Why Are Lawsuit Loans The Best Type Of Litigation Financing?
At deltasettlementfunding.com, we understand that there are various different ways in which a plaintiff can finance their upcoming legal issues. With the variety of methods available, it is important that plaintiffs find themselves making the most educated decision possible. With that in mind, we have outlined the four most common ways in which litigants can easy their economic troubles and finance their lawsuits – which include Conditional Fee Agreements, Damages Based Agreements, Fixed Fee Agreements, and Third Party Funding – and highlighted the pros and cons of each. With this information in hand, we’re sure new plaintiffs will be able to make an educated choice with their litigation financing.
Conditional Fee Agreements Are Not Always Agreeable
One of the methods of Litigation Financing that Plaintiffs can choose instead of Lawsuit Loans is to engage in a Conditional Fee Agreement with their legal representation. The way a conditional fee agreement works is, the plaintiff and the lawyer will have a discussion about the case beforehand. During this discussion the lawyer – entirely at their discretion – will decide whether or not they will take their regular hourly fee when representing the plaintiffs case, or, whether they will accept payment for their work only if a judgment is made in favor of the plaintiff. What this means for the plaintiff is that they will only have to pay if they win the case. Usually this payment is a percentage of the awarded judgement, and not a fixed dollar amount.
Essentially, when a plaintiff engages in a conditional fee agreement with their lawyer they are not left with a bill that they are unable to pay. However, even though it may seem like having a Conditional Fee Agreement with your lawyer is a great solution to financial issues, there are some downsides to this kind of agreement as well.
The Advantages Of Conditional Fee Agreements
The main advantage of arranging a Conditional Fee Agreement with your lawyer is that it allows you to forgo paying any upfront fees. This will relieve some of the financial pressures a plaintiff might be facing at the time of the lawsuit. As well (much the same as you would find with settlement funding), any expenses that a plaintiff will have to pay only come to light if a judgement is made in the their favor – and even then it’s only a percentage of the award.
The Disadvantages Of Conditional Fee Agreements
However, even though it may seem like there aren’t many downsides to signing a Conditional Fee Agreement with your legal team, you should be aware of the downsides. Firstly, plaintiffs should be aware that in most civil cases judgments usually will award a financial amount that doesn’t constitute enough to make a conditional fee agreement worth the lawyers time. As well, since plaintiffs will find themselves not paying any money upfront for their representation, they should also be guided by the age-old adage, ‘you get what you pay for‘. You’re legal team cannot survive on promises of future payouts alone, and have to keep the lights on month after month; so don’t be surprised to learn that you’re case will not be a priority for your legal team if you engage in a Conditional Fee Agreement, and they focus most of their time and effort towards clients that are paying them their regular hourly wage.
Damages Based Agreements May Be Damaging To A Plaintiff’s Bottom Line
Very similar to a Conditional Fee Agreement, a Damages Based Agreement is an arrangement made between a plaintiff and their legal representation in which the feels of the plaintiff’s solicitor are only applied if their case is labeled a ‘success’ as defined within the agreed-upon terms of the Damages Based Agreement. However, unlike with Conditional Fee Agreements, these agreements can apply to differing aspects of your lawsuit – including both asset recovering as a result of non-contentious instruction and legal proceedings which are contentiously litigated.
A Damages Based Agreement is applicable if the plaintiff’s legal team is able to find favorable judgement within property interests, commercial arrangements or disputes, and corporate disputes.
The Advantages Of Damages Based Agreements
Clear advantages of engaging in Damages Based Agreements with your lawyer are also similar to those you would find if you had a Conditional Fee Agreement. Firstly the plaintiff will find themselves without any upfront fees to pay. Secondly, the plaintiff will be able to arrange specific regulations and restrictions for payment delivery – ensuring both the plaintiff and the lawyer are happy with the agreement.
Disadvantages Of Damages Based Agreements
Once again, much like with a Conditional Fee Agreement, there are hidden downsides for any plaintiff looking to engage in a Damages Based Agreement with their lawyer. Since the lawyer is essentially working for free until a successful judgement is made, if your lawyer gets to a point where they feel they might not be fruitful in their arguments they will stop putting effort into fighting your case. One thing that differs from a traditional Conditional Fee Agreement however, is that payment is not only made if judgement is made in favor of plaintiff, but also in the case that specific goals and contingents are met by the lawyer.
Fixed Fee Agreements May Not Give You The Best Representation
A Fixed Fee Agreement is a contract signed between a plaintiff and a lawyer in which the lawyer agrees to take a concrete dollar amount for all of the work required to represent them in a court of law. This agreement is usually decided upon after both the plaintiff and the lawyer go over every step of the case and outline the amount of work required. Usually considered an incredibly helpful alternative to paying the traditional hourly fee expected by solicitors, this type of litigious financing doesn’t always work in the plaintiff’s favor.
Advantages Of Fixed Fee Agreements
The main advantage of having a Fixed Fee Agreement with your solicitor is that plaintiffs will not be finding any hidden costs or surprises within their court fees. With a Fixed Fee Agreement there is an element of certainty to what a plaintiff will be spending for the entirety of their lawsuit.
Disadvantages of Fixed Fee Agreeements
Once again, all that glitters is not gold – and Fixed Fee Agreements are no different in that regard. Much like with both Conditional Fee Agreements and Damages Based Agreements, all plaintiffs can expect to get what they pay for – and when you’re not paying anything up front, you can’t expect much. Solicitors know what their value is – even if they aren’t charging by the hour; with that in mind, they are well aware of when they have surpassed the “fixed fee amount” in terms of their hourly services, and might not work as diligently once they’ve passed that hourly mark. After all, you can’t expect a lawyer to work for free.
Third Party Funding Is Generally A No-Risk Solution To Legal Finance Troubles
Third Party Funding, such as the type of Lawsuit Loans given to plaintiffs every day through Delta Settlement Funding, are generally considered the best way to fund your lawsuit without incurring any risk. Third Party Funding occurs when an interested party provides a cash advance to a plaintiff that is to be paid back through their lawyer once a successful judgement has been reached. The best part about third party funding is that these loans are only paid back (with interest of course), if the plaintiff wins their case. Hundreds of thousands of people across the globe have already lived through the benefit of receiving a lawsuit loan!
Disadvantages Of Third Party Funding
Honestly, there are very few disadvantages to third party funding. The only thing setting third party funding apart from the other methods of litigation financing is that Third Party Funding generally has a compound interest rate applied to them, which will increase depend on how long a plaintiff’s case takes to reach a judgement.
There Are Many Advantages To Third Party Funding
As far as significant advantages go, the fact third party loans carry no risk to the plaintiff is one that should definitely be highlighted. Since you don’t have to pay back the loan if you don’t win your case, it’s generally a win-win situation. Not only that, but Third Party Funding (AKA Lawsuit Loans) give plaintiffs cash up front – usually within 24 to 48 hours! And whereas other litigation financing can only be applied to the actual lawsuit, third party funding can be used by the plaintiff in any way – whether it be medical bills, school bills, legal bills, or more! But best of all, engaging with third party funding will not affect or influence your solicitors ability to litigate on your behalf in any way.
Don’t Hesitate To Get Third Party Help Through Delta Settlement Funding
Now that you’re well aware of the different types of litigation financing available for plaintiffs, you can make an informed decision on the best types of funding to pursue. One of the best things about third party financing is that plaintiffs can also use it in conjunction with other methods; for instance, you can take out a lawsuit loan and still negotiate a fixed fee with your solicitor! If you’re interested in getting a lawsuit loan today, APPLY NOW with Delta Settlement Funding – the no-risk and worry-free solution to financing all of your litigation needs!