Types of Litigation Financing


Litigation financing companies provide the resources to fight a case in the form of a cash advance. It is offered to anybody who lacks the means to fight a case. Generally, lawyers are not allowed to provide means to their clients. But, they can recommend to their clients, the various litigation Financing options. Litigation financing is available for plaintiffs, attorneys and law firms, to meet immediate financial requirements. There are various types of litigation financing and individuals can seek professional help.

Plaintiffs funding is offered to plaintiffs on a non-recourse basis, which means that the plaintiff does not have to repay the loan if the case is lost. It is like a debt and attracts high interest rates. The amount received from plaintiffs funding is limited to only a certain percent of the expected settlement amount.

Post-settlement financing can be of great help when there is a delay in receiving the settlement, after the case has been resolved. This form of financing is easily available. This is a short-term cash advance.

Appellate financing provides the means to attorneys to pursue a legal case. It also provides funds to plaintiffs, to satisfy their monetary needs. This form of financing is offered on a non-recourse basis. If the case is successfully resolved, the funding company receives a portion of the settlement.

Many funding companies buy structured settlement payments from injury victims. Attorney litigation financing involves loans to attorneys, on recourse, as well as non-recourse basis. Funding companies may postpone the payment of interest till the case is resolved.

Many funding companies provide lines of credit, depending on a law firm’s reputation and profile. The companies usually set a limit for the provision of funds. Many companies make it mandatory for the law firms to settle all their debts, before the ending of each year.

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