Let’s not make any assumptions
It is easy to think that everybody knows what lawsuit funding companies do, especially if they are looking to work in one, but that may not be the case. So, to make sure we’re all on the same page, here’s what lawsuit funding companies do in a nutshell: they fund lawsuits.
What I mean is that they provide cash advances for plaintiffs who are suing for certain kinds of damages. These advances go towards lawyer’s fees, living expenses and at times, medical fees if there has been some kind of physical injury. There are quite a number of these companies and you can find some of them on some of the top consumer reviews websites.
Now that we have that out of the way
Let’s get to some of the details you may need to know. The most important one is what kind of cases do these funding companies take on. One way of answering that question would be to say that lawsuit funding companies cater to any kind of case that tends to take a long time in court.
The most common kind of case is the personal injury lawsuits, where plaintiffs have been injured as a result of intentional, careless or negligent activities of another person or company. Personal injury lawsuits have several categories including auto accident lawsuits, slip and fall lawsuits and premises lawsuits.
All of these result in injury, which means medical bills and long periods of recovery where the plaintiff may be out of work. These cases also tend to drag out in court so both the plaintiffs and the attorney can apply for funding for the duration of the suit to cater to medical and legal fees along with other expenses.
The other major kind of lawsuit that often requires legal funding is the labor lawsuit. This usually has to do with injuries sustained on the job as a result of unsafe working conditions. You see, most jobs that end up in labor lawsuits are relatively dangerous and it is the responsibility of the employer to ensure the safety of the workers while on the job.
Failure to do that could result in serious injury and incapacitation of the workers. With medical and other bills piling up, such a worker will need legal funding to be able to manage the legal fees and other expenses in the duration of the court proceedings.
Medical malpractice suits are also common customers for legal funding. Patients may go up against health care providers or their health insurer for harm caused during treatment. High medical fees and inability to work make them viable candidates for funding.
In the case of class action lawsuits, the funding may not be a pre-settlement as with the other lawsuits. It takes quite a while between reaching a settlement and actually receiving it, so legal funding is provided post-settlement in this case. Most class action attorneys come for funding to keep their firms afloat while they wait for the settlements to be paid.
Infringement of patents lawsuits are rather expensive given the required expert testimony and the cost of discovery. As a result, the attorneys often seek legal funding to cover these expenses.
Henry de Fort is a lawyer and blogger. He has been featured on top consumer reviews and other legal features. He lives in France with his wife and two cats.