Third-party litigation funding, or litigation financing, was virtually unheard of in the United States not long ago, but is now among the fastest-growing areas of the financial industry. Third-party litigation funding takes many forms, including advances to individual plaintiffs, usually in personal injury lawsuits (“consumer litigation financing”), advances to businesses who are plaintiffs or defendants in commercial lawsuits such as patent infringement lawsuits (“commercial litigation funding”), and financing to law firms or individual attorneys for a variety of reasons (“attorney litigation funding”). Litigation funding of law firms or individual attorneys is sometimes a form of commercial litigation funding depending on the use of the funds.
Commercial litigation funding originally became popular because it enables small businesses and attorneys to bring and stay in cases that would otherwise prove too costly to pursue. Commercial litigation usually involves corporations as both plaintiff and defendant. While many think of commercial litigation funding as helping small businesses and law firms, larger law firms and corporations have begun to use this type of financing as well. Law firms and businesses now regularly maintain portfolios of cases, which acts as a new form of corporate finance.
Consumer litigation funding has also become popular because it enables individuals to bring and stay in cases that would otherwise prove too costly to pursue. Lawsuit funding companies such as LawCash provide advances to individuals in non-corporate lawsuits, and help the injured secure justice against better-capitalized defendants and insurance companies. Cash funding from LawCash is not a loan. Unlike commercial litigation funding, the plaintiffs do not use consumer litigation funding to pay their legal fees or litigation costs. Instead, they use the money to pay expenses that may arise (usually for housing, food, or transportation) so that they can withstand delays and secure a fair recovery.Back to Video Gallery