Pre-settlement funding is a financing tool for claimants who need access to capital in order to invest the necessary resources to succeed at litigation. Prudence requires all members of a pre-settlement agreement to consider a holistic approach to the funding agreements, and any potential ethical actions by all parties during litigation.
Does Consumer Legal Funding Put Consumers in Debt?
The following article was contributed by Eric Schuller, President of the Alliance for Responsible Consumer Legal Funding (ARC).
There has been a lot of discussion if Consumer legal funding is a loan and thereby creates debt for a consumer Consumer legal funding, sometimes called litigation funding or lawsuit funding, provides cash upfront to plaintiffs, to be used for household needs, which are involved in legal proceedings in exchange for a portion of the eventual settlement or judgment. It doesn’t create debt like a loan from a bank or credit card, these distinctions contribute to its classification as a unique financial product rather than a loan or debt.
