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.
Bringing legal action against a defendant can be a drawn-out process. During a lengthy claim, plaintiffs often struggle with financial hardships. Legal finance offers a way out of this stressful situation. At Rockpoint Legal Funding, we help you understand this option for funding your case.
Using third-party funding is a newer option that’s evolving to better meet the needs of plaintiffs. You may not be familiar with the process or how it can help you and may want to know more about this type of financing to help you decide whether it’s trustworthy. Learn more about how legal finance is transforming the legal industry below.
How Industry Trends Are Affecting Your Legal Finance Options
Litigation finance options have been around for a few years. Legal financing companies study the prospects of the plaintiff winning the case. They then make financial offers based on the plaintiff’s potential to win a financial award.
However, this segment of the industry continues to develop. Recent changes in how companies offer litigation financing have made the process more appealing. Both businesses and individuals serving as plaintiffs can take advantage of these changes.
Financing for Any Reason
Plaintiffs can use the funding for anything they see fit. They may need help with day-to-day living expenses or seek certain types of medical care that aren’t covered under health insurance.
This funding also provides a risk management benefit, as trustworthy legal finance companies allow plaintiffs to keep their advances even if their cases fall through. When plaintiffs know they don’t have to pay back the funding under any circumstance, they are more likely to avail themselves of this service.
If the financial award is smaller than expected, the plaintiffs don’t have to pay back the difference, either. Ultimately, this lends the confidence of not having to bear the financial risks of bringing a lawsuit alone.
New Regulations
As the legal finance industry grows and expands, more regulations are appearing. Such rules focus on a higher level of transparency from the funding companies. This allows plaintiffs to better understand the process.
At Rockpoint Legal Funding, we welcome the regulations because we already follow them. We always focus on serving the needs of plaintiffs, which is key to meeting the new regulations.
Regulations help plaintiffs feel more comfortable with using capital investment for lawsuits. The entire industry benefits when new regulations weed out companies that don’t operate ethically.
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How Legal Finance Is Transforming Funding Options for Plaintiffs
Plaintiffs of all kinds can make use of litigation financing during lawsuits.
Businesses
Many business lawsuits can be drawn-out cases. They may take several months or years to settle, and insurance companies don’t pay anything to the plaintiffs until the case ends.
Your business could have a strong claim. However, you might not gain access to the funds you expect to win until years later. The strength of the claim doesn’t force the insurer to pay any earlier.
Should the case go to appeal, it may be even longer before you receive a full claim payment. The delays can be devastating for your business’s bottom line and cash flow prospects.
Litigation financing provides the money you need sooner rather than later. Your business can maintain normal cash flow while waiting for award payments.
Businesses can use the legal funding for any purpose. One might use the money to meet day-to-day expenses, while another may choose to use the funding to invest in emerging markets before it’s too late. All of this might be beneficial for the business’s growth prospects.
Individuals
Legal finance options are especially helpful for personal injury plaintiffs who may be too injured to work. Insurance companies often try to draw out paying injury awards by delaying negotiations. Plaintiffs who are struggling with day-to-day finances may accept less money just to get the claims process over with and move on, only to realize it wasn’t enough.
Having access to litigation financing helps individuals meet their daily expenses. They can continue fighting for a maximum award rather than settling early for less.
Some Law Firms Recommend Using Legal Finance
As a plaintiff, your lawyer may introduce the idea of using legal finance. You might not be able to work because of injuries. The lawyer may know that you are struggling with your financial obligations. Third-party law firm financing options may help with financial stress during a lengthy lawsuit.
Speak with your lawyer about any legal finance agreements you are considering. Your lawyer can help you decide whether this is the best solution.
The legal finance company will speak to your lawyer after you apply for legal finance money. The funding company needs to understand the strength of your claim. It asks the lawyer for an estimation of the amount you could win. The company then bases its potential funding amount on this information.
Legal finance companies do not work with plaintiffs who do not have legal representation. You must have an attorney working on a contingency fee basis to use this type of funding.
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Learn More About Legal Finance and How It Can Benefit You
At Rockpoint Legal Funding, we offer a wide range of legal finance solutions for plaintiffs. We can help you understand all your options and discuss whether this kind of funding would be beneficial in your case.
Let us develop innovative funding solutions that perfectly fit the needs of your case. Call Rockpoint Legal Funding today at (855) 582-9200 for a free case review.
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