Lawsuit Funding
Lawsuit funding is a technique that involves the role of a third party company. This process helps the plaintiffs or the petitioner to get the costs associated with the legal matters sponsored by a third party. The litigants can be the law firms or the individuals. The third parties who provide financial help to the plaintiffs receive a percentage of share in the final settlement or judgement. There is a risk involved for the third party who is investing money in the matter. In case the petitioner or the applicant loses, the money of the third party is lost. There is no legal obligation on the petitioner to pay back the money to the company in case the case is lost. There are a number of parameters on which the company judges the credibility of the case before sponsoring it. One needs to have strong convincing points which stand for the case and the third party must be satisfied completely before providing with the funds. This practice has been widely used in United States of America. The law suit funding has found its application in the cases which involve civil rights, personal injuries, structured settlement and workers compensation. The money which is offered by the third party to the petitioners varies between the range of 10 – 15 per cent of the expected monetary value of the settlement. There is a buffer region provided by the companies in which individuals can request for more money if they feel so. There are legal financing companies which can provide the money for the law suits but this process is generally used by the people who lack financial resources. The money obtained can be used by the petitioner for their personal use also. Apparently legal funding is confused with the unsecured loans. But the lawsuit funding is actually a non-recourse debt. Non- recourse debt is a secured loan in which the borrower or the person who takes money is not personally liable. The money is not to be paid by the borrower or the taker if he loses the case. This comes as a breath of fresh air for people who relied on the personal loans to arrange funds. Thus law suit funding is a process that helps to save the people from the financial disasters that may occur during the long probation period of the disputes. This is definitely a savior for many who do not have access to various financial resources.