Lawsuit Advance

Written by Patricia Tunstall
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Timely Lawsuit Advance

A lawsuit advance, by its very nature, is timely since the lawsuit would otherwise be dropped because of the insolvency of the plaintiff. Non-recourse advances by lawsuit financing groups do not have to be repaid; they are the plaintiff's to keep. In the meantime, the funds enable the lawsuit to proceed according to the strategy of the plaintiff's attorney, who is always in charge of all aspects of the lawsuit.

Litigation financing groups do not involve themselves in the conduct of the case, which is properly between the plaintiff and the plaintiff's attorney. After the agreement is signed, the company might contact the attorney to check on the status of the lawsuit, but that is the extent of their involvement. The sole interest of the financing group is in the merit of the case and the financial terms agreed to by the plaintiff. Such groups view each legal claim as an investment in a good lawsuit that, hopefully, will be successful for them and the plaintiff.

No Risk for Plaintiff

For the plaintiff, the acceptance of a lawsuit advance is a win-win situation. Without it, the lawsuit would be at an end with no hope of revival because the plaintiff is now without financial resources, and, probably, desperate. By accepting the lawsuit advance, the plaintiff is able to proceed with the lawsuit, and possibly to a successful conclusion.

There is, then, no risk to the plaintiff, for the funds are not loans that must be repaid under any circumstances. These are non-recourse funds, meaning, they are not contingent on the outcome of the lawsuit. Should the lawsuit fail, the plaintiff owes nothing to the funding company.

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