How To Choose The Best Litigation Funding Company ~ The International Finance

Wednesday, 3 October 2012

How To Choose The Best Litigation Funding Company

Litigation can be messy, emotional, confusing, and expensive. While you are forced to deal with these situations that are already hard to navigate, go into the financial end prepared and save yourself and your bank account a lot of head ache. There are several litigation funding companies available that will base payment on the profitability of the case's outcome, meaning, if you leave your case empty handed, you will not be charged. So, there is no reason to worry over expensive lawyer and litigation fees that you cannot afford. If you are confused by financing but have a lawyer, then ask him or her for advice on which companies to hire. While it is unlawful for lawyers to physically take money from litigation companies and hand it to you in order to pay your lawyer fees, they are legally allowed to arrange meetings between you and them.

Why do these companies offer cash advances?

  1. 1. It's a great business. Because litigations are always occurring and, especially in this economy, people are not always able to afford the fees associated with them, there is always room for business.
  2. 2. If the litigation companies can calculate the cost-benefit analysis of taking on each case, they can figure out how much they need to charge on the cases that win in order to pay for the cases that lose. If they can get their analysis accurate enough, there is really no reason to make clients pay for fees up front. In short, the pay-out outweighs the risk.

What should you look for when deciding which company to pursue?

The main thing to keep in mind when considering a reliable litigation funding company is what finances you will need covered when involved with your case. Will you be out of work? Will you need medical funding? Will your lawyer demand an upfront lump sum payment? If so, you will need to find a company will outright agree to cover all of that. Companies typically require you to fill out a funding application before they agree to work with you, and so you should know a definite answer on what costs they are willing to cover for your case.

The other thing to consider is how much your maximum payout will be from your case and how this payout will weigh against the costs incurred from a successful case. Every litigation company is different and will make up for their losses by charging either different percentages, multipliers, or fees for successful cases. You will need to consider what these different charges amount to when you agree to work with them and whether you can afford those costs even if you win.

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Amit Singh is a founder of he share his immense knowledge of Finance in this blog.


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