Financing a lawsuit provides monetary help when a person seeks legal remedy in a court of law, and does not have the finances to bear the expenditure. The expenses covered by lawsuit financing companies include attorney fees, medical bills, health care, rent and mortgage, food etc. Cases funded by lawsuit firms include personal injury, workers compensation, motor vehicle accidental injury, wrongful death, medical malpractice, product liability, breach of contract, fraud and others.
However, this should not be mistaken for a loan, as it is non-recourse. That is, the client does not have to repay the amount if he or she loses the lawsuit. The risk is undertaken entirely by the companies. A loan, on the other hand, usually has a definite payback schedule within a fixed period. As there is no way of determining how long a case will run, there is no rigid schedule of repayment followed by lawsuit financing companies.
These companies usually lookout for cases that have a strong chance of winning, in order to reduce the risk of losing money. They have an in-house attorney who studies cases, and decides which of those are more likely to win. Subsequently, they fix the...
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