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Lawsuit Funding and Medical Malpractice Cases
by
JG Wentworth
•
February 21, 2025
•
4 min
Medical malpractice litigation often involves a complex and lengthy process that can inflict significant emotional and financial strain on plaintiffs. For many, the journey through the legal system is fraught with challenges that extend beyond the courtroom, including financial instability due to mounting medical bills and potential loss of income. This guide explores pre-settlement funding within the context of medical malpractice, providing detailed insights into its mechanisms, benefits, and critical considerations.
What is Pre-Settlement Funding?
Pre-settlement funding, commonly referred to as lawsuit loans or legal finance, provides plaintiffs in ongoing lawsuits with financial aid to cover immediate expenses until a settlement is achieved. This funding is non-recourse, meaning it requires repayment only if the plaintiff secures a win or a settlement in their case. If the lawsuit results in a loss, the borrowed amount is not repaid, mitigating the financial risk for the borrower.
The Specifics of Pre-Settlement Funding in Medical Malpractice Cases
Medical malpractice claims are particularly suited for pre-settlement funding due to their typically high cost of litigation and prolonged duration. These cases demand extensive evidence gathering, including medical records, expert opinions, and continuous legal strategizing, which can be financially exhaustive.
How Pre-Settlement Funding Works
- Application Process: Plaintiffs seeking financial support start by applying with a funding company, which generally requires no upfront payment or credit checks, thus simplifying the application process.
- Case Evaluation: The funding company evaluates the lawsuit’s merits by reviewing case details with the plaintiff’s attorney to assess potential success and estimate possible settlement amounts.
- Fund Disbursement: If the case qualifies, the company provides a cash advance based on the estimated settlement, which the plaintiff can use at their discretion to alleviate financial pressures.
- Repayment Terms: Repayment is contingent on the lawsuit’s outcome. A successful case leads to the repayment of the principal sum along with a fee or interest from the settlement amount.
Advantages of Pre-Settlement Funding
- Non-Recourse Benefit: The non-recourse nature of the loan protects plaintiffs from the obligation of repayment in case of a loss, ensuring financial security.
- Immediate Financial Relief: It offers quick financial support to cover life’s necessities, legal costs, and ongoing medical care, providing peace of mind during the litigation process.
- Credit Stability: Since the funding is not a conventional loan, it does not impact the plaintiff’s credit score.
Get Cash Before Your Lawsuit is Settled
Life doesn’t wait for your settlement, you shouldn’t either.
Considerations Before Applying
- Costs: The costs associated with pre-settlement funding can be considerable. Interest rates and fees may vary significantly, necessitating thorough comparisons and understanding of the funding terms.
- Attorney’s Role: It is advisable to involve your attorney in the funding process to safeguard your interests and ensure that the terms of funding are favorable.
- Industry Regulation: The relative lack of regulation in the lawsuit funding industry calls for careful selection of a funding provider to avoid unethical practices.
Selecting a Pre-Settlement Funding Company
Choosing the right funding company is crucial. Plaintiffs should look for companies with transparent practices, reasonable rates, and positive client testimonials. Consulting with legal counsel can also help identify reputable providers.
Conclusion
Pre-settlement funding offers a crucial financial bridge for plaintiffs in medical malpractice lawsuits, enabling them to manage personal and legal expenses while awaiting the resolution of their cases. While this funding solution offers numerous advantages, it is vital for plaintiffs to approach it with a well-informed perspective, understanding all potential implications and costs. By doing so, plaintiffs can make the most of pre-settlement funding to support their needs during challenging times.
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