Lawsuit Funding Companies (LFCs) can help some plaintiffs by funding some kinds of lawsuits. LFCs help plaintiffs, but only when it makes sense for the LFC. If the plaintiff needs $500 for their lawsuit, funding comes quickly. If the plaintiff needs $20,000, funding depends on careful and successful due diligence by the LFC.
From a Google Search, you get the impression that you can get money for funding your lawsuit in as quickly as one to three days. While this can happen, it’s more likely to take three to twelve weeks.
Presuming you qualify to have a Lawsuit Funding Company (LFC) fund your lawsuit, the speed at which this happens depends on your paperwork, your lawyer, your debtor, and the complexity of your case.
When you sue someone, there is a staggering amount of paperwork generated and research done. When you hope to get funding from a LFC, you must again deal with this paperwork.
Some LFC web sites have online forms, so you can “instantly” submit your application. They hint that action (money coming to your door) can happen in 24-72 hours.
Less than one time in a hundred will this really happen within 72 hours. In many cases, if all parties are ready and cooperate quickly, one can know if they qualify for money within a week. Actually getting cash comes much later.
Because funding lawsuits has risks, LFCs must perform their due diligence. The LFC must know the nature of the case, where the case has been filed, damages sought, the expenses the plaintiff has incurred, etc.
Any plaintiff wanting their lawsuit funded needs to be aware of how much documentation is required before any payoff can happen. The delays in getting a lawsuit funded often depend on the time it takes for the plaintiff to supply the required documentation.
Most LFCs prefer to fund contingency-based cases. (See our Contingency Attorneys article.) They do not like to fund (non-recourse) cases for attorney fees and litigation costs. They prefer necessities of life funding for plaintiffs. The reason is because if the attorney wants their fee or costs “up front”, it means the quality of the case may be questionable.
All parties should be “hungry” for resolution. LFCs reduce a client’s hunger to settle too early for too little, which costs both the client and attorney money.
When finding a LFC, do not believe the “instant” funding pitch. Most Lawsuit Funding Companies have the same product. It makes no sense to talk with ten LFCS. You should look for reputation, length of time in the business, and customer service.