Litigation funds – also known as litigation financing, settlement advance payments, litigation advance payments, pre-reconciliation funds, reconciliation funds, cash advances, etc. – provide cash advances to clients and lawyers based solely on the merits of pending cases or cases process. settlement.
Prepayment before settlement is a cash advance payment in pending litigation. The fund company can only seek repayment from the lawsuit itself. This is not a loan. This is only a transfer of the client or the attorney's interest in the expected litigation. If there is no recovery, there will be no repayment. Is it ethical for a lawyer to recommend his client’s prepayments before settlement? Yes. As long as: 1] the recommended lawyer has no financial interest in the litigation financing company; 2] the recommended lawyer does not profit from the transaction;  the litigation fund company does not participate in the litigation of the pending litigation. The benefits of recommending clients to litigation finance companies are obvious – alleviating financial distress, providing immediate financial assistance during difficult times, and being able to hold on to finding better solutions.
The advance settlement process is simple. A full two-page application form is required to evaluate the lawsuit. The case of the pending litigation will be assessed and all litigation-related issues/doubts will be referred directly to the lawyer handling the litigation. A decision is usually made within 24-48 hours of receipt of the application and supporting documentation. Then the customer decides whether to continue. The contract will be forwarded directly to the attorney for review, which will outline the transaction, process, rate and cost and how the customer will receive the payment. As long as the settlement proceeds, the lawyer is required to pay the lien of the sponsoring company.
The prepayment after settlement is a cash advance payment in the settled lawsuit. Why do customers or lawyers need to make advance payments for already resolved cases? Because in most cases, payments will be delayed due to court order approval, property distribution agreements, medical insurance solutions, liens and judgment solutions or insurance companies delaying the feet. Unlike prepayments before settlement, the prepayments process after settlement is more streamlined. After all, the case has been resolved and there is a release or settlement agreement that outlines the settlement amount, the attorney's fee and the client's net settlement. With this information, the litigation financing company can confirm the settlement, draft the agreement and fund the transaction. benefit? Provide clients with immediate financial assistance in the daily living expenses and provide lawyers with instant cash flow to keep their business operations.