Litigation funding, also known as third party funding is a process through which plaintiffs and attorneys get non-recourse advance to sneak through lengthy period of litigation. Litigation funding is divided into two types. Consumer funding and commercial funding.
Consumer funding is offered to the plaintiffs, and is also known as pre-settlement funding. This type of funding is focused to help plaintiffs fight with dire situation after going through personal injury. It seems impossible to cope with heaps of expenses one has to deal with, after the injury which include hospital bills and other living expenses. Since after getting injured it gets impossible to go to work and there is no source of income. This is when the plaintiff needs the reputable funding company the most. The funding company offers consumer funds in the form of advances. Consumer funds have proved to be a lifeline while dealing with time consuming litigations.
Commercial funds are offered to attorneys and various companies involved in litigation. They are very helpful for contingency fee attorneys. Contingency attorneys get paid only if the litigation is won. Commercial funds can be obtained so that the lawyers can continue their law practice in a smooth way.
Both customer and consumer advances are easily obtained through user-friendly application process. The representative of the third party funding company meets the attorney and tries to collect each and every information about the litigation. After evaluation some legal documentation is done and then the advance is issued to the litigator. As mentioned above, the advance offered is non-recourse advance. Which means it has to be returned only if the litigation is won. The funding company advances in return for a share of the proceedings or payoffs that would be received when the case/litigation has been settled in favour. Advance opted can be extremely helpful in dealing with issues related to litigation.
As far as the plaintiffs are concerned they are required to opt for funds. Without advance it is very difficult for plaintiffs to manage the expenses related to litigation and the opponents might consider them weak. The opposition then would try that the case is settled at minimum payment. So advance is not only to maintain the daily living expenses but is also helpful in creating a strong image on opposition.
Litigation funds aid attorneys in many aspects. They can expand their business and can manage to run cases strongly by putting that capital in hiring strong witnesses and doing authentic and proper research on the litigation. Litigation funding company is in fact a lifeline for the litigators.
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