Legal funding, mostly known as litigation funding is also known in some places as litigation financing. It is a mechanism whereby law firms or even individuals fund their legal costs by the assistance of a third party company. It’s likely to be used by plaintiffs and its benefit to the financed party is that it does not need to repay the amount should they lose the case. The financing firm gets a proportion of the shares only if the court judgement is won but the funding must happen if it is worth the risk.
Outlined below are steps which are followed when trying to acquire litigation financing.
Decide on the type of funding you need.
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There are two Types of funding in Legal financing and you have to know which one you are settling for and its consequences. It can be direct plaintiff financing in which you’re given the money to run the day to day legal expenses or legal cost financing at which in settling the lawsuit expenses, a check is delivered to your lawyer from time to time.
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Involve your lawyer.
Your attorney is a major determinant on your process of obtaining legal Financing since he wants to Answer several questions regarding the situation and filling of some paperwork hence The should let him Understand the facts along with your intention to get funding.
Be Aware of litigation funding companies.
Find out about litigation funding companies and the various kinds of injuries for which they offer funding and their area of coverage.
Research on the companies you have chosen.
When you have finally decided on the company to source funds from, research on the company to find out whether it is eligible and pay attention on the complains. You could also visit their offices to find out its physical location.
Assessing the strength of your case.
Consult your attorney to find out if your case is strong enough to obtain Funding and how essential it is.
Considering the proceeds from winning the court judgement that Will go in the payment of the attorney and the legal financing company incorporating the interest, consider if it is worth it. If there are other cheaper alternatives like sourcing your capital from family and Buddies then settle for that.
Enquire all requirements and what It means to find the funds.
This can be done best by asking questions from the company itself like the percentage they are willing to fund, the interest rate they will charge you on the funds they give you and even any hidden fees. Find out about any extra services they offer and should they attract additional charges.
One can now confidently use for the authorized financing providing the Necessary information through the right channels.
Read the contact thoroughly and understand before signing. If you concur With everything in it, you can the append your signature.
Depending on the channel of receiving money, check on whether you have received the amount.