Litigation funding is a viable career path for lawyers with litigation experience and for new graduates looking to begin a career in legal finance. The most well known and often disparaged part of legal funding is tort legal finance. Lawsuit loans or non recourse loans are issued to individual plaintiffs for living expenses since often times in injury cases, the plaintiff’s ability to work has been affected by an accident.
The lawsuit cash advance for tort claims provide plaintiffs with a cash payment for personal needs and improve their chances to survive a protracted litigation which hopefully offers the best opportunity for a fairer recovery.
Litigation funding is not without controversy. The industry is emerging and is celebrated by those who claim that funding equalizes the opportunity for justice. A typical criticism of legal finance is that it promotes frivolous litigation and cases being pursued that otherwise would not be if it were not for third party financing. However the evidence points to the fact that the number of tort cases has actually declined over the past 10 years. Most investments are made after a claim has been commenced and a legal team is in place. There is a real bias towards cases that are filed and ready for evaluation. Also, lawsuits with a low probability of success are not necessarily frivolous and therefore the loans on lawsuits for those claims should not be considered frivolous.
Many commentators have argued that because of the high rates of interest, lawsuit loans should be considered a form of predatory lending. However, although plaintiffs charge more for this type of financing than other forms of lending, there is a lack of deception to the consumer. There are numerous disclosures for consumers in legal finance and each plaintiff’s attorney signs off on the advance. In addition, the majority of people receiving advances, are under fifty years of age and own their own home. The largest portion of advances are car accident loans for people who can not work following an automobile accident.