Is Litigation Finance Right for You?

Introduction

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 highlighted some key points on why litigation finance is a good thing. His takeaway consists of six virtues of the lawsuit funding industry, which are 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 an individual is up against a powerful company. Legal finance helps level the playing field by giving plaintiffs 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 (with a 70% chance you will win and obtain a settlement), there is still risk involved. To litigate the case, you need a substantial budget, the process 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 mitigate this risk by spreading it among the claims they are currently handling. Just as with stocks, there is lower risk if you have a portfolio of claims instead of a 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 running their 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 when fighting insurance companies. Schwadron argues that the outcome of a case should not be determined by who has more money.

Litigation finance may even reduce the time and cost of litigation.

Joshua Schwadron argued that, in addition to helping ordinary Americans, 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 a financially suffering plaintiff 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 to try cases more efficiently and effectively. This outside funding allows a local government to hire the best attorneys for its particular case, instead of the attorneys it can best afford without third-party assistance.

Uplift Legal Funding

Uplift Legal Funding is a premier litigation finance company that 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 and fast funding. It’s time to take control of your legal journey. Any questions? Call us anytime at (800) 385-3660 or apply online.