Is it harder to settle a case with a non-recourse legal funding in place?
Industry experience has shown that legal funding does not impact an attorney’s ability to settle a case. Most companies average funded amount is equal to 10% of the estimated net value of the case. They do this for a couple of reasons. One is to minimize the obvious risk of loss that accompanies the funding of a case. Second, funding is provided only for life’s necessities not for frivolous spending, nor as a replacement for the expected settlement value. By funding only a small percentage of a case’s anticipated value, the legal funding does not jeopardize a client’s willingness to continue with the case, nor does it place an undue repayment burden on the final settlement award which may otherwise interfere with the lawyer’s ability to obtain a fair and just settlement. Actually, ALFA Members provide their clients with funds that greatly benefit the client’s attorney, providing them the time to properly handle their cases toward a fair resolution without having to settle prematurely.
