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Lawsuit Financial Guarantee: If You Lose Your Case, You Keep Our Money

This case resulted in a jury verdict for the defendant; however, it outlines the value of seeking lawsuit funding in contentious litigation. You see, qualifying for litigation funding is based on expectations, not results. Does the case look like it has value? Does liability seem to be something that is likely to be decided in plaintiff’s favor? What does the handling attorney think of the case?

In this case, the plaintiff was the widow of a gentleman who was stabbed in a Brooklyn restaurant in 2006. The man was never quite able to get over the incident; he became despondent, deeply depressed. Two years later, he took his own life.

His widow sued the restaurant. The foundation of her wrongful death lawsuit was that her husband’s suicide was directly linked to psychological problems related to the stabbing; the restaurant had served alcohol to her husband’s attacker, permitted him to get extremely intoxicated, and did nothing when witnesses reported overhearing him call a friend to bring a weapon so that he could use it on the widow’s husband. The defense argued that the attacker was not drunk and that there was nothing they could have done to anticipate or prevent the stabbing. In this case, the jury accepted the defense arguments over the plaintiff’s and rendered a defense verdict of no cause of action. The plaintiff recovered nothing.

But, what would have happened if the victim’s wife had applied for and been approved for a lawsuit cash advance against her prospective settlement or verdict? To qualify, her attorney would have had to present records and opinions that suggested that, in his opinion, the plaintiff had a good chance of getting a settlement or favorable verdict. So, let’s assume that the attorney had an honest, professional opinion that the case had a good chance of being successful. Let’s also assume that the amount of legal finance sought was reasonable and fit comfortably into the prospective value of the case. The facts of this case could certainly have been interpreted by a jury (or, for settlement purposes, by a defense attorney and/or insurance company) in favor of the plaintiff. So, in this case, had she been approved for a “lawsuit loan”, she would have received the money within 24-48 hours of her approval. She would have paid no up front fees of any kind. She would have been able to pay her husband’s death related expenses as well as any other important bills and expenses (mortgage, rent, car payments, etc.) that fell behind as a result of her husband’s injuries and subsequent mental deterioration. With her pressing financial issues resolved, all that is left is for her to patiently wait for an outcome in the case, hopefully, for her and the pre-settlement funding company that assisted her, a positive one. Because repayment of legal funding, principal and profit, like attorney fees in personal injury/wrongful death cases, is contingent upon the actual outcome of the case.

Thus, a lawsuit funding company does what even the attorney cannot do; it provides a guaranteed recovery to the plaintiff. In this case, the plaintiff lost the case. There was no recovery. Assuming the lawsuit funding company provided a lawsuit cash advance of $5,000, $10,000, $15,000 or, even, $20,000, the plaintiff was entitled to keep the money without obligation to repay. The risk that a case might fail is the risk taken by the legal finance company is these types of transactions. This simple truth may surprise you, but it is, in fact, true. In this case, had the widow been funded by Lawsuit Financial, for example, we would have told her to keep our money with our compliments and condolences. That is the Lawsuit Financial non-recourse guarantee.