Why Are Lawsuit Loans The Best Type Of Litigation Financing?
At RapidLawsuitFunding.com, we understand that there are various ways in which a plaintiff can finance their legal pursuit. Given that there are multiple options, it is important that plaintiffs the best, informed decision possible. With that in mind, we have outlined the four most common ways in which litigants can finance their lawsuits. These include Conditional Fee Agreements, Damages Based Agreements, Fixed Fee Agreements, and Third-Party Funding. We’ve 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 about their litigation financing.
Conditional Fee Agreements Are Not Always Agreeable
One of the methods of litigation financing is to engage in a Conditional Fee Agreement with their solicitor. What is a conditional fee agreement? It’s an agreement between you and your solicitor in which you only pay the lawyer’s fee if your case wins and after you receive the money.
If you’re interested in this form of financing your lawsuit, you should discuss it with your lawyer. The lawyer will -entirely at their discretion – decide whether or not they will accept this agreement or prefer to take their regular hourly fee in your case. 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 settlement money 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 huge legal bill if the case is lost.
The Advantages Of Conditional Fee Agreements
The main advantage of arranging a Conditional Fee Agreement is that it allows you to avoid paying any upfront fees. This will relieve the financial pressure a plaintiff might be facing during the lawsuit. Additionally, any expenses that the plaintiff must pay will only be brought on if the case is successful (if the plaintiff wins the lawsuit and is awarded money). They will typically give a percentage of the settlement money to their lawyer.
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, you must consider that in most civil cases, the settlement amount isn’t enough to cover the conditional fee agreement.
Additionally, there is the old saying, ‘you get what you pay for‘. Your legal team cannot survive on promises of future payouts alone and have to keep the lights on month after month. Don’t be surprised to learn that your case is not a priority for your legal team if you engage in a Conditional Fee Agreement, and that they focus most of their time and effort towards clients that are paying them their regular hourly wage.
Damages Based Agreements May Affect the Plaintiff
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 lawyer’s fees only apply if their case is 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 different 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 judgment 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 of a Conditional Fee Agreement. Firstly, the plaintiff has no upfront fees to pay and only covers the fees if their lawsuit is successful. Secondly, the plaintiff is able to arrange the details of payment delivery to ensure that 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 the case is won, if they get to a point where they believe they are not likely to win, they will stop putting effort into fighting your case.
What’s different than with a Conditional Fee Agreement is that payment is not only made if the judgement is made in favor of the 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. The agreement includes a fixed fee, a list of services that will be given, and any additional services outside of the agreement that may be charged on an hourly basis.
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 don’t face any hidden costs in the end. Everything is clearly stated in the agreement so the client knows exactly how much they will pay once the legal battle is over. . This element of certainty regarding what the plaintiff will pay once the case is closed is what makes this type of financing popular.
Disadvantages of Fixed Fee Agreeements
Once again, all that glitters is not gold and Fixed Fee Agreements are no different in that regard. As with both Conditional Fee Agreements and Damages Based Agreements, all plaintiffs can expect to get what they pay for.
What do we mean by this? 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 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 plaintiffs can get through Rapid Lawsuit Funding, are generally considered to be the best way to fund your lawsuit.
Third-Party Funding is when an interested third party provides a cash advance to a plaintiff who can’ t afford the legal fees and needs financial help. This loan is to be paid back through their lawyer once a successful judgment has been reached. The plaintiff does not have to repay the loan if the case is lost.
Lawsuit loan companies view legal cases as financial assets so they invest in your case.
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 used lawsuit loans to fund their legal battles.
Disadvantages Of Third Party Funding
As with each option mentioned above, there are some disadvantages to third-party funding as well although these are minor. What sets Third-Party Funding apart from other financing options is the fact that the loan comes with a compound interest rate that may increase depending on how long the case takes to settle.
There Are Many Advantages To Third Party Funding
The major benefit of these is the fact that third party loans carry no risk to the plaintiff. You, the plaintiff, don’t have to pay back the loan if you don’t win your case,so you have nothing to lose if you apply for a lawsuit loan.
Additionally, Third-Party Funding (AKA Lawsuit Loans) gives plaintiffs cash up front – usually within 24 to 48 hours! And whereas other litigation financing options can only be applied to the actual lawsuit, third-party funding can be used by the plaintiff in any way. They can use the money to cover their medical bills, school bills, legal fees, etc.
But best of all, using third-party funding will not affect your solicitor’s ability to litigate on your behalf in any way.
Another advantage of 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!
Don’t Hesitate To Get Third-Party Help Through Rapid Lawsuit Funding
Now that you’re well aware of the different types of litigation financing available for plaintiffs, you can make an informed decision regarding which type of funding to pursue. If you’re interested in getting a lawsuit loan today, APPLY NOW with Rapid Lawsuit Funding – the no-risk and worry-free solution to financing all of your litigation needs!