Pre settlement lawsuit funding is a relatively new theory. The financing companies extend non – their personal injury cases to be settled by recourse lawsuit loan to claimants who don’t have sufficient funds to take on a legal battle. Personal injury cases can include: any automobile accident, medical or legal malpractice, harassment or discrimination at work, and sexual abuse or rape.

Consider a scenario where the claimant does not have adequate funds to fight the legal struggle. Besides, he may also need cash for his individual needs such as medical expenses in case of a physical injury. He then has the choice to approach any of the pre-settlement suit financing companies for funds. These companies will first examine the value of the case. For this, they may seek the aid of the claimant’s attorney to study the value of the case and also to get an idea of the anticipated settlement sum. Now, based on these facts, the business would offer what is termed as a non-recourse loan. This means that the business buys a part of the claimant’s future settlement in advance. If the case is won by the claimant, he would have to pay a percentage of the settlement amount to the business. If the claimant loses the business also loses, which means it gets nothing.

There is a high risk involved in this resolution. It naturally follows that the amount of fees charged by these companies is also very high. Because sometimes the cases drag on for many years yet, litigation can take a very long time. The claimant needs to have enough money to see him through till the settlement amount is got by him. There may be also be situations when the wounded individual is unable to work or has reduced income. There fore, taking such loans can appear to be the perfect solution.

All said, it is very important to keep in mind that these lawsuit loans can prove to be very expensive and all possibilities should be first explored by a person before settling for this choice.