Litigation finance is when a third party, not related to the lawsuit, provides money to a plaintiff in return for a portion of the money recovered from that lawsuit. There are several reasons that litigation finance is beneficial not only for the plaintiff but also for the attorney representing the plaintiff. The litigation process is expensive and time consuming. The fees for depositions, research, motions, expert witnesses etc can be extremely expensive. Many people who have valid cases abandon the idea of seeking an attorney because they simply cannot afford to. This has caused a great imbalance in the justice system. Litigation finance or funding as it is also known as can help to correct that imbalance. Here are just 3 of the many reasons litigation finance helps the plaintiff of a valid lawsuit.
- Litigation Finance helps those who deserve the maximum compensation for their lawsuit but cannot afford litigation expenses by providing the necessary capital to go forward with their case.
- Litigation Finance helps to minimize the risk of taking a premature settlement that often is much less than the amount deserved for the case.
- Litigation Finance allows the plaintiff to access the best legal assistance possible for the case
The attorney for the plaintiff also benefits from litigation for these 3 of many reasons.
- Litigation Finance allows an attorney to accept cases from clients who could not otherwise afford his services
- Litigation Finance reduces the chance that his client will run out of money during the litigation process and prematurely take a lower settlement
- Litigation Finance helps to achieve the damage award the his client deserves for their claim
Many people wonder what the current thoughts are regarding litigation financing. The acceptance of litigation financing is becoming more prevalent. An article written by Christopher P. Bogart titled “The State of the Litigation Finance Industry in 2017”
states that over the past 10 years litigation financing has been embraced by courts and legislatures all across the U.S. validating the rights of litigants to access financing for good legal representation for complex litigation. The need for good legal representation and the ability to maintain the costs involved with gaining access to that representation is important for all socioeconomic levels of society; not just the wealthy. Litigation financing is a growing, valuable industry that assists those in need of the best legal assistance when seeking justice for their case.