Interim Funding

Written by Patricia Tunstall
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Interim Funding to Salvage Plaintiff's Case

Interim funding for insolvent plaintiffs who run out of funds during the course of the lawsuit is the purpose of litigation financing groups. Composed of attorneys and investors, or just investors, these groups hope to make a profit over the long run. They also intend to establish a level playing field for individuals in a legal contest with insurance or corporate groups that invariably have unlimited resources.

In a just world, every person who suffers a wrong would have the means to receive compensation or damages for that wrong in order to lessen the emotional, financial, or physical consequences. A person who is physically injured because of the negligence of another driver might need interim funding between filing a lawsuit and final judgment or settlement. It would be unfortunate if the injured person had to drop the lawsuit because of lack of money, but this is commonplace.

Supporting Worthy Lawsuits

There is, of course, no guarantee that a deserving plaintiff will win, or will win enough to compensate for some loss. Insolvent plaintiffs, however, have no chance of even being heard in court. Interim funding provided by lawsuit funding groups at least guarantees the plaintiff's case will be evaluated in court.

This supporting money is given with no risk to the plaintiff. If the lawsuit fails, no money is due the company. If the lawsuit wins, the financial terms agreed to by the plaintiff and the financing group will be carried out, that is, the plaintiff will repay a portion of the settlement proceeds to the group according to the terms of the agreement. The risk is all on the part of the group, which hopes to win more than it loses over the long haul by spreading the risk among a variety of cases.

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