A recent article from Bloomberg -- Mass Tort Lawyers Trapped in Cycle of Debt as Cases Drag on, highlights the many potential pitfalls and risks associated with pre-settlement funding. This is article is a must read for anyone either investing in litigation finance or considering a litigation financing deal.
Over the years, and even in these blog posts, we have warned about the risks associated with of pre-settlement funding. Factors such as the complexity of case outcomes, variability in claim resolution timelines, and the potential for unforeseen challenges can and is impacting the success of pre-settlement lending strategies.
As the complexity of these mass tort cases grows, so too does the length of time lawyers and plaintiffs are waiting to receive their fees. For funders like us, it also makes determining the deal size and parameters more challenging. No one wants their money tied up indefinitely by delays and process.
So, what’s the solution?
At RD Legal Funding, we believe it’s all about timing. We take a post-settlement or judgement-based approach. Meaning we do not engage until a settlement has been reached. Entering later in the litigation cycle makes it easier to assess and underwrite these deals with precision and confidence. It also takes more stress off the borrower, giving them the mental space and energy to focus on winning their next case not worrying about paying back a litigation funder.
This approach has consistently delivered strong, reliable results, for our clients and for our business. We’ve said it many times, but it bears repeating, in litigation financing your deal type and lender matters. This Bloomberg article offers great examples and reasons why that is more important now than ever before.
If you would like to understand how our approach to litigation financing is different, reach out and let us show you’re the RD difference.
