Understanding Delays in the Processing of Lawsuit Loans
Many companies advertise same day lawsuit funding. Yet lawsuit loan delays are often misunderstood. This post will discuss lawsuit loan delays, why they occur and how to avoid them.
Lawsuit Loan Industry Basics
The lawsuit loan industry is a complex business providing immediate cash now in return for a portion of the future proceeds of a claim for damages, otherwise known as a lawsuit.
Every lawsuit is unique. Each has a specific set of facts and circumstances, and each plaintiff is uniquely situated. Therefore, each lawsuit loan is carefully ‘underwritten’ (evaluated) with a set of expert eyes – focusing on the specifics and how the process will ultimately play out in the legal system.
Most lawsuit loans are personal injury cases where victims are injured through no fault of their own. Personal injury lawsuits are generally based in tort law. Lawsuit loans generally involve negligence cases.
Negligence lawsuits occur when one party (defendant) owed a duty of care to another, breached that duty, and that breach resulted in damages. Damages can be economic such as lost wages due to the inability to continue to work because of the accident. They can also be non-economic such as past and future pain and suffering due to the injuries resulting from the accident.
Examples of typical negligence personal injury loan cases include slip and fall cases, motor vehicle accidents, or premises liability claims. Other negligence lawsuits such as medical and legal malpractice, products liability, class action lawsuits and others are also considered.
Understanding Lawsuit Loan Delays in Underwriting
Complexity Adds to Lawsuit Loan Delays
Normal negligence cases such as motor vehicle accidents and slip and falls, are processed quickly and routinely. The underwriting process is as follows: provided documentation is reviewed; additional documentation is requested; a conference call or other communication with plaintiff’s counsel occurs; and a recommendation or offer is made to the client.
More complex cases such as medical malpractice or product liability actions could take more time as more issues can potentially arise. Lawsuit funding underwriters need time to evaluate risk and properly position size the lawsuit funding company’s capital.
Many pre-settlement advance companies advertise “12-hour funding” on the internet. And cases are routinely funded by Fair Rate Funding within this time frame. However, same day lawsuit loans is not the norm as many cases simply cannot be evaluated in 24 hours.
Information – the Most Important Ingredient
By far the largest reason why many lawsuit loans are delayed for funding is the inability to quickly obtain information about the case.
Lawsuit funding underwriters must assess the risk of investment and weigh that against the likelihood of recovery in any lawsuit. If a lawsuit is “lost”, the lawsuit loan (investment) is also lost.
Clients usually understand all pertinent information must be processed before a lawsuit loan is approved. Without information, delays can and do happen. Fortunately for applicants, settlement funding underwriters are good at their jobs. Many fact patterns, although unique, can still rhyme for purposes of lawsuit loan underwriting. Accordingly, lawsuit loan professionals can usually complete the risk analysis in a short time once the requested information is received.
How Can Lawsuit Loan Clients Help Avoid Delays?
Although there are several ways to help yourself get approved for lawsuit loans, assisting in the compilation of the requested documents is the most valuable.
In many instances, attorneys simply do not possess all the information requested. There can be a host or reasons for this. Sometimes, the attorney handling the case simply does not possess all the information. Medical reports, police or incident reports, and/or insurance information exists but may not be in his possession. And that is not out of the ordinary since it may take 6-9 months before any type of settlement negotiations can begin.
Yet while the attorney is in no rush, the client usually needs cash now. Clients help their own cause and their attorney as well, by gathering the information necessary for a lawsuit loan. Proactive efforts by litigants can aide in pushing the process along . . . and more often than not, your attorney will be happy you did part of his job for him.
Discussing lawsuit loan delays can help the applicant understand what it in store for them as they pursue lawsuit loan funding for their personal injury or other cases. As stated above, case complexity can have an effect on the approval process. More than any other factor however, information is the primary source of approvals and lack of information is the primary determinant in answering how long does it take to get a lawsuit loan.
Thanks for learning about delays in lawsuit loans and the lawsuit funding business.