpone the payment of interest until the case is resolved.
Appellate financing is also offered by the funding companies. It means that if the case is resolved successfully the funding company receives a portion of the settlement.
There are very many plaintiffs that rush to litigation finance as the answer to their current cash flow problems without completely understanding the facts behind litigation funding. It is good to research on the company before you get any funding from them.