The reading level for this article is

: Wensley McKenney

Plaintiff Funding is a controversial new finance area in which a plaintiff secures funding based strictly on the potential financial recovery from his or her pending legal claim. Similar to securing a mortgage against your home, a plaintiff can receive a cash advance against the potential future proceeds from a legal claim. There are no income or employment verifications and if the legal claim has no financial recovery, then the plaintiff is NOT obligated to repay the money.

Certain companies like Global Financial (http://www.glofin.com) offer low cost cash advances to victims of personal injury & work related injuries. The cash advances can be obtained quickly and with very little personal credit, however, there are those that oppose this type of financing. Some lawyers point out that the fees are high for their clients and that other options like dissability insurance or goverment programs may be more beneficial and less costly.

On the other hand, many Law Firms have used this type of financing to market their services to potential new clients and they realize that offering immediate cash flow can help their clients pay bills until they can heal their wounds and get back to work. It is clear that large insurance carriers are content to wait out the financially desperate plaintiffs that are desperate to settle their cases.

Plaintiff Funding can be used for many thing, many of which may directly increase the value of the legal claim. For instance, if a plaintiff does not have healthcare insurance but needs surgery, they may apply for plaintiff funding which can pay for their medical procedure and significantly increase the value of the legal claim. Even though the plaintiff will pay fees for the funding, the increased value of the legal claim will far outweigh the fees charged.

Regardless of your opinion of Plaintiff Funding, it is a new specialty finance area that is here to stay and like all other types of financial transactions it may have benefits or negative aspects depending on the terms and parties to the transaction.


This Financial Services article was written by Syndicated by Article City on 8/19/2005

Wensley McKenney is a graduate of Tulane University and has 15 years experience in specialty finance and personal injury law. glofin.com wensley@glofin.com