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The basics of litigation funding

Experiencing a personal injury or having a loved one suffer a wrongful death is a tragic and traumatizing experience. It often takes months, if not years, to come to terms with the grief caused by these life-changing events.

These situations become even more complicated when the injury was caused by events totally outside one’s own control. But holding the responsible parties accountable for their actions can go a long way toward finally achieving closure.

Still, seeing a successful lawsuit through from beginning to end is an exhausting process. Given plaintiffs’ attorneys typically work on a contingent fee basis, meaning they get paid only if the lawsuit is successful, many are hesitant to take cases in the first place unless there’s clear merit to the lawsuit. And even then, successfully prosecuting a personal injury lawsuit is extremely expensive. Additionally, because plaintiffs’ attorneys don’t get paid unless and until they obtain a win for their clients, plaintiffs’ attorneys must often front the cost of depositions, expert witnesses, travel fees, and other litigation expenses out of their firm’s own pocket. These costs, unfortunately, can often prove to be prohibitively expensive, even for established law firms.

For this reason, an enterprising new industry, known as the litigation finance industry, has developed in recent years. These businesses seek to solve this problem by providing cash for attorneys to fund their lawsuits and for litigants to use to make ends meet while their cases are pending.

Litigation financing began in Australia and the United Kingdom in the mid-1990s, but it has since expanded into a global, multi-billion dollar industry. Litigation financing, at its core, is essentially a third party lender making a non-recourse, unsecured cash advance to litigants or their attorneys to use to fund the expenses of litigating a lawsuit, pay medical bills, or pay other living expenses incurred between the time the lawsuit is filed and its final disposition. In exchange, the lender receives a percentage of any settlement or judgment paid to the plaintiff. But if the plaintiff loses, the financer, like the plaintiff’s attorney, gets nothing.

For example, if the finance company loans a plaintiff’s attorney $100,000 to pay for expenses associated with a lawsuit and the attorney ultimately negotiates a settlement for $1,000,000, then the finance company would receive back its initial $100,000 plus a pre-determined percentage of the settlement. If the financing agreement provided the lender’s fee would be, for example, 30% of any settlement, the company would receive $300,000 of the settlement as well, for a total of $400,000.

Legal Bay Lawsuit Funding is one of the premier litigation financiers in the world. Legal Bay’s team leverages over 20 years of industry experience to fund all types of lawsuits. Legal Bay provides funding to both litigants and their attorneys to help ease the financial burden of litigating a lawsuit. After all, a hefty settlement that may happen sometime in the future doesn’t do any good when there are bills due today. In this respect, Legal Bay is proud to provide funding for medical malpractice claims, motor vehicle claims, negligence claims, employment discrimination and harassment claims, and nearly every other type of civil lawsuit.

So, if you’ve filed a lawsuit seeking damages for an injury but need cash to make ends meet while your case is pending, or if you’re an attorney who needs cash to hire expert witnesses, pay for depositions, or pay for the myriad other expenses it takes to win a lawsuit, visit https://lawsuitssettlementfunding.com to see how Legal Bay can help.

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