A third-party that funds the litigation process for plaintiffs and law firms does litigation finance. Used by those without solid financial resources, this type of financing is commonly used by plaintiffs instead of defendants. Money from this funding may get used for litigation and even personal matters while a case is ongoing. These legal money advances are not debts because they aren’t reported to the credit bureaus. A plaintiff who’s granted legal financing receives a non-established lump sum payment and if the case loses, the financier receives nothing.
Legal financing prevents plaintiffs from turning to traditional borrowing for litigation and attorney’s fees, personal finances, court filings and living expenses that get affected while waiting for a resolution. Throughout the US, attorneys’ ethics do not let them advance clients money as loans.
Becoming More Accepted
Litigation funding was a taboo. Now, it’s becoming widely accepted. While litigation funding in Canada isn’t illegal, it used to receive qualms.
However, a 2015 Ontario law suit wherein justice Thomas McEwan approved of the third-party funding because of past cases with David vs Goliath similar situations, drastically changed perceptions on this type of lawsuit financing. In fact, Bentham IMF, an experienced litigation financing company is now operating in Canada.
Litigation in Canada involving third-party funding is common in class actions.
Because a case could take months or years for it to get settled, to get funding help from a legal financing company, a case should have enough merit.
One of the main concerns in litigation finance is a conflict with attorney-client privilege. However, companies that finance cases only need information not covered by attorney-client privilege. The financing company doesn’t need all the details. They just need public records such as police reports and pleading. Likewise, information the defense already has gets included. Law suits based on total confidentiality is possible with a third-party doing the financing of the litigation.
The Big Fight
It’s true that whistleblower law suits are a major source of multi-billion dollar settlements. Since 1986, close to $26 billion got recovered by whistleblowers. Anyone who reports illegal activities of an organization because they are employees, contractors, suppliers or clients gets called whistleblowers. They get protected under the law.
Whistleblowers oftentimes go against big corporations. Whistleblowing can get done by a plaintiff for personal legal matters or expose a corporation defrauding the government. Because whistleblowers and their counsel have rising costs in litigating, they seek whistleblower finance.
Any whistleblower may choose to report to the company the illegal activity happening or he or she may report to a large governing organization. When people in higher management are the ones involved, whistleblowers have no choice but to report to an authorized organization to deal with the situation. This is when whistleblowers receive a compensation for coming forward.
Whistleblower financing is powerful. It basically gives any plaintiff a chance to settle what’s right. Litigation finance evens out in court the financial resources between the two parties and helps those who would settle quickly on lesser terms because of insufficient funding for litigating.
For law firms, professionally funded litigation is risk-free for their balance sheets.
For the best litigation support and investment capital for plaintiffs and law firms, see http://www.benthamimf.com for more information.