How do you know if legal funding is right for you? During the November 2015 conference, Litigation Funding: The Basics and Beyond, at the NYU School of Law, David Lat took away some key points on why litigation finance is a good thing. His takeaway consists of 6 virtues of the lawsuit funding industry laid out in this article. Continue reading to learn why litigation finance is good for all, including businesses, individuals, investors and the justice system.
Litigation finance promotes access to justice for all.
Anyone who has been through the legal system knows that it can be expensive. Plaintiffs often feel powerless, especially when it is an individual up against a powerful company. Legal finance helps level the playing field by giving the plaintiff the financial means to withstand a lengthy and expensive trial. Lat mentions that Alan L. Zimmerman of Law Finance Group stated that litigation finance is a way “to provide access to our civil justice system to people who cannot afford it, which is the vast majority of people.” In fact, legal expenses are so high nowadays, that even companies and well-off individuals can benefit.
Litigation finance helps with risk management.
Litigation claims are risky. For example, let’s say you are the plaintiff in a personal injury case that left you unable to walk. Even if this were a promising case (such as a 70% chance you will win and obtain a settlement), there is still risk involved. In order to litigate the case, you need a substantial budget, the case could drag out, and there is still a 30% chance you will not walk away with a settlement.
However, a legal finance company can help mediate this risk by spreading it amongst the claims they are currently handling. Just like stocks, it is a lower risk if you have a portfolio of claims instead of one single claim.
Litigation finance lets companies focus on what they do best.
Lat recalls Lee Drucker, founder of Lake Whillans, a litigation finance and distressed venture capital firm, claiming that litigation financing allows “companies to focus on what they do best, namely, their core businesses.” Legal issues and proceedings can become a distracting nuisance to a company. Funding helps them focus on themselves and running a business.
Drucker also provided the following example:
Say you’re a startup company in the technology space and you also happen to hold a potentially valuable claim of patent infringement. Litigating that claim would cost you millions of dollars and distract you from your core business. By connecting with a litigation finance company, you can monetize your legal claim while freeing up your money and time for what you do best (and what will be reflected in your company’s valuation): developing your tech product, not filing lawsuits.
When it comes to personal injury cases, litigation finance can help ordinary Americans obtain justice.
One panelist at the conference was Joshua Schwadron, CEO and co-founder of Mighty. He describes justice-driven financing as “the great equalizer.” The simple fact is that 70% of Americans live paycheck to paycheck. This means that if they suffer an injury, they are at a financial disadvantage to fight insurance companies. Schwadron argues that the outcome of a case should not be determined by who has more money.
Litigation finance may be able to even reduce the time and cost of litigation.
In addition to helping ordinary Americans, Joshua Schwadron also argued that simply having a litigation financing company involved can push a defendant to settle more quickly. Oftentimes, an insurance company will try to drag out a case, fully intending for the plaintiff suffering financially to settle for a lesser amount. A litigation financing company allows the plaintiff to stick it out and settle for what they deserve.
Litigation finance can apply to various problems within the civil justice space.
It is beneficial for local governments to use third-party funding for public litigation in order to try cases more efficiently and effectively. This outside funding allows a local government to hire the best attorneys for their particular case, instead of the attorneys they can best afford without third-party assistance.
Uplift Legal Funding
Uplift Legal Funding is a premier litigation finance company and works with plaintiffs nationwide. We provide reliable customer service and are readily available to guide you through our three step application process. With us, plaintiffs will experience complete transparency fast funding. It’s time to take control of your legal journey. Any questions? Call us anytime at (800) 385-3660 or visit our apply online.