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.
I recently received a phone call from a person looking for cash to help them out while they waited for their lawsuit to settle. Simple enough because that’s what we do. However, before they continued they wanted a few things clarified… namely, were they calling the right place? At first I was a bit dumbfounded because after all, the name of our business is “Oasis Legal Finance.” The customer proceeded to say that when they did a search on the Internet there were many companies that were displayed in the search results but many had different terms; lawsuit loans, cash advances, legal fundings, etc., which was confusing to the customer. They asked if Oasis provided loans, advances or fundings?
And that’s when it hit me… sure, we understand that all of the above terms refer to the same thing because all those terms have been used to describe the service we provide as our industry has evolved over time. But in fact the terms lawsuit loan, legal cash advance and legal funding don’t mean the same thing and can indeed be confusing. As a consumer, it is easy to see how they might look at the terms lawsuit loan, legal cash advance, and legal funding as three completely different products/services:
1. A loan, well.., is a loan. A great example is when a bank gives you money to buy a car. You make monthly payments to pay back the loan. If you can’t make the payments, the bank comes and takes away the car.
2. An advance can be a trickier to define. A perfect example of an advance is if your employer gives you an advance on your paycheck. They are giving you money ahead of when you would normally get it. Your employer isn’t loaning you the money. On occasion however the word advance and loan is used to describe the same thing.
3. A funding is… ummm, well what is a funding anyway? Traditionally the term funding has been used to describe a transaction where one person/business provides cash (funds) to be used for a specific purpose; i.e. we’re funding the community project, or we’re funding our retirement account.
So, why then were all these terms used to describe the same service? As many industries grow from just starting out to being established in the marketplace, the terminology to describe the business (industry) and/or its products can change for several reasons. When the legal funding industry first began, there was nothing like it in the market. Providing people involved in personal injury litigation with cash to pay for basic living expenses while they waited for their lawsuit to settle was almost completely unheard of. As well, the term “funding” didn’t really exist with the same meaning as how it is being used today. Instead, words like “loans” and “advances” were used in absence of a more accurate descriptor because that is what the consumer was used to.
None of the traditional definitions for words like loan or advance, or even funding provided a perfect match for describing what companies like Oasis Legal Finance, does. So, over time we’ve adopted legal funding as the most accurate descriptor of the service we provide.
Contrary to a loan, a “legal funding” does not require monthly payments, and while it does require a valid legal complaint and an attorney to base the transaction on, the transaction is non-recourse. Non-recourse simply means that if the person’s case is lost, then the person does not have to repay the funded dollars to the funding company. This is a significant, game-changing difference versus a loan!
So, what do so many companies still use words like lawsuit loan, and cash advance? I’ll tackle that in my next post…
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.
Change of View: Attorney Now Finds Value in Legal Funding
February 26, 2010
I want to share a story with the attorneys that are still ambivalent about legal funding. Yesterday I had a conversation with an attorney in Florida, about his client that was in desperate need of money or her house was going into foreclosure. The attorney told me that his client, a nurse of 20 years, could not continue to work in the same capacity after her fusion back surgery. The surgery was required as a result of injuries she suffered in a major car accident. In fact, she may never again be able to bear weight on her feet for an extended period of time.
The attorney continued to say that his client is the bread winner in her home and is raising three children. The attorney mentioned that she has nowhere else to turn for money. She has no living parents and her credit cards are all at there limits! The attorney told her to call Oasis Legal Finance and they will be able to help her get the financial aid she needed.
This is not an atypical case for legal funding. What is new is the change in view from the attorney. Two years ago this same attorney told me he would NEVER refer a client for legal funding.
I called him to thank him for the referral and asked him what had changed his mind. He told me that he lost two clients last year because he wouldn’t let them get legal funding, even though they needed the money. However, he only found out the reason he lost those two clients later, after they had switched attorneys. He also found out that each of their cases settled for over 100k. He told me he would never make that mistake again. He would use legal funding and would refer his cases to me as long as I listen to him about the funding amount because he knows the case the best. He continued that if I could work in that capacity that we would have a long happy relationship.
I assured the attorney as I do all my attorneys all over the country that Oasis Legal finance is the largest legal funding company for a reason and I would never over fund his cases. We now have a great working relationship and he only calls me when his clients are in a financial bind and need money quick.
- Ila Mellul Sr. Legal Director
Legal Funding Makes A Positive Impact!
February 23, 2010
One of the benefits of working in legal funding at Oasis Legal Finance is that we get the chance to help people all over the country. The individual stories of the people we help through legal funding are varied and the scope of their situations often helps us realize the positive impact that legal funding truly has to improve their lives.
We have heard from truck drivers, waitresses, school teachers and construction workers. While their individual circumstances differ, the reason they come to Oasis looking for pre settlement legal funding is the same. These people were living their lives, playing by the rules, and doing their best to take care of their families. They worked hard, and then, through no fault of their own, a negligent driver intervened and upset the careful order of their lives.
No one plans to be in an automobile accident, and no settlement can truly make a plaintiff whole. No one compensates the plaintiff for missing their kids’ baseball games because they had to go to therapy. And nothing can compensate the plaintiff for the heartbreaking conversations around the dinner table when the parent, unable to work, wonders where they can cut back in order to put food on the table and buy clothes for their kids.
One of the joys of working in the legal funding industry is being able to call a plaintiff who thought that they had nowhere to go to tell them that Oasis has approved their legal funding request, and that the plaintiff would be able to pay the rent, or the mortgage, or for groceries.
At Oasis Legal Finance, we realize that we can help people get through these tough times, and give the plaintiffs a hand up when no one else will.
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
Legal Funding benefits both Attorneys and their Plaintiffs
January 21, 2010
From time to time, we run into situations where Attorneys question legal funding and they wonder how we can actually help them out. The more we work with Attorneys, the more I hear about different ways in which we are able to help the Attorney and the plaintiff with a legal funding.
I got a call from an Attorney that I had only worked with once before. He was calling me to find out what the total payoff was for a previous legal funding. He also wanted to thank me for being able to provide such a wonderful service for him and for his plaintiff.
For this case the attorney had a plaintiff that came in with a significant back injury. He was rear ended by a SUV. They were given an offer right away for approximately $15,000. The plaintiff was in an urgent situation and was on the verge of losing his home. The plaintiff wanted to take the offer so he could keep his home. The Attorney suggested that get legal funding from Oasis. We were able to fund the case for $6000 so the plaintiff could keep his home. This gave the Attorney time to work toward a larger award on the case and gave time for the plaintiff to get the appropriate treatment for his back injury.
Almost a year later, the Attorney was able to settle the case for $250,000. The Attorney was able to get a fair settlement for his Plaintiff and the plaintiff avoided losing his home.
