Types of Litigation Financing
Litigate finance refers to the prior cash payment given to plaintiffs who have filed a case but do not have enough money to settle the case. The main role of litigation financing companies is to fund the plaintiffs in the case instead of giving them a loan. The funding companies are not usually concerned with the credit position of the plaintiff.
The interest rates charged by different litigation companies for the financial assistance are different. It is true to say that these litigation finance companies assume a lot of risk due to their investment in the lawsuit as opposed to investing in the plaintiff. It is normal for a judge to dismiss a case even if it has a strong basis. For this reason, the cases that are successfully resolved have high-interest rates so that the funding company can balance that money with that of the cases that have not been resolved successfully. It is possible to find funding companies that consider multipliers to be better than the interest rates.
If you seek the services of financial litigation companies; you will not struggle in any way to find financial resources to help you fight the case. This assistance is offered to any person who lacks the means to fight a case. As long as a person is a lawyer who is involved in your case, they are not allowed to provide the clients with the means to get the case settled. In spite of that, the advocate has a right to inform you about the best financing option that you can depend on. Plaintiffs have several funding options they can seek financial assistance from.
The petitioners can check out the plaintiffs funding. This means that the plaintiff does not have to repay the loan if the case is lost. When the plaintiff is given this loan, they are expected 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. In case you are not sure of the time you will receive the settlement, this is the best financial option you can choose.. It is however short-term cash advance and on a recourse basis.
Most of the injury victims are the ones who are funded by the litigation financing companies. The other option is the attorney litigation funding. This financing is offered on both recourse and non-recourse basis.
Appellate financing is also offered by the funding companies. It is often offered on a recourse basis to plaintiffs.
There is some of the important information about litigation finance that every plaintiff should know before applying for lawsuit funding. It is good to research on the company before you get any funding from them.