Over the next several posts we’re going to examine the various issues surrounding legal or lawsuit funding and what consumers should consider to determine if legal funding is right for them.
Part 1 – Understanding and Expectations
Consumer legal funding is intended to help accident victims make ends meet while they await a fair settlement. As accident victims assess the financial options available to them, they should consider consumer legal funding as part of the solution, but not the panacea.
First, consumer legal funding is not a loan. Oasis is only paid back if the accident victim receives a fair settlement. Talking with your attorney can help you understand what your case is worth and if consumer legal funding is a good option for you. While an attorney can’t guarantee how much your case will settle for or how long it will take, he or she should be able to provide a ballpark figure. This information will help you to plan and understand your financial needs and aid in finding a solution going forward.
Expectations
Most personal injury claims do not result in multi-million dollar jury awards for the plaintiff. You should be fairly compensated for your injuries, but take care to measure your expectations against what is reasonable and fair. Understanding the reasonable outcome of your lawsuit will prepare you to plan and make sound decisions.
If your lawsuit is like the vast majority of cases in the system, it is probably safe to say that your attorney is not seeking to obtain a financial windfall. The amount your attorney is seeking should be enough, after fees and expenses, to cover your medical expenses, lost wages, repairs to your car if it was an auto accident, or in the case of a worker’s compensation claim, a sum to cover physical therapy, and then some compensation for your pain and suffering.
Once you have a solid understanding of the expected outcome of your case for both the financial award and the length of time to obtain that award, you can begin to consider your needs and if legal funding is a viable solution to help cover legal expenses. Our next post will look at what those needs may be and the potential sources to cover those needs.
The previous post outlined why consumer legal funding does not increase the number of cases filed. By that same token, consumer legal funding does not increase the costs of litigation and to suggest otherwise is misleading at best. The truth of the matter is that the existence of consumer legal funding allows plaintiffs who are facing dire financial circumstances to get the settlement that they are entitled to without the pressure of losing their home or car, for example, forcing them to make a premature settlement decision.
Just as an attorney decides whether to take on a case based on the facts of the situation, consumer legal funding companies base their funding decisions on the merits of the case as well. Oasis employs underwriters, attorneys, and financial experts who all come together to offer the best product possible to consumers. Since the value of a case does not change based on the presence of consumer legal funding, Oasis staff are conservative in their funding decisions. Given that attorneys in these cases are already working on a contingency fee basis and therefore absorb all costs associated with the case until a resolution is reached, there is no need for an Oasis client to use the funding they receive to pay any legal costs.
Perhaps most important to note is that at no point is Oasis involved in the outcome of a case. We have no further involvement after a contract is signed and a funding is made. We do not weigh in on any aspect of the case including settlement offers and in fact, when cases settle for lower than anticipated, it requires us to reduce our fee. The funding that Oasis provides to consumers does not increase litigation costs, but rather, ensures that plaintiffs don’t have to endure excessive hardship while they wait for a fair settlement to be reached in their case.
Does Consumer Legal Funding Encourage Litigation?
August 2, 2010
There are those who say that consumer legal funding encourages litigation and leads to frivolous lawsuits. This is simply not true. Oasis Legal Finance is committed to upholding the highest professional ethical standards for the industry.
Oasis has set a standard in the industry that stipulates that only individuals with an existing case or claim can receive funding. Put another way, any person who seeks out funding from Oasis must already have an attorney and a viable claim. Funding companies simply do not generate lawsuits and, in fact, most fundings are made at least 6 months after a case has initiated.
In addition to industry standards that prohibit companies from generating lawsuits, there is some data to support this. A 2007 article entitled Examining the Work of State Courts: An Analysis of 2007 State Court Caseloads found an inverse relationship between consumer legal funding and the number of tort claims in the United States. The authors found that over a ten year period the number of legal fundings rose by 37% while tort caseloads decreased by 24% over the same period. Although the decrease in tort claims cannot definitively be linked to the rise in legal fundings it debunks the claim that fundings encourage and increase litigation.
Despite the fact that there are those who would like to suggest that the existence of consumer legal funding is a “bad” thing because it leads to more and more lawsuits by providing a financial incentive to people to file frivolous claims, there is simply no data to back it up. The reality is that consumer legal funding is a valuable resource for plaintiffs who need help making ends meet while they wait for their case to settle.
Legal Funding versus Structured Settlement
April 23, 2010
At Oasis, we get hundreds of phone calls from people seeking financial help, but they are often confused as to what exactly they need; a legal funding or to sell a portion of their structured settlement. The good thing is that this is easy to clear up.
There is a big difference between a legal funding and a structured settlement. Simply put, a legal funding is something you can get BEFORE you receive your cash award after winning your lawsuit, while a structured settlement is how you receive your cash award AFTER you’ve won your case. O.k., o.k., there is more to it than that. Hopefully the following examples will clear it all up.
Legal Funding: suppose Jane, a beautician and a single Mom, was driving home when her car was hit by another car. In the accident, she broke her arm. Jane decided to hire an attorney to sue the other driver in order to get the money she needs to fix her car, pay her medical bills, and pay for her time off work – after all as a beautician she can’t work with a broken arm and can’t earn her paycheck. Unfortunately, the lawsuit is taking far longer than hoped and she’s used up almost all of her small savings. So she applies for and receives a legal funding. The legal funding allows her to pay her bills until her arm heals. In four more weeks she’s back to work and receiving a paycheck. Then, three months later her lawsuit settles and she receives a fair award. She pays her attorney, her medical bills, and the funding company. Case closed.
Structured Settlement: now John, an electrician working on the construction site of a new office building, is involved in a terrible accident in which his hand is crushed. After the emergency trip to the hospital and several surgeries, the doctors determine that he won’t regain full use of his hand. Without the full use of his hands he can’t be an electrician. Since John’s wife works, he’s not in need of financial help to pay his bills. However, because his workplace injury he has been left unable to continue in his career. He files a worker’s compensation suit, and wins a large amount of money, $360,000. However, instead of giving John the money all at once, it is agreed that he will be awarded a structured settlement; which pays John $3,000 a month for the next ten years. This is so John can maintain some income (since he can’t earn a paycheck as an electrician) while he learns new skills for a different line of work.
Again, a legal funding is something you can get before you receive your case award, while a structured settlement is the actual award.
When is Legal Funding a Good Solution – Part 3, Options
February 5, 2010
If you’ve determined that your expenses are going to be greater than your income as you wait for your lawsuit to settle, what options do you have to get the cash you need to pay your bills? As we mentioned in Part 2 of this series, there are several options to obtain financial help and we’re going to briefly go through each to help you determine which might be the best solution for you. With any option it is critical that you weigh the risks, costs, and benefits associated with each.
There are three main avenues to investigate to get the cash you’ll need to help you pay your bills.
1. Family and Friends. Hopefully your family, and sometimes your friends, can be a source to borrow the funds you need. On occasion however this can lead to a sensitive situation and a damaged relationship if you’re unable to pay them back.
2. Credit / loans. This option may not be such a good idea as both credit cards or equity loans require a minimum monthly re-payment. Another monthly payment is usually the last thing you need if you’re already in (or going to be in the future) financial need. As well, this option often takes weeks to obtain the actual cash, and a loan requires something of value that the lender can hold as collateral (i.e house, car, jewelry, etc.) . If your situation ends up where you can’t repay the loan, the lender can take your collateral and your credit score can be damaged.
3. Legal funding. A legal funding is perhaps the easiest and least risky out of all the options. A legal funding is non-recourse, which simply means that if you lose your case then you do not pay back the amount funded to you. Also, unlike a cash advance or a loan, you do not have begin repaying the loan or cash advance in the form of make monthly payments. Legal funding is also quick, from the time you apply, we speak to your attorney, and approve your funding, you can get the cash that very same day.
To help reviewing each of these options, talk to your family and/or a trusted advisor. It is best to get several opinions prior to making a final decision. Also, make sure your attorney knows of your financial situation. Your attorney’s experience may shed some light on the pros and cons of these options. If you choose a legal funding as your solution your attorney will have to be involved, so it would make sense to make them aware of what you’re thinking sooner than later.
The bottom line is, first understand what to expect out of the legal process – more specifically your case. The best person to help here is your attorney. Don’t be afraid to ask them questions about your case and what to expect , not only in the beginning but even as your case is progressing toward resolution. Second, determine if you will need financial help during your lawsuit, and third, if you do need help carefully weigh all your options.
Obviously, we think that a legal funding is most often the best solution as it offers fast cash with the least amount of risk. If you have questions and want to investigate how a legal funding may benefit your situation, feel free to click though to our website link here – oasis.
Legal Funding Will Help You Level the Playing Field
January 29, 2010
The legal funding industry, also known as legal finance and litigation funding, was created for a simple reason – to help plaintiffs with a personal injury claim in financial distress. Oasis takes pride in providing money to plaintiffs to pay for groceries, rent payments, car payments and tuition when no one else is there to help. Legal funding from companies like Oasis helps plaintiffs in their time of need when family, friends and banks are unable to offer financial assistance. Poor credit does not matter to Oasis and Oasis will get the money to the plaintiff quickly.
There is a secondary benefit that plaintiffs obtain from legal funding. The benefit is “leveling the playing field” between the plaintiff and the defendant. Litigation is a multi-billion dollar business where financially strong defendants often wear down cash strapped plaintiffs by not settling cases until years after the accident occurred. The defendants know that plaintiffs often will accept an inadequate amount of money quickly to settle their case rather than wait it out until the plaintiffs can settle for fair value. Legal funding from Oasis can enable plaintiffs to solve their financial problems and wait for their attorneys to settle their cases for a reasonable figure.
A plaintiff in a personal injury case had the unfortunate experience of being involved in an accident caused by the defendant. Legal funding can be used to help the plaintiff avoid a second unfortunate experience by providing financial aid so a fair and reasonable settlement can take place.
Why should you settle your case for less than it is worth. Oasis is here to help.
- Michael Pekin, Esq., EVP Oasis Legal Finance
When is Legal Funding a Good Solution? – Part 2, Income and Expenses
January 21, 2010
Part 2 – Income and Expenses
Now that you’ve found out what to expect out of the legal process and what your potential award may be, it’s time to determine what your financial needs are going to be from now until the time you should expect an award, and what income you have or need to pay those bills. As you read this post, you might think that it is extremely simplistic. That’s because it is. However, you might be surprised to know how many people don’t really have a good grasp on what their income is versus how much money they spend.
If you already have a budget in place to help manage your expenses you’re way ahead of the game. However, if you don’t, don’t worry. Building a family/personal budget itself can be a painful and emotional task – and our guess is, you don’t need any more of that.
What you do need to do though, is to simply write down what your bills and expenses will be each month, from now until you can get back to work and steady and sufficient income. This doesn’t have to be a super-detailed list, but it is important to be as realistic as possible. Items to include, among other possible expenses, might be mortgage/rent, insurance, taxes, car payment, gas, household living expenses, food, and utilities. This list should be specific to your needs.
Once that is done, write down what monthly income sources you have. Then simply match your expected income to your projected expenses. If your income matches or exceeds your expenses, then you’re not really a candidate for legal funding (although there may be some reasons to still consider legal funding which we’ll explore later). However if your estimated expenses exceed your projected income, there are several options; 1. Cut back any unnecessary expenses (i.e. dining out) to bring them in line with your income, 2. Determine if there are ways to increase your income; legal funding, credit/loans, or family/friends.
While planning can be a painful process, once done it can relieve a lot of stress later on. Sure, no budget is perfect and there are always those unplanned expenses that come up, but even a rough budget can help you plan and prepare so they are less stressful. In our next post, we’ll examine those options if you need additional income. More soon!
Bottom line is legal funding isn’t for everyone, but it can be a valued solution if your circumstances leave you in a financial position that is less than desirable. Over the next several posts we’re going to examine the various issues surrounding legal funding and what the customer should consider to determine if legal funding is right for them. As always, if you have comments or questions about this topic feel free to post and/or ask.
Part 1 – Understanding and Expectations
“Have you been injured in an accident that wasn’t your fault? Do you find yourself unable to work or maintain a healthy income as a result of those injuries and therefore unable to pay the bills? Are you seeking the compensation for your injuries that you deserve? If so, then legal funding might be right for you!” Does that sound like a commercial? Of course it does, because that is often the situation that customers of legal funding find themselves in, and if it fits your situation then you understand and are likely looking for resolution yourself.
However, before you pursue a legal funding it is best to consider all of the options to determine if it is a good solution for your individual needs. A legal funding can be a very useful tool if it is carefully considered in light of all other options, but it isn’t the right solution for everyone. Everyone’s financial situation is different.
First, it is important to have reasonable expectations about your legal case because this can greatly impact your decisions. Prior to making any financial decisions, talk to your attorney about your case. Hopefully your attorney has told you what he thinks your lawsuit is reasonably worth, and how long he/she thinks it will take to resolve your case to its fair settlement. If your attorney hasn’t offered this information, then ask them. While they can’t guarantee how much your case will settle for or how long it will take, your attorney should have enough experience to provide a ballpark. This information will help you to plan understand your financial needs and aid in finding a solution going forward and begin to paint a clearer picture as to your potential need for a legal funding.
Assuming at this point you don’t know what your case is worth, unless the injuries you received are significant (i.e. life threatening, paralysis, etc.), know that most personal injury claims don’t result in multi-million dollar jury awards for the plaintiff. In fact these are very rare and take years to move through the legal system. So again, measure your expectations to what is reasonable and fair. Understanding what the reasonable outcome of your lawsuit is will prepare you to plan and make sound decisions.
Therefore, if your lawsuit is like the vast majority of cases in the system, it is probably safe to say that your attorney is not seeking to obtain a financial windfall. The amount your attorney is seeking should be enough, after his fees and expenses, to cover your medical expenses, lost wages, repairs to your car if it was an auto accident, or in the case of a worker’s compensation claim a sum to cover physical therapy, and then some compensation for your pain and suffering.
Once you have a solid understanding of the expected outcome of your case for both a financial award and the length of time to obtain that award, you can begin to consider your needs and if legal funding is a viable solution. Our next post will look at what those needs may be and the potential sources to cover those needs. More soon!
