If you are looking into securing legal funding you may come across some terminology that you are unfamiliar with. On top of that, some words being thrown around may be familiar but are used differently in legal funding discussions.
There are many terms commonly used in the legal funding industry and are important for plaintiffs to understand when entering into funding agreements. Let’s take a look at some of the most common terminology used in legal funding.
Advance
In legal funding, an advance refers to the financial assistance provided by a funding company to plaintiffs or law firms involved in a lawsuit. This advance is typically provided to cover the costs associated with pursuing the legal case, such as attorney fees, court expenses, medical bills, living expenses, and other financial obligations.
Funding Agreement
The contract between the plaintiff or law firm and the funding company outlining the terms and conditions of the funding arrangement.
Non-Recourse
Legal funding where the plaintiff is not required to repay the advance if they lose the case.
Recourse
Legal funding where the plaintiff is required to repay the advance regardless of the case outcome.
Underwriting
The process by which the funding company evaluates the merits and potential outcomes of the case before providing funding.
Funding Fee
The fee charged by the funding company for providing the advance, usually calculated as a percentage of the amount funded.
Case Evaluation
The assessment of the legal and financial aspects of a case to determine its suitability for funding.
Settlement
The resolution of a legal case through an agreement between the parties involved, typically resulting in the payment of damages.
Verdict
The decision reached by a judge or jury at the conclusion of a trial.
Collateral
Assets or property that the plaintiff may be required to pledge as security for the funding advance.
Assignment
The transfer of the right to receive future settlement proceeds to the funding company as repayment for the advance.
Usury Laws
Regulations that limit the amount of interest or fees that can be charged on financial transactions, including legal funding agreements.
Legal Funding From Cash Now Funding Group
Are you or a family member in need of financial assistance due to a lengthy legal battle? Are you preparing for a long-term legal battle to get the compensation you deserve? Cash Now Funding Group can be the financial lifeline you need while your case settles. Applying is free and confidential & no credit check is required.
