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
Oasis Advantage – Speed of Cash Delivery
January 18, 2010
We have seen a lot of changes in Litigation funding at Oasis Legal Finance. Since day one, we have always been here to help people, but our process continues to evolve to enable us to deliver our services far more effectively than ever before!
When people call Oasis for help, it’s often when they face a personal financial crisis, such as an eviction, or a threatened foreclosure. In these situations, getting money two or three weeks from now is not an option. Our plaintiffs need to get money as quickly as possible or it will be too late to avoid the foreclosure or eviction. Oasis Legal Finance has always prided itself on being the fastest and most responsive legal funding company to our plaintiffs and our attorneys. Part of that is finding new and faster ways to get plaintiffs their money when and where they need it.
Oasis Legal Finance is the industry leader in our ability to get the plaintiff their money the same day they apply. Once we get the signed documents back, we can get the plaintiff their money in less than an hour in some circumstances, using options like Western Union and Ace Cash Express. This is another first with Oasis to best serve our customers.
It is a great feeling to be able to call the plaintiff and tell them that they can pick up their money now! Money when and where you need it is what Oasis Legal Finance is all about.
