Posted On: May 24, 2008 by Mark Bello of Lawsuit Financial Corp.

Things To Consider When Your Client Seeks Lawsuit Funding-Part VI: Does the Legal Finance Company Provide a Cap on Profits?

As has been stated in previous "Things to Consider" posts, lawsuit funding from some legal finance companies can hinder the settlement of a case, if the case encounters unexpected delays or is tried and appealed. Many companies charge administrative fees up front in addition to a monthly interest charge that is compounded monthly (at a deceptive, low sounding rate). It is very important to the potential resolution of your client's case for you to understand and assist in controlling the amount of lawsuit financing the case receives and the profits that a legal finance company charges. Obviously, you can't tell a legal funding company how much to charge, but you can help your client understand his/her options and to choose a prospective lawsuit financial company wisely. In order to control the cost of litigation funding, you might consider asking the potential legal finance company the following question:


6. Does the lawsuit financing company provide a profit cap on its case investment?

Very few lawsuit finance companies provide capped funding. Most legal funding companies charge “front-end” broker and other administrative fees along with monthly “interest”, all of which they compound monthly. These charges, aside from being confusing, do not stop! If the litigation becomes protracted, or worse, goes to trial and is appealed, monthly compounding, over a lengthy litigation and/or appellate process, can easily become cost prohibitive. It is imperative that you consider a case financial company that does not utilize these confusing monthly “interest” formulas and has no “up-front” administrative charges of any kind. Ask the law finance company representative if his/her company is a broker or a principal (if he/she is a broker, your client will probably have to pay a front-end broker fee, deceptively built into the funding amount, as well as monthly compounding on that fee!). Ask the lawsuit funding company if it provides simple formula, capped funding, so that you and your client will know, in advance, the maximum amount your client will be obligated to pay out of case proceeds. And, most importantly, the superior litigation finance company will also compromise the result, when necessary, to assure that principal and profit does not excessively burden case outcome.

Lawsuit Financial Corporation provides capped lawsuit financing to cash-strapped plaintiffs to prevent them from being forced to settle their valuable personal injury cases for pennies on the dollar. Lawsuit Financial does this completely contingent upon recovery; if the case fails, the client keeps our money without repayment obligation. Our legal funding is capped; you will know the maximum charge before your client executes our case investment contract and before you acknowledge our lien in writing. We will also help you settle your case by providing a reasonable compromise if or when settlement circumstances require one. We are the only legal finance company in America that promises, up front, to compromise investment returns if the results are disappointing. We provide case financing for Auto Accident Cases, Slip & Fall Cases, Medical Malpracitice Cases, Construction Accident Cases, Airplane Crash Cases, Train Crash Cases, Product Liability Cases and many more types of personal injury litigation cases. Visit us on the web at www.lawsuitfinancial.com or call us, toll free, at 1-877-377-SUIT (7848). The call and the information are absolutely free.