“Low-ball” Settlement Offers – The Reason For Lawsuit Loans
Insurance companies have long made low ball settlement offers to minimize their loss exposure. In this post, we examine the use of these tactics and the market’s response in the form of lawsuit loans.
Civil Lawsuit Delays
Lawsuits take time. Plaintiffs can expect the civil legal process to last many months and often years. The reasons for these delays are simply built into the system. State rules of civil procedure allow plaintiffs time to file, answer, make motions, etc. These same rules allow the other parties to reply to those filings. Under the rules, time can add up quickly.
The amount of parties attempting to access the system is another factor. This, coupled with the limited resources available to adjudicate private disputes, contributes to what is often referred to as a “crowded docket”. This means the system is overwhelmed by litigants. The solution is that everyone must wait their turn to have their matter “heard” by the courts.
Delays Cause Financial Strain
Many civil lawsuits involve accident cases where personal injuries result. These include slip and falls, car accidents and various workplace injuries. Often, injured parties are not able to earn as much money as before the accident. In addition, any benefits they might receive in the form of workers compensation or disability may fall woefully short of covering monthly expenses.
Monthly shortfalls can begin small. Over time, they grow and become a major concern. Adding to the growth is the time civil lawsuits take to resolve. Many plaintiffs can expect years to pass before the case is ready for trial. This only adds to the problem.
Low-Ball Settlement Offers Arise
Of course, delays do not affect all the parties in the same way. Defendants in many civil actions are represented by lawyers hired by insurance companies who are paid to mitigate civil lawsuits. For example, most automobile drivers are covered by insurance companies who insure against losses that arise out of negligence. These insurers are on the hook for payment if their policy holders are negligent. Accordingly, thousands of attorneys work for negligent parties on behalf of their insurance companies.
The delay actually helps insurers because it moves their exposure down the timeline. Many also use the delay to leverage the financial strain many plaintiffs encounter after their losses. One way is to offer less than fair settlement value to these plaintiffs hoping it will be accepted. These low-ball settlement offers limit losses. The strategy is legitimate because the offers need not be accepted. But, some plaintiffs simply cannot wait out the process. Low ball settlement offers take advantage of this situation.
Lawsuit Loans – Refusing Low Ball Settlement Offers
In response to the low ball settlement offer tactics used by insurers and outlined above, market participants created specialty finance products called “lawsuit loans”. These companies advance money to plaintiffs who need financial support while their case is still pending.
Advancing money to plaintiffs was/is not new. Many attorneys would advance their clients money prior to settlement. Many states prohibit the practice however. Others allow living expenses to be fronted by attorneys so long as the client does not need to repay the advance with interest or other charges.
If You Have Any Questions, Call 888-964-2224
What a Lawsuit Loan Is
Lawsuit loans are financial transactions in which a plaintiff will transfer a portion of the potential settlement proceeds to a lawsuit funding company in return for immediate cash. Although these transactions are called lawsuit loans, they are technically not really loans at all. Instead, they are an assignment of property rights in the potential settlement. Essentially, the plaintiff “sells” a portion of the settlement in advance.
When the case is successfully resolved, the advance is repaid according to the terms of the agreement. The repayment is calculated using lawsuit loan rates and is determined by how long it takes for the case to conclude.
What Lawsuit Loans Are NOT
Lawsuit loans are NOT loans in the traditional sense. Traditional loans imply repayment at some point in the future. Lawsuit loans are not repaid if the case is lost. This is the primary difference. Also, settlement loans are non-recourse. This means that the lawsuit “lender” cannot pursue the plaintiff personally for repayment. Instead, repayment must come from the lawsuit’s recovery itself.
What are the Benefits of Lawsuit Loans
Lawsuit loans have unique features other than simply refusing low ball settlement offers. These include:
- No credit checks – credit is irrelevant for lawsuit funding because no periodic payments are made.
- No income verification – again, cash flow is not important because no monthly payments are due.
- No personal obligation – the lawsuit itself is the source of repayment.
- Free to apply – lawsuit funding applications are Free.
- Extremely quick approval – lawsuit loans are processed in as little as 12 hours. Same day lawsuit loans are not uncommon.
For More Information – Contact Fair Rate Funding
Obtaining lawsuit loans and declining low ball settlement offers is easy and straightforward. Simply contact us and start the lawsuit funding process. With your permission, we contact your attorney and discuss the case. Once approved, we send you over a contract. When we receive the signed copy, we send your cash via wire or overnight carrier.
Call us now on 888-964-2224 if you have any questions or fill out the online form to start the process.
Thank you for your interest in lawsuit loans.