Disclaimer: Consumer legal fundings and advances are not loans under applicable financing laws. Rockpoint’s products are non-recourse, meaning if you don’t win your case, you don’t have to pay us back. Receiving financial support in connection with a legal case is typically (and oftentimes incorrectly) referred to as a “lawsuit loan” or “loan.” Therefore, for the ease of search references, these terms may be used in this context to refer to our funding products, but we maintain our separateness from consumer loan products in all legal aspects.
If someone’s dog bit you or you’ve had a motor vehicle accident, one of your first thoughts might be to call a lawyer and file a claim to recover your damages. Early in your case, you’re probably filled with zeal, eager to dish out justice and win a generous settlement. But as your case drags on, funds run low. You’re worried you might have to accept a settlement you’re not happy with because you can’t afford your lawyer anymore.
That’s where litigation funding comes in. Below, you’ll learn the benefits of litigation funding and how it can help you achieve the legal outcome you’re aiming for.
What Is Lawsuit Funding?
Sometimes mistakenly referred to as “lawsuit loans,” litigation funding is a cash advance on your settlement. Litigation funding is available for both plaintiffs (individuals and businesses) and law firms.
Before diving into the perks of legal funding, let’s discuss some of the myths.
- Myth: litigation funding is expensive: It is true that funding companies will take their payment out of your settlement. However, having access to litigation funding means your lawyer has more time to negotiate for a higher settlement, so you may still come out ahead.
- Myth: litigation funding is risky: Funding companies will only provide funding if they believe you have a strong case. Additionally, you do not have to repay the funding if your case loses, so there’s no risk to you.
- Myth: litigation funding isn’t legal: Although litigation funding may not be familiar to many plaintiffs, it is completely legal.
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Benefits of Legal Funding
How can litigation funding impact your case outcomes? These are some of the ways it can benefit your civil case.
Gives Lawyers More Time To Build a Strong Case
Suppose you’ve fallen in a grocery store, and your premises liability lawyer has been hard at work building your case. But you’re running out of money, and you’re worried that the lawyer might start cutting corners or drop you as a client because you can’t afford to pay.
Litigation funding was made for situations like these. By using legal funding as a cash flow solution, your legal team can focus on building the strongest possible case for you.
Helps Litigants Afford Ongoing Legal Fees
It’s a fact that lawsuits are expensive. Over the course of a lawsuit, legal fees can reach five or six figures very quickly. If a lawsuit stretches on for over a year, as many personal injury suits do, fees can cost litigants tens of thousands.
Some litigants might opt to take out a personal loan to afford these ever-climbing fees, but doing so comes with plenty of drawbacks. By taking out a loan, you’ll have to make monthly payments on the amount you borrowed, and interest rates can be steep.
Because litigation funding doesn’t require the borrower to pay anything back until after their case settles, it’s by far the more litigant-friendly option.
Allows for the Accurate Calculation of Damages
Whether you’ve had a car accident or you’re suing your surgeon for medical malpractice, you likely have some hefty damages — you wouldn’t be filing a lawsuit otherwise. Your lawyer will calculate your damages, which might include medical expenses, property damage, and lost wages.
The trouble is that some lawyers are a bit overzealous when calculating damages, and they overestimate how much your claim is worth. In turn, they waste valuable time haggling with the insurance company for an unrealistic amount.
Litigation funding brings an independent third-party assessment into the mix. Funders evaluate your damages to determine the strength of your case, and their estimates are neutral and unbiased.
Can Result in Higher Settlement Offers
Perhaps you’ve heard of the famous 1970 Stanford marshmallow experiment. In it, researchers presented children with one marshmallow apiece. They told the children that they could eat the marshmallow now, but by waiting, they’d enjoy an extra treat.
The same principle applies to your legal case. Sure, you could take that settlement offer that’s on the table now, but by holding out, your offer could be much higher.
Litigation funding gives you the means to wait for the highest possible settlement offer instead of living with the regret of settling too soon.
Provides Financial Relief for Plaintiffs
Many plaintiffs say that the worst part of experiencing an accident injury isn’t the physical pain and suffering, but rather the worry of how they’re going to pay all those mounting bills. Your medical bills might total tens of thousands, and they’re still climbing. You have rent to pay, and your landlord is less than sympathetic about your plight.
You shouldn’t have to worry about paying for basic necessities while you’re trying to recover after an accident. Instead of taking out a loan to cover your needs, litigation funding is a far better solution.
In addition to using the funding for legal fees and court costs, you can use the money for anything else you need or want. Many plaintiffs use their funding for:
- Medical bills
- Rent and mortgage payments
- Utility bills
- Student loan payments
- Credit card bills
- Groceries
- Home modifications
- Moving expenses
- Car repairs and vehicle replacement
- School tuition
Need a Quick Cash Infusion? Call Rockpoint Legal Funding
If you’d like to learn more about litigation funding, including how litigation funding protects plaintiffs from debt, reach out to Rockpoint Legal Funding today. We provide fast access to legal funding for plaintiffs and law firms.
For a free consultation, call us 24/7 at (855) 582-9200.
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