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Plaintiffs vs. Defendants – Civil Lawsuit Basics

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Understanding Civil Lawsuit Basics

At Fair Rate Funding, we are plaintiff advocates for justice. That is, we seek to help plaintiffs in their quest for compensation under the law. Defendants, especially in personal injury lawsuits, are usually financially strong insurance companies. Plaintiffs are normally individuals and are disadvantaged within the legal system. In this post, we respond to some of the more common questions surrounding the civil litigation process. Nothing contained herein is legal advice. If you have any legal questions, you should contact an attorney.

The Difference Between Plaintiff and Defendant

Civil lawsuit basics begin with the parties to the legal action. Both plaintiffs and defendants are roles played by these parties. That’s where the similarities end.

A plaintiff is the person or entity that files the lawsuit. They access the court system to seek justice for some sort of dispute. It makes no difference whether the filing involves personal injury or a contractual matter, the party initiating the lawsuit is the plaintiff.

The defendant, on the other hand, is the party who “defends” against the allegations made against them. That is, they must offer explanation of their side of the story in an effort to refute some or all of the plaintiff’s complaints.

How is a Lawsuit Started?

A plaintiff initiates a lawsuit by filing a COMPLAINT in the appropriate venue. The complaint outlines several important allegations:

  • Why the lawsuit was filed
  • Why plaintiff chose that particular court to resolve the dispute
  • What relief they are seeking

In response, the civil defendant files an ANSWER within time provided by the Court Rules. In the answer, the defendant admits or denies the allegations mentioned in the complaint. Defendant also asserts any available affirmative defenses they might have.

civil lawsuit basics

An affirmative defense is a fact or set of facts which, if proven by the defendant, defeats or otherwise changes the legal consequences of the defendant’s conduct. Examples of affirmative defenses could be:

Please note that the defendant has the burden of proof when asserting the elements of the affirmative defense. Plaintiff does not have the burden of disproving an affirmative defense.

Discovery is the Next Step

Once a lawsuit is commenced and defendant’s answer filed, the case goes through a period of discovery. The discovery process is when the parties exchange relevant information about the facts and circumstances surrounding the case.

The idea is to have the dispute decided based upon the entire set of facts and circumstances. Civil procedure rules thus require BOTH parties to respond to discovery requests as a pre-requisite to reaching a judge or jury. With both parties’ cards (facts and positions) on the table, settlement negotiations can be fruitful and timely. This saves the parties time and the court avoids the needs to spend its scarce resources on a claim that can be settled without the need for a trier-of-fact.

Arriving at the Courthouse

If the parties cannot settle the case, the lawsuit is set for trial where a judge and/or jury will decide the case. Civil law basics dictate the lawyers choose a jury, make opening statements and call witnesses to testify. Plaintiffs have the burden of proof and “put on” their case first. Defense attorneys will cross examine plaintiff’s witnesses, trying to draw out pertinent facts they want stressed or point out omissions or inconsistencies from their testimony.

When the plaintiff is finished calling witnesses and putting their side of the story on the record, the defendant has the opportunity to be heard. If plaintiff fails to meet its burden, the case can be dismissed on motion by the defendant’s attorney. If the case presses forward, the defendant will call its own witnesses (often including the defendant) and give their side.

The trial testimony is over when both parties put forth their positions on the record. Afterwards, both parties have a final opportunity to speak to the jury and argue their positions (closing arguments).

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The Trial Decision

After closing arguments, the judge gives the jury instructions. These instructions include not only the particular laws to apply to the facts of the case, but also how to apply the facts.

The jury, armed with these instructions and information about the law, go into deliberations and is responsible for coming up with a decision (verdict). Deliberations can last as little as an hour or two but can also last many days or weeks depending upon the:

  • amount of testimony
  • complexity of the laws which apply
  • available remedies

At some point after deliberations, a verdict is rendered. The jury can find in favor of the plaintiff and award monetary damages or other relief. If the jury finds in favor of the defendant, they are stating that plaintiff failed to meet the burden of proof. Therefore, there is no cause of action against the particular defendant.

The Appeals Process

The judicial process allows for a system of appeals. Upon appeal, the parties are no longer attempting to sort out the facts of the case. That is the job of the trial court. The appellate courts are concerned only with matters of law as applied to the facts.

For example, if a judge makes a ruling that is found to be in error, the appellate court can reverse the trial court decision or remand the matter back down to the trial court. The appeals process can also take some time. The truth is – settlement is in everyone’s best interest.

Length of Time and Some Solutions

As you can see, civil lawsuit basics include many steps. Keep in mind, there can be more motion practice, numerous depositions and adjournments which can also increase the time it takes to get just compensation.

Civil lawsuits can only move so fast. Many plaintiffs, especially those involved in personal injury lawsuits, may find themselves unable to work due to injuries. The delay in their compensation can be a struggle to say the least. This financial bind can hinder their ability to secure fair compensation. There are some solutions available to litigants however.

One available solution is the civil lawsuit loan. A lawsuit loan is a financial deal where we advance you money prior to settlement. You use the money as you see fit and if your case is successful, you repay us according to the terms of the contract.

For more information about lawsuit loans and how you can qualify, contact us or give us a call at 888-964-2224. We are here to help and are at your service.

Thank you for your interest in civil lawsuit basics.

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We are often asked whether pre-settlement loans are safe.  Considering all the opinions available, we are not surprised plaintiffs are concerned.  

In this article, we breakdown why we feel plaintiffs have these concerns and answer them in detail.  If after reading below, you still have questions, please contact us directly if you feel we left anything out of the discussion or need any more clarification.

We want you to have all the available facts so that if you are considering a pre-settlement loan, also known as a lawsuit loan, you will be considering it with eyes wide open. 

What is a Safe Pre-Settlement Loan?

Pre-settlement loans are financial transactions in which plaintiffs sell a portion of the future proceeds of a lawsuit.  Sometimes referred to as “lawsuit loans”, there are some misconceptions circling around the topic because these transactions are not loans in the traditional sense.  Instead, because the plaintiff actually assigns a portion of their interest in the case to a lawsuit loan “lender”, if the lawsuit is unsuccessful for any reason, the advance is not repaid and plaintiff has no other obligation. 

Thus, a safe pre-settlement loan is one that only exposes a plaintiff to repayment if the case is won.

For more information of the safety features of lawsuit loans, visit this article discussing the truth about lawsuit loans.

How do Pre-settlement Loans Differ from Traditional Financing?

Evaluating whether pre-settlement loans are safe means examining the difference between traditional loans and lawsuit settlement loans.

Are pre-settlement loans safe

Traditional loans normally imply repayment at some point in the future.  The duration and/or terms of the traditional loan may differ greatly.  But the main idea in traditional loans is that the principal and interest is repaid at some point in its entirety.

Traditional loans are sometimes “secured” by collateral, in which the debtor (person obtaining the loan) must pledge in order for the deal to occur.  Likewise, lawsuit settlement funding is “backed” by the plaintiff’s claim in the lawsuit.  The difference lies in how the two types of value are attached.  Collateral is pledged if the traditional loan is not repaid.  In this event, collateral will be transferred to the lender according to the terms of the agreement.

Conversely, the lawsuit funding contract is only pledged as a potential lien on the future proceeds of the case.  If there is no recovery, then there is no repayment.  Essentially settlement loans differ from traditional loans because they’re ONLY repaid if the case is successful.  While traditional loans are promises to pay under all circumstances, settlement loans are contingent upon a successful outcome.  It is because of this difference; lawsuit loan businesses are able to charge enough to offer this valuable financial service to the public.

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Why are These Differences Important?

The importance of these differences lies in the availability and features of these specialty financial products. 

First, because lawsuit loans are not credit transactions (loans), the past credit history is irrelevant to the lawsuit funding company.  As stated above, the lawsuit loan contract assigns a portion of the lawsuit.  A pre-settlement loan is safe to plaintiffs because the company cannot attach any other assets if the case is unsuccessfully resolved.  In such an event, the property purchased by the lawsuit funding company expires worthless.  It is sort of like buying a share of stock of a company that goes out of business.  You still own the share, but it’s not worth anything.  In other words, there is no way a pre-settlement loan can leave you in debt. 

The second pre-settlement loan safety feature is that there are no restrictions on the use of the money.  We often refer to lawsuit loans as “the client’s money”.  This is true because it’s your case so you can decide how to use your cash.  Some plaintiffs use the money to pay for medical treatment, some use it to catch up on bills.  The point is that no one should tell you how to spend your money.  It’s your money!

Simply put, lawsuit loans provide plaintiffs the flexibility to respond to their specific situation as they see fit.  They are different from traditional loans because they are different and because of this, they provide a much-needed lifeline if someone chooses to use it.

Opinions Vary – Lawsuit Loan Safety Criticism and Response

Critics often include insurers who blame lawsuit funding companies for an increase in lawsuits (they use this argument for everything), call the lawsuit loan industry unsafe and predatory and cite the difficulty settling otherwise resolvable cases.  Because lawsuit settlement loans seek to level the legal playing field between well financed insurers and injured victims, it is not surprising these companies oppose this type of financing.  Settlement loans are safe for plaintiffs because, when used properly, they can prevent financial strain from turning into a forced acceptance of “low-ball” settlement offers by insurers who can afford to play the waiting game.

Letters of Protection

Lawsuit loan supporters state the contract terms speak for themselves.  In fact, the New York Attorney General published “best practices” for the lawsuit loan industry almost 15 years ago.  Almost all litigation financing companies follow these practices.  Further, claims of an increase in cases and difficulty in settling existing claims are simply without merit. 

The truth is that pre-settlement loans are safe for plaintiffs because they provide a market that is otherwise not available to plaintiffs, mostly who are injured victims from someone else’s negligence.  Freedom to choose an individual financial decision should not be decided by bureaucrats who are not involved but by the parties themselves, who are in the best position to assess risk and act accordingly.  Simply put, it is up to the individual to determine if a pre-settlement loan is safe for him/her to use.

For More Information on the Safety of Lawsuit Settlement Loans

You are welcome to contact us anytime to discuss your lawsuit funding options.  If you have any concerns as to the safety of lawsuit loans or effects of entering into one of these transactions, we can answer any questions you might have.  We are here to help and are at your service.

If you feel you want to consider a settlement loan or consider whether settlement loans are safe for your specific situation, apply today to find out if you qualify. 

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Letters of Protection – What You Need to Know

An LOP is an acronym for Letter of Protection often given by personal injury attorneys in return for services performed for their clients in anticipation of settlement.  This post will discuss letters of protection, what they are, why they are used and how they compare with other options available in the marketplace.

Letter of Protection (LOP) Purpose

Letters of protection are generally given to secure medical treatment in accident cases in which the plaintiff is injured through no fault of their own AND when there is no available insurance coverage to pay for the treatment.

Letters of Protection
Letters of Protection

Although many states have “no-fault” automobile insurance laws, many injured plaintiffs simply do not have available medical insurance to pay for treatment sustained in motor vehicle or other accidents such as slip and falls, premises liability and other cases.

Letters of protection assure the medical providers that payment will be made after the case is settled.  The doctor can then make a business decision as to whether they are willing to perform the service.

Many doctors have working relationships with attorneys who appreciate these accommodations.  Here’s an example of how it works:

Consider an automobile accident in which Peter is injured.  Paul was driving the other car and, according to the police report, his failure to yield caused the accident.  Peter’s doctor doesn’t really want to treat him because there is no insurance and he’s been stiffed by accident patients before.  However, Peter hired an attorney who the doctor has worked with before.  The attorney issues a letter of protection to the doctor for Peter’s treatment.  The doctor is now assured that if the case is successful, he will be paid out of the settlement proceeds.

How a Letter of Protection Works

Letters of Protection

When a personal injury lawsuit is resolved, money is generally sent to the attorney and deposited into an attorney trust account.  The attorney then pays any costs, filing fees, expert fees, etc.; pays himself his fee; and pays the remainder to the client.

Essentially, a LOP is a promise to pay out of the proceeds of settlement along with those other costs.

Other examples of liens that might affect the plaintiff’s ultimate recovery include federal tax liens, child support liens, med-pay liens, and lawsuit loans.

Sample Language

Letters of Protection are fairly standard.  Most LOP’s read something like this:

Dear Dr. Smith: 

I represent Joe Patient, who suffered injuries in an accident on 1/1/21. I understand he is currently under your treatment for injuries sustained during this incident.  Unfortunately, Joe does not have health insurance or the financial ability to pay for your services currently. We allege the accident of January 1 was not Joe’s fault and are actively seeking monetary damages from the other parties.  Joe’s claim is still pending. 

Accordingly, we request you accept this Letter of Protection and remove his account from active collection until we can resolve his claim.  As consideration, we promise to contact you and make arrangements to pay your bill prior to distributing any settlement proceeds to Joe.  Further, this letter in no way makes the payment of your bill contingent on the outcome of Joe’s lawsuit. By accepting this Letter of Protection, you agree not to seek payment until the civil action concludes.

Thank you for your time and attention in this matter.  Kindly send all future correspondence to this office pending the outcome of this case. 

Sincerely,

Ben Franklin

Counsel for Joe Patient

The primary focus of an injured party is to get better.  LOP’s help make that possible by affording much needed medical treatment which may not otherwise be available without the presence of a negligence claim.

Letters of protection are quite common in personal injury practice. Yet LOP’s are not the only option.  Below we discuss the use of the lawsuit loan for use in the securing of medical procedures.

Letter of Protections v. Lawsuit Loans

A lawsuit loan is a cash advance made by a lawsuit funding company to a plaintiff in a lawsuit.  In return, the plaintiff pledges a portion of the future proceeds of the case.  Lawsuit loans are often used to secure medical treatment, primarily surgeries.  While surgical lawsuit loans can help clients get the treatment they need, there are some important differences between lawsuit loan funding for medical expenses and LOP’s.

Letters of Protection

Although typical personal injury loans are paid directly to plaintiffs, lawsuit loans for medical treatment can be paid directly to the medical providers.  In this way, the doctor gets paid immediately.  Lawsuit settlement loans are then placed as a lien on the file by the plaintiff’s attorney.

As stated earlier, a letter of protection does NOT make the payment for the medical treatment contingent on a successful outcome in the case.  The patient remains liable for the treatment.  A lawsuit loan is less risky because the provider is paid in full.  The plaintiff is “off the hook” as far as payment for medical treatment is concerned if the case should be lost.  Instead, the lawsuit funding company takes on this risk.

Medical providers price their services in personal injury cases knowing full well it could take years before they are paid in full.  The good news with lawsuit loans is that a cash price is usually negotiated at the time of service, so the bill generally is less than it otherwise would be with a LOP.

Of course, there is a cost for the service of transferring risk.  So the tradeoff is that the lawsuit loan company must get paid at the end of the case along with their charges for the use of the money.

Final Thoughts

Medical treatment is an integral part of a personal injury lawsuit.  Both lawsuit loans for medical treatment and letters of protection can serve a vital role in securing the proper care.  Both methods can serve injured parties.  It is up to the individual to decide whether to assume or transfer the risk of repayment in his/her particular case.

Thank you for your interest in letters of protection and lawsuit loans.

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There is a great deal of talk about certain companies offering low interest lawsuit loans more than others.  Much of it is used as marketing to separate one company from another.  Let’s face it – money is money.  So lawsuit funding companies have to differentiate themselves somehow.  Some do this by pronouncing they offer low interest lawsuit loans to the public.

The purpose of this post is to examine the use of low interest lawsuit loans and discuss why an applicant would qualify for this pricing.

Why Low Interest Lawsuit Loans are Offered

Lawsuit funding companies offer low interest lawsuit loans for one major reason – to capture market share.  These companies hope that by offering the lowest pricing for quality lawsuit loans, they will secure more quality cases in the form of referrals from personal injury lawyers.  It’s as simple as that.

Of course, clients get a good deal.  However, repeat customers are not the bread and butter of the lawsuit funding industry.   Attorney referrals are the life blood of a successful lawsuit funding enterprise.  Keeping lawyers happy with low costs makes their jobs easier at the time of settlement because the client ends up with more money.  Happy clients refer their friends and family to “their” lawyer and the beat goes on.

How the Cost of Money Makes it Possible

low interest lawsuit loans
low interest lawsuit loans

Read any financial news article and you will realize there are literally trillions of dollars floating around.  Much of that money has to be deployed to make more money.  Investment money finds its way into productive enterprises.  Lawsuit funding is one such endeavor.

What investors “charge” lawsuit funding companies who offer low interest lawsuit loans can vary greatly.  By definition, a low interest lawsuit loan means the pricing is at the low end of industry standards.  The profit for the lawsuit funding company will be the difference between what it costs to invest in lawsuits including staff, advertising, rent, and a host of other line items – not the least of which is the cost of borrowing capital to “fund” low interest lawsuit loans.

Obviously, a company which secures a lower cost for the money it borrows, can pass along the savings to their customers in terms of pricing.  Many actually do.  Others use the “savings” to expand their reach and grow the business.  Of course, this can be true for any line item.  For example, a lawsuit funding company which relies on attorney referrals would save money on advertising.  If the amount of that savings is significant, it can be reflected in pricing.

How to Qualify – It’s All About the Risk

If a client receives a low interest lawsuit loan, you can be sure that settlement loan underwriters are confident about the outcome.  Lawsuit funding companies lose cases but obviously losing cases when your pricing structure is lower than the competition means you have to be more selective simply to generate the same amount of profit as your competitors.

What this means is that liability must be clear, there needs to be a significant injury and there must be available insurance coverage if an applicant expects to be offered a low interest lawsuit loan.  Any cases which do not have one of the above, may eventually get approved, but probably not at competitive rates.  And this makes sense.  The company has to factor in the risk of loss in their pricing mechanisms.

Low Interest Lawsuit Loans Reflect Risk

What’s it all mean?  Well, it means that a rear end auto accident case, where there is sufficient coverage and permanent injuries requiring surgery, will get approved for a low interest lawsuit loan (if the plaintiff knows how to shop).  Conversely, a slip and fall on ice case, one hour after an ice storm with non-permanent injuries will likely NOT get approved for this type of pricing.  If the case is approved at all, it will likely be a higher cost since the risk must be reflected in pricing.

If you have any questions regarding low interest lawsuit loans or lawsuit funding in general, please call us at 888-964-2224.  We are here to help you.

Thanks for your interest in the lawsuit funding business.

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When offering a cash advance for a pending case, lawsuit funding companies analyze a wide variety of information.  At Fair Rate Funding, we frequently are asked how the client can help us during the case loan process.  Below is a brief outline of the steps clients can take to help obtain cash for their lawsuit.

  1. Gather and Submit Information Relevant to the Case– Clients frequently possess much of the information needed to evaluate a lawsuit for funding.  For example, if the client is requesting a lawsuit loan for a automobile accident, clients may already possess the police report, insurance information, and perhaps some medical records.  In some cases, this information may be enough to render a decision on the “fundability” of the lawsuit.Non Recourse Lawsuit Loan
  2. Communicate with your Attorney your Desire to Enter into a Lawsuit Funding Agreement– The reasons for needing a lawsuit loan against your legal case are many.  However, if your attorney does not know the situation, he/she may resist the process.  Be upfront and honest about your desires and your attorney will be more willing to cooperate.
  3. Be Patient– Lawsuit funding companies are in the business of helping clients obtain money.  They only get paid if cash is advanced so the process is virtually never adversarial.  You and the case loan workers are on the same team for purposes of obtaining a lawsuit loan.  Help each other out and allow the workers to go through the necessary steps.  Help them, help you.
  4. Ask– Ask your funder if there is anything you can do to help.  In most cases, the professional lawsuit advance worker will be able handle the process in its entirety.  But, you never know when that one piece of information will make a difference in the underwriting process.
  5. Understand– Lawsuit funding is a business and business is not personal.  If your case can be funded, it will.  But the underwriting process is VERY subjective.  What is a great case for one legal loan outfit, may not suit the tastes of another.  If at all possible, lawsuit loan companies advance cash on a lawsuit.  The trick is understanding the nuances of the business and working within those parameters.
  6. Realize You Still Have a Good Case– Even if a legal loan is not offered, that does not mean you do not have a valid claim.  Your lawsuit may be so complex that a company may not want to take a chance on it.  Or, there may be unresolved legal issues when you apply.  Your attorney would not be wasting his time or yours if he/she thought there was no chance of recovery.  You probably still have a good case despite what the underwriters think.  The fact is that not every case is a good fit for funding.

The above are only a few of the possible points which potentially help a client understand the truth about lawsuit loans.

Thanks for your interest in the lawsuit funding business.

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Looking into Lawsuit Loan Cost

The lawsuit loan, also known as lawsuit funding or pre-settlement funding, is a unique investment. Its structure allows investors to assist plaintiffs in ongoing litigation with immediate cash to help pay their expenses while the lawsuit is litigated. This post analyzes lawsuit loan cost and helps identify the unique nature of these specialty finance products.

Lawsuit Loan Cost Reflect Cost of Production

Wherever there is a need, you will find entrepreneurs trying to fill that need. In any business, there are costs associated with providing the service or product.  The lawsuit loan business is no different.

lawsuit loan cost

Occasionally, critics target the lawsuit loan industry as too expensive or predatory to those who are desperate for financial resources.  Despite these claims against the cost of the lawsuit loan, lawsuit loan cost simply represents the cost of providing the service for profit.  Lawsuit loan “rates” are certainly larger than mortgage rates or car loans.  But major differences separate these types of monetary transactions.  In truth, a lawsuit loan is far different than a car loan or a mortgage – regardless of the use of the word “loan”.

Lawsuit Loan is a Misnomer

The term “loan” implies repayment at some point in the future.  Car loans, home loans, and others are “secured” by collateral.  That is, the car or home can be “repossessed” and sold by the lender to satisfy some or all of the loan principal and costs.

To be sure, other loans are not collateralized, and as such are deemed “unsecured loans”.  Simply because a loan is unsecured however, does not mean the lender has no recourse.  In fact, unsecured debt is collected in a myriad of ways after a borrower defaults.  It is common for judgements to be entered and wages garnished in collection of unsecured debts.

Contrast this with the non-recourse nature of a lawsuit loan.  In a lawsuit loan transaction, no collateral is offered.  The client assigns a portion of the proceeds of the lawsuit to the funding company in exchange for a present sum of money.  Because the transaction is structured in this manner, the only transfer of value for purposes of collection, occurs if the lawsuit is successful.  Therefore, lawsuit loan deals are deemed “non-recourse” which means the lawsuit loan company cannot collect directly from the client in the event the lawsuit is lost.

The failure of clients to be personally liable for the repayment of lawsuit loans makes it a more risky proposition for investors.  That risk must be represented in the pricing and is a reflected in lawsuit loan cost industry wide.

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Lawsuit Loan Cost and Risk Assessment

20 years ago, when the lawsuit loan business was at its infancy, lawsuit loan companies charged high rates and fees for lawsuit cash advances. Lawsuit loan cost has decreased since that time as more historical data became available.  With this data, investors were better able to assess the risk of loss and expected return. Until only a few short years ago, investors were ‘flying blind’ in an investment arena without a suitable data set of historic returns.

While lawsuit loan cost is lower than in years past, the average lawsuit settlement loan still commands a higher cost than a car or home loan. But this is true because the two are entirely different transactions as discussed above. 

For example, a car loan is secured debt which means that if payments are not made, the creditor can repossess the vehicle in partial payment of the loan.  Further, the lender can collect on the loan by attaching a claim on any other asset the client might own.

Conversely, a lawsuit loan is “non-recourse” in that if there is no recovery, the advance is not repaid. The lawsuit funding company purchases a portion of the proceeds of the case. So the transaction is really a asset purchase instead of a loan.  If the lawsuit is unsuccessful however, the investor has NO claim against the plaintiff. Repayment must come from the lawsuit itself, that is the risk the lawsuit loan cost reflects.

In Conclusion

As the lawsuit funding business evolved, it became more efficient.  Because of competition, this efficiency reflects in pricing.  And the savings are ultimately passed on to the client.  Perhaps this is the most important reason why the quality of cases ultimately approved for a lawsuit loan is increasing and the price points for these “preferred cases” is decreasing.

Thank you for your interest in the lawsuit loan business.

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Lawsuit Funding Buyouts Show Flexibility

Often, clients receive lawsuit funding and later need more money than their original lawsuit cash advance.  Lawsuit funding companies usually give more money to a plaintiff/client with a strong enough case to justify the additional risk.  But the determination is subjective.  That is, the lawsuit funding company can simply refuse to advance any more money on the case.

When this occurs, the client has a choice to make.  Either they find another source of money outside the lawsuit funding arena, or they find another settlement loan outfit to advance them more money.

Lawsuit funding buyouts are an option for these clients.  A lawsuit loan buyout is when a second settlement loan company pays the original company in full and advances more money to the client.  The advance is “re-financed” because the plaintiff now must repay only the second lawsuit lender.

Lawsuit Funding
Lawsuit Funding

Lawsuit Loan Buyouts Can Save You Money

At Fair Rate Funding, lawsuit funding applicants routinely apply for additional funding after an initial lawsuit loan is received.  If the applicant received lawsuit funding from another company, we call these cases “buyouts”.  This term is used because in order for a lawsuit funding applicant to receive additional funds, the prior advance must be paid in full by the “new” settlement funding company.  This is because the second funding company does not want to be second in line when it comes time to repay the advance.  Also, it is likely the different lawsuit funding agreements possess different terms and conditions.

Lawsuit funding for a plaintiff who has already taken a lawsuit cash advance against the lawsuit can be a tricky affair because lawsuit lenders will only advance a certain amount of money on the case.  That amount is normally 8-12% of the estimated settlement value of the lawsuit.  If the prior funding “payoff” is at or near this amount, no additional funding will be offered.

The Benefits of a Lawsuit Funding Buyout

Nevertheless, additional settlement loans are advanced every day.  And the effects of these transactions can actually benefit the plaintiff.

Consider a plaintiff who signs a $10,000 lawsuit funding agreement which calculates the “use fee” (interest) at 3.25% per month compounding monthly.  The nature of this rate structure is to lower the repayment amount in the first year and a half of the contract term.  In other words, the payoff for these contracts would be cheaper for the client if the contract were to settle in the first 18 months after the advance.

Due to unforeseen circumstances, the client learns his case is several years away from getting a trial date.  There could be many reasons for this but what is important to realize is that the longer the case drags on, the more interest is charged.  Because the interest is calculated on the previous month’s balance, the higher balance generates a higher payoff amount.  This is known as a “compounding effect”.

Contrast this to a fixed six (6) month “use fee” structure where the charge is calculated on the original contract amount and not the previous month’s balance.  The “charge” for the use of the money remains the same at the end of the case as it did at the beginning.  In this situation, the client may be far better off “refinancing” his existing advance with a lawsuit funding with a different rate structure.

In this situation, a buyout benefits the client by locking in an use fee that is non-compounding.  The client gets more money to use at his discretion before the case is concluded and the pre settlement funding company gets a “fundable” case to invest in.

Lawsuit Funding Flexibility Allows for Creative Solutions

The flexibility of lawsuit funding to meet these needs is a real benefit to plaintiffs because there are no pre-set rules (regulations) stating what two free market participants can do when they enter into a contract (lawsuit funding agreement).  As such, funding structures such as buyouts, monthly stipends, and flexible repayment terms all afford plaintiffs the ability to tailor the transaction to suit his/her needs.

Thank you for your interest in the lawsuit funding business.

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Lawsuit loans, otherwise known as lawsuit funding, case loans, lawsuit cash advances, settlement loans or pre settlement funding is a complex financial business providing immediate cash in return for a portion of the future proceeds of a lawsuit.

Lawsuit Loans
Lawsuit Loans

Lawsuit funding’s aim is to help litigants ‘weather the storm’ financially while they wait for their case to reach settlement or other recovery.  Since every lawsuit is different, each is evaluated thoroughly and carefully by lawsuit loan underwriters whose job is to assess the likelihood of settlement of any particular case and for what amount.

The vast majority of cases funded by Fair Rate Funding, and other lawsuit settlement funding companies, are routine personal injury cases. Examples include, slip and fall cases, motor vehicle accidents, Jones Act lawsuits, FELA claims or workers’ compensation cases.

However, medical and legal malpractice lawsuits, products liability cases, class action lawsuits and others increase the complexity and thus the amount of time needed to properly evaluate the risk of loss.  This is obviously of primary concern to financial companies who offer lawsuit loans, since any loss is a total loss in the eyes of the lawsuit funding enterprise..

Many pre-settlement funding companies tout 24 hour service. And while clients regularly have their cases evaluated and funded by Fair Rate Funding within this time frame, many simply cannot be evaluated in 24 hours for various reasons.

Lawsuit Loans – Filling the Need for Information

Underwriting lawsuit loans in a timely fashion depends on the company’s ability to quickly obtain information about the case and put it into the hands of the case loan underwriters. Keep in mind that 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 is also lost as previously mentioned.

Clients certainly understand all pertinent information must be reviewed before lawsuit loans can be approved. Fortunately, case loan underwriters possess skills in lawsuit loan risk assessment and can normally underwrite a file in a short time, once all the necessary information is received.

Helping companies which offer lawsuit loans to obtain information is one way the client can assist in the process and shorten the approval process. In some instances, the attorney handling the lawsuit simply does not possess all the information needed to make a funding decision.

For example, medical reports, police or incident reports, or insurance information may exist but the attorney may not documentation of proving their existence. The reason may simply be that the attorney does not the information right away since he knows all the pertinent information will come out eventually.

Although the attorney is not in any rush, the client needs immediate cash.  Clients help their own cause and their attorney as well.  By compiling all the documents necessary for a lawsuit loan, the client helps the attorney build his file with documents he will ultimately need to properly litigant the case.

Because lawsuit funding relies heavily on the production of supporting documents, their presence is of paramount importance.  More than any other reason, the lack of proper paperwork is the reason why a lawsuit cash advance approval is delayed.

Thank you for your interest in the lawsuit funding business.

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A Union Pacific train conductor has been awarded over $900K in a FELA (Federal Employers Liability Act) lawsuit stemming from a 2010 derailment that left the man injured and unable to return to work.

FELA-Lawsuit-Funding
FELA-Lawsuit-Funding

The plaintiff in the case, Loren Sweley, age 68, was working as conductor of a Union Pacific train in January of 2010. The train was traveling at nearly 50 mph when it struck a bulldozer that was impeding the tracks as part of a night time construction project on the unlighted tracks. The impact caused the train to derail and caused Sweley and the train’s engineer to suffer significant injuries.

The lawsuit contained to following description of the accident:

“Suddenly and without any verbal or written warning or track warrant warning of any work being performed in the Columbus Yard, a heavy piece of equipment in the form of a dozer suddenly appeared through the fog straddling the main line track directly in front of the train… There was no time to slow the train and it crashed into the dozer resulting in injury and damage.”

Both men were trapped in the train’s wreckage and had to be extricated. The injured engineer, who also filed a claim, later settled his claims with Union Pacific out of court. According to Sweley’s attorney, Randy LeNeave, the train conductor suffered severe and permanent injuries to his spine that required extensive surgery, fusing several of Sweley’s vertebrate, and keeps him from returning to work.

“It was terribly traumatic and caused career-ending injuries,” said LeNeave.

Sweley filed suit for pain and suffering, medical expenses, legal fees, and for the loss of his ability to earn an income. He has not returned to work.

Despite the incident occurring over four years ago, the case only just went to trial in October. After only three days of trial in a Douglas County District Court and four hours of jury deliberation, Sweley was awarded a judgment of over $900,000.

Civil action over personal injury litigation is a major issue for many railroads. At Union Pacific, the company paid out nearly $89 million in personal injury claims in 2013, according to SEC filings.

FELA Lawsuit Funding Helps Plaintiffs

While Sweley was able to realize a fair judgment in his case, the long run time of the case meant he had to wait over four years to receive compensation.

In that time, Sweley’s medical and daily living expenses continued to grow while he waited and hoped for successful outcome. Securing FELA lawsuit funding in a case like this can help a plaintiff shoulder the financial burden of a lengthy civil proceeding.

Lawsuit funding provides a cash advance for plaintiffs in a variety of civil proceedings, including FELA lawsuits, to help them through the financial hardships of an extended court battle. Lawsuit funding is not a traditional loan, so considerations like credit or employment history are not a factor. The only concern for a settlement funding lender is the strength of a case.

Acquiring FELA lawsuit funding requires no upfront fees and cash provided can be accessed in as little as 24-hours. And unlike traditional loans, the borrower of lawsuit funding is not required to pay anything until a judgment is rendered or a settlement is reached between the parties. Should the plaintiff lose their suit, no repayment is required.

For those involved in FELA lawsuits, securing lawsuit funding could help you outlast and receive a better judgment or more substantial settlement. A FELA lawsuit can put a serious strain on your finances; get help with lawsuit funding.

https://www.omaha.com/money/jury-awards-in-union-pacific-derailment/article_80a3cd54-33e6-5cf9-a768-6ac5aebfc265.html

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A FedEx truck driver has filed suit against the city of Memphis and its former Police Chief after an auto accident on June 23rd.

Auto Accident Settlement Funding
Auto Accident Settlement Funding

The civil action lawsuit, filed in Macomb County Circuit Court, stems from a two-car accident which left both vehicles totaled and left the FedEx truck driver, Sean Wood, seriously injured.

Former Police Chief, Beels Koveck, was driving a city police vehicle at the time of the accident. According to police reports, Koveck ran a stop sign on a gravel road and slammed into the side of Wood’s FedEx truck, sending the struck vehicle careening into a nearby ditch. Despite being found at fault, Koveck did not receive a citation from Michigan State Police who responded to the accident.

Woods suffered significant injury in the crash, requiring extensive corrective surgery to his ALS. Woods has been unable to return to work following the accident owing to his injury. Woods is seeking damages for pain and suffering, medical expenses, legal fees, and for lost wages.

“She admitted she ran the stop sign and witnesses state it was at a high rate of speed with no attempt to stop” said Christian P. Collis, Woods’ attorney, “So I don’t think it will be hard to show… gross negligence.”

Auto Accident Settlement Funding Helps Plaintiffs With Cash Now

That being said, Woods still has a long and difficult court battle ahead of him. Filing a lawsuit against a public official can result in a protracted and messy proceeding. As the case drags on, Woods’ medical cost fees will begin to mount, putting increasing pressure on him to accept an early ‘low ball’ offer as final settlement.

Settlement funding from Fair Rate Funding could help someone in Wood’s position endure the financial hardships of an extended legal battle. Auto accident settlement funding is a non-recourse cash advance available to plaintiffs in a variety of civil suit proceedings, including automobile accident suits. Settlement funding provides money in anticipation of a successful settlement of judgment; money that can be used to pay medical expenses, to compensate for lost wages, or for any expenditure the applicant decides. And if the borrower fails to win their case, the funds do not have to be paid back.

Unlike traditional loans, Auto accident settlement funding is awarded based on the strength of your suit, not your credit or employment history. The funds can be made available as little as 24 hours and there are no upfront fees associated with securing settlement funding. You don’t pay until you win your case. And if you don’t win, you are not required to repay anything.

If you or someone you know is going through the long and costly process of fighting for a fair settlement in an automobile accident lawsuit, consider obtaining Auto accident settlement funding. It can give you the financial flexibility to keep up your fight without feeling the pressure to settle for less than you deserve.

https://www.voicenews.com/articles/2014/10/28/news/doc544abba1dbda3657486895.txt

 

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