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Things to Consider When Your Client Seeks Lawsuit Funding-Part II: Can Lawsuit Funding Increase Case Value?

This is the second installment of our series of things to consider when your client seeks lawsuit funding. Yesterday, we explored the issue of financial need. Today, I would like to suggest best strategic use of legal finance programs. Thus, the question today is:

2. Is there potential for the legal funding to increase the value of the funded case?

Lawsuit financing should be used as a strategic tool. Financially distressed clients are not a positive influence on settlement negotiations. In most jurisdictions, legal ethics require that the attorney (the “employee”) take all settlement offers to his/her client (the “employer”). The attorney can make strong recommendations, even withdraw representation, but he cannot “order” his/her client to reject an offer. Thus, an offer made in a time of great financial stress (like a pending foreclosure situation) is likely to be accepted, or, at least, seriously considered, by a financially distressed client. If you found a way to relieve your client’s immediate financial burden, even for a few months, the client’s resolve the settle the case immediately and inexpensively are removed and you have purchased precious time necessary to complete negotiations and obtain improved, case-appropriate results. This writer has been involved in actual cases where six-figure and even seven-figure increases have resulted from strategic well-placed legal funding.

Our next post will explore whether lawsuit funding is a comfortable fit for the case being considered for funding. Stay tuned…

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