We are well aware of the heavy costing a lawsuit requires. It is one of the reasons why millions of cases are not reported due to the huge expenditure it needs for the plaintiff. While on one side it is encouraged to report civil wrong in the court of law, there are less was of doing so if you have lack of money. Financial assistance is not a new concept however; it has boosted its importance in the past few years. There are now institutions which are helpful and working in giving aid to lawsuits. Lawsuit funding is the process in which an individual attorney or legal firm finances his party’s or plaintiff case by availing financial assistance from the third party.
Terms and conditions for availing lawsuit funding
For availing financial assistance in a lawsuit, there are a few conditions or an eligibility criterion which has to be met by the plaintiff. Also, a few non-flexible terms are laid down by these fiscal institutions.
- To understand the lawsuit funding, it is important to now the objective behind the funding procedure. The funding companies do not give money to applicants, or to the legal attorneys. The money is only provided to the plaintiffs who have already filed a case in the court of law. If you want to apply for legal funding, you have to start off by filling the application form and proving required documents
- The legal finance providing companies recover their financial aid only when the plaintiff gets money from a lawsuit. Thus, it is important to have a strong case, powerful case points and more chances to win the case or lawsuit. Also, the defendant must be in a good financial condition to pay compensation after judgement, else the final institutions won’t have measures to recover the invested money.
- A prior agreement has to be signed by the plaintiff agreeing to the terms of the financial institutions. Most of these financial institutes are not legally authorised, thus it is must know about the company prior to signing any agreement.
There is a good or enough margin between the damages done and the compensation used by the court for the loss. It is because the more is the compensation amount or larger the gap between damages and compensation, the higher is the profit of the company. That is why most companies have specific individual scales and they limit themselves from investing in cases below the scale. The percentage of share of the compensation amount is decided prior to signing the agreement. Cash is provided in advance for the litigation process.