Lawsuits are often settled too early, for too little, simply because plaintiffs are not in a financial position to withstand the long litigation process. While defendants are financially backed by huge, billion dollar insurance companies during the pendency of litigation, plaintiffs struggle to pay the medical bills, mortgage, and monthly household expenses. That reality is a major reason why most defendants use delay tactics in litigation. Banks have not, and still won’t, provide traditional loan products using a pending legal claim as collateral for the loan. Consequently, plaintiffs have had to rely on friends or family for assistance. If those meager sources were depleted or, worse, not available at all, the only avenue left to the desperate plaintiff was to consider early resolution for less than full case value. Enter lawsuit funding. In today’s legal marketplace, many plaintiffs can now take advantage of this important service to help pay bills and stay in the game. The best use of this valuable service is to leverage the funders money to achieve substantially improved case results.
At its best, lawsuit funding provides the power to
- Improve/provide access to justice.
- Hold wrongdoers fully accountable.
- Increase compensation, providing the litigant with financial staying power to fight for full compensation rather than a “forced pennies on the dollar” settlement because the plaintiff lacks sufficient assets to carry on the case.
- Increase contingent attorney fees as an outgrowth of increased case revenue.
Here is a real-life account of a client who benefited from lawsuit funding after suffering injuries and the loss of two loved ones in an auto accident. To protect the client’s privacy, we have removed any reference to his name.
The man (let’s call him Jake) hydroplaned on a defective Michigan highway, crossed the center line and collided head-on with an RV traveling in the opposite direction. Jake was seriously injured and his wife and infant baby were killed in the accident. The driver and passengers in the RV were also injured.
Jake retained an attorney and filed a lawsuit against the local county road commission, but in turn, was being sued for damages by the driver and passengers of the RV. After all, it was Jake who crossed the center line. Jake was uninsured at the time of his accident and had no assets to speak of (other than his lawsuit against the county road commission). His attorney wanted to settle the "RV litigation" so his efforts on behalf of his client and against the road commission would inure to the benefit of his client rather than the RV plaintiffs to whom he owed no duty.
The attorney developed a brilliant strategy. If he could find someone to fund the potential settlement of the RV driver’s and passenger’s case against Jake, he could negotiate that settlement, obtain a release and provide immediate payment to the plaintiffs in that case. He contact Lawsuit Financial and told company professionals what he wanted to do. After underwriting and evaluating the road commission lawsuit, Lawsuit Financial agreed to provide lawsuit funding necessary to resolve the RV lawsuit. The attorney now had the funding he needed to negotiate and settle with the RV plaintiff. Negotiations resulted in a $20,000 settlement; Lawsuit Financial provided the funding. With that lawsuit resolved, the possibility that the attorney’s professional efforts would benefit the RV plaintiffs rather than his client was eliminated. Now, he could aggressively proceed against the road commission. Three months later, he negotiated a $1.4 million settlement for his client, netting Jake almost $1 million. Lawsuit funding made a seven figure difference in this case for Jake and increased attorney fees for his industrious attorney.
That’s the potential power of lawsuit funding; that’s lawsuit funding at its best!
Lawsuit funding helped this client, and countless others, receive significantly increased litigation results. In order to use litigation funding strategically, a plaintiff’s attorney must determine if a case is an appropriate fit for these services.
How do we know if/when lawsuit funding is right for a particular case? Here are some factors to consider:
- Does the client seem more concerned about his/her growing, immediate, financial issues than he/she is about his accident, injuries, and receiving full compensation?
- Is the client facing eviction, foreclosure, repossession of his/her vehicle or other significant loss of valuable property?
- Is the client unable to put food on the table, pay for medical treatment/expenses or other necessities of life?
- Does client need surgery/medical procedures that he/she has no insurance for and cannot otherwise afford
- Is the client seriously considering settling his/her valuable case for inadequate compensation?
If the answer is “yes” to most or all of these questions, the client is a likely candidate for lawsuit funding. And, if timed strategically, funding should make a huge difference in litigation outcome. Surgery and other medical procedures, treatments and expenses, by themselves, increase the value of a personal injury case. Almost all defense attorneys and claims adjusters evaluate cases based upon the extent of the plaintiff’s treatment, the severity of his/her injuries, and the amount of money spent on treatment. Further, by eliminating financial desperation, the need to resolve a case, immediately, for whatever offer is available, lawsuit funding is a vital tool in creating enhanced revenue. Assuming a solid case, the ability to wait out the process should, almost always, inure to the plaintiff’s benefit.
Mark Bello has thirty-five years experience as a trial lawyer and thirteen years as an underwriter and situational analyst in the lawsuit funding industry. He is the owner and founder of Lawsuit Financial Corporation which helps provide legal finance cash flow solutions and consulting when necessities of life litigation funding is needed by a plaintiff involved in pending, personal injury, litigation. Bello is a Justice Pac member of the American Association for Justice, Sustaining and Justice Pac member of the Michigan Association for Justice, Member of Public Justice and Public Citizen, Business Associate of the Florida, Mississippi, Connecticut, Texas, and Tennessee Associations for Justice, and Consumers Attorneys of California, member of the American Bar Association, the State Bar of Michigan and the Injury Board.
Attorney, certified civil mediator, and award-winning author of the Zachary Blake Betrayal Series—Mark Bello is also the CEO of Lawsuit Financial and the country’s leading expert in providing non-recourse lawsuit funding to plaintiffs involved in pending litigation. He is also a member of the State Bar of Michigan, a sustaining member of the Michigan Association for Justice, and a member of the American Association for Justice.