Florida Personal Injury Funding

A presettlement funding agreement (or PSFA) can bring financial relief to an injury victim, but must be used with caution. Many lending organizations that market PSFAs have sprung up since the late 1990s. Prior to that time, none existed that specialized in lawsuit funding for accident victims, who often waited for years for settlement of their claims, and still do.

In Florida, lawyers are barely permitted to assist their clients in any way with a non-recourse advance funding agreement. They certainly may not sign it, as in agreeing to protect the lender's interest in the financial outcome of the case. In actual fact, many states discourage lawyers from recommending funding organizations to clients. This is not just because of possible conflicts of interest, but also because numerous onerous clauses exist in many of the agreements.

There are many examples of bad, even unconscionable clauses. A funding advance agreement might include a clause that prevents the client from terminating the services of the lawyer in order to choose other representation. If existing legal services are ended, the full amount of the advance may be immediately repayable.

Another clause might force the client to continue pursuing the case, no matter what. If he grows weary of litigation and withdraws the lawsuit, the full amount of the advance has to be paid back in one lump sum. In both of the above cases, repayment is obviously not feasible when no verdict has been rendered in the plaintiff's favor.

Yet another clause might require the lawyer to hold back funds that are in dispute. This means that the lender can claim that any amount of money is due to his or her company. The client then cannot receive those particular funds, until the dispute is resolved in his favor. Then, too, the client may become stubborn and refuse to accept a perfectly fair offer because the advance, its high fees, and the litigation costs will first be deducted from his payment. Obviously, therefore, a great deal of care must be exercised before advance funding is pursued in an injury case. With a good contract, personal injury funding can help a plaintiff pursue justice and receive any monetary award they're due.