How Legal Funding Works

Legal funding is a risk-free cash advance to plaintiffs involved in litigation against the party responsible for their injuries. Unlike a loan, repayment is only required after the case has been won.

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While still in its relative infancy, legal funding is quickly gaining popularity not only among plaintiffs but also among the attorneys and law firms who represent them.

How Legal Funding Got Popular

Since time immemorial, insurance adjusters have only ever had two real tactical advantages to use as leverage during settlement negotiations with injured plaintiffs. Money and time.

And all too often, they weaponized both to compel acceptance of unacceptably low settlement offers. It’s an abuse that goes as far back in history as one cares to research.

Litigation financing, as legal funding is often called, can change all that.

The result is a leveled playing field and balanced negotiations where both sides operate from an “all things being equal” perspective.

How to Qualify for Legal Funding

When you apply for settlement funding, we will gather and review information pertinent to your case.

Here are the basic criteria to qualify and be approved for legal funding:

1. You need to have a strong case and there must be a reasonable belief that it will be resolved in your favor.
   This means the defendant has either accepted liability or your attorney must be able to prove conclusively that the defendant was negligent and that their negligence is what caused your injuries.
   
2. You must be represented by a contingent fee attorney.
   This means your attorney has agreed to represent you and pay all case expenses and will only be paid if they win or settle your case. Cases with pro bono (free) and pre se (self) representation are ineligible.
   
3. The defendant must be sufficiently insured to pay damages after the case is settled.
   It doesn’t matter if the defendant is rich or owns lots of assets; if they are not insured, the case is ineligible for lawsuit funding. There must be an insurance company that, after the case is resolved, is going to cut a check to the plaintiff.

If you satisfy the above criteria, the underwriter will then consider the following:

Your Damages:

• This is the combined total of all the physical, emotional, and financial losses you incurred as a result of the defendant’s negligence. Reimbursement for medical bills and lost wages and compensation for pain and suffering are common examples of damages.
  
  A key point with damages is that there must be proof you sustained significant injury. Your injuries don’t have to be catastrophic or life-threatening, but they do need to be significant. Scuffs, swelling, abrasions, bruising, headaches, ‘loss of consortium’, and the like, by themselves, will not qualify for funding.

Adequate Room For Investment:

• We take the estimated gross recovery and subtract attorney fees, case costs, medical expenses, buyouts for prior legal funding, and any other known or expected liens and deductions to arrive at the estimated net award.
  
  Depending on whether a client needs pre settlement funding or post settlement funding, we use the estimated or actual net award to determine the maximum amount we can invest in a case:
  _{❇️ Pending Cases: We can fund up to 20% of the anticipated net award
  ❇️ Settled Cases: We can fund up to 50% of the actual net award}
  
  You can request any amount you need; just be aware that we can not exceed the maximum.

Attorney Cooperation:

• Your attorney must be willing to participate. They will provide all of the information and documentation about your case. They must also acknowledge that they will repay the legal funding company out of the settlement proceeds after the case is resolved successfully.

Benefits of Legal Funding For Plaintiffs

Missed work and disrupted finances are two of the most common side effects of being seriously injured, and they can cause delinquent bills and late payments. These, in turn, cause unhappy creditors, evictions, repossessions, foreclosures, and bad credit.

Before legal funding became a thing, injured plaintiffs had few financial options to avoid destroying their credit after an accident. Most had to rely on their own savings or help from their families to relieve financial hardships.

Traditional bank loans, home equity loans, and credit cards were commonly used to make ends meet while cases were pending. Of course, utilizing personal credit is not without its drawbacks.

Settlement funding can help plaintiffs stabilize their finances, minimize or eliminate the need to use personal credit lines, and avoid bad credit until their settlement is finalized.

It also provides numerous benefits, including:

1. No credit checks. Your credit score is not a qualifying factor and lawsuit funding is not reported on your credit reports. Conversely, personal credit lines typically require good credit and are reported as debt liabilities on credit reports.
   
2. No win/No pay. You only repay a lawsuit cash advance after your case has been resolved successfully. This means either a negotiated settlement or a jury verdict in your favor. If you lose your case, you are under no obligation to repay the money.
   
3. Gives you time and breathing room. If you’re stressed out and anxious because you’re coming up short on your financial obligations, settlement funding may be the answer. Legal funding can enable you to pay bills while providing the time your attorney needs to negotiate the compensation you deserve. It can also help you avoid accepting a less-than-fair settlement offer just because of your financial situation.
   
4. You decide how to use the money. It’s your money so you can use it however you see fit. This might include getting caught up on past-due bills, paying rent or mortgage, insurance, car payments, medical procedures or copays, or basic living expenses like groceries and utilities.

Legal Funding Can Help Attorneys Too

In addition to helping the plaintiff, legal funding can provide substantial benefits to attorneys. These include:

1. Relieving Pressure: Attorneys must often choose between doing what is necessary to obtain the best long-term settlement for a client and helping that same client resolve immediate financial problems. Legal funding can help with both. It can alleviate much of that pressure by allowing attorneys the time to develop the strongest case possible, while enabling clients to retain positive control of their finances and not feel pressured to take an early settlement.
   
2. No Subordination of Attorney Fees: Legal funding liens are always subordinate to attorney fees.
   
3. No Interference: We do not interfere with case management in any way and attorneys can continue handling the case as they normally would.
   
4. More Time To Do What You Do Best: When you aren’t distracted by clients in financial crisis, you can focus your full attention and resources into achieving the best outcome for your clients.

In addition to consumer litigation financing, TriMark also offers attorney funding on earned fees and law firm funding.

How The Legal Funding Process Works

How legal funding works is super-simple:

First, you complete an application

• You can do that online or if you prefer, give us a call at (877) 932-2628 and we’ll take your information right over the phone. And if you don’t feel like doing that either, fill out the contact request below and we’ll call you back.

Next, we gather case info and talk to your attorney

• We’ll contact your attorney for case-related information. An underwriter will review and (hopefully) approve your application. A funding agreement is sent to you and your attorney via DocuSign.

We send you cash

• We can wire your money directly into your checking account. Or if you prefer, it can be sent FedEx Overnight or MoneyGram. You are then free to use the money for living expenses, medical bills, or however else you choose.

Repayment

• After your case is resolved successfully, the defendant’s insurance company will send the settlement check to your attorney. From it, your attorney will deduct attorney fees, case costs, medical liens, and the cash advance. Then they will cut you a check for everything that’s left.

Can Legal Funding Work For You?

As long as their cases meet certain criteria, plaintiffs who are involved in personal injury lawsuits, employment litigation, and even some state workers compensation claims can apply for legal funding while their cases are either pending or after they have been settled.

Plaintiffs can pursue this option if they need some quick cash to help cover daily costs or expenses associated with their injuries. Seriously or catastrophically injured plaintiffs can also request a customized recurring disbursement program that will ensure their monthly expenditures are covered as they are incurred.

Unlike traditional loans where credit checks and collateral are required, legal funding is a ready source of cash that plaintiffs can tap into.

Plaintiffs can use legal funding to reduce stress, regain positive control over their finances, and give their attorneys more time to negotiate the maximum compensation their cases deserve.