Available Options in Litigation Funding

Litigation in any form can prove to be an extremely expensive process. Especially in the case of personal injury claims, where the plaintiffs aren't always affording; it is preferred that the ICBC claims lawyer that is hired is on a contingent fee basis. This means that the attorney does not receive any compensation until the case is successfully settled, and typically his or her fees involve a pre-decided percentage of the money that is settled upon.

Many a times law firms advance money for the cost of litigation or plaintiff's find it difficult to identify a lawyer who would be willing to work on a contingent fee. In such cases, the plaintiff is expected to make a significant about of personal expenses which may or may not require support from external funds.

Since it is against the ethics of law for the lawyer himself to lend the plaintiff any money, here are some viable funding options one can choose from -

1. Pre-Settlement Lawsuit Loans

Considered to be an opportunity much like venture capitalism, a large number of litigation funding companies have cropped up over the last couple of years. These companies offer funding packages in the form of 'lawsuit loans' which is in simple words the provision of sufficient money to get you to the end of a case, when you hope to receive a decent amount in settlement.

In these cases, the advances received are offered in the form of 'non-recourse' financing; which means that the plaintiff is not obligated to pay back more than the share of the settlement and if in case your case id dismissed or the judgement is in favour of the defendant, the plaintiff need not pay anything to the funding company.

The only drawback of opting for this source of funding is the high funding fees associated. It is important that you gauge all your options well before you identify a single funding company. Make sure you consult your lawyer and other trusted advisors before making any major decisions.

2. Personal Loans

If the plaintiff has a satisfactory credit history, it is not an impossible task for one to obtain a personal loan for the litigation at an affordable rate of interest. The success of acquiring funding through this route primarily relies on your credit history and your relationship with the lending institution.

Make sure that the fees on interest rate through funding option do not exceed that offered by other funding modes such as the lawsuit loan.

Sometimes in spite of the high interest rates of lawsuit loans, you may realize that it is comparably cheaper to opt for those than personal loans especially in a situation where you are unable to make your payments due to a settlement which isn't in your favour.

In addition to this, you can also approach family members and loved ones who may be generous with you in your time of need. You can reassure your family in the presence and cooperation of your lawyer that they will be repaid out of the share that you receive. You can also consider opting for a home equity loan or other such loans that make use of your assets as collateral.