How Pre-Settlement Funders Decide Whether to Give You an Advance


For individuals involved in legal battles, facing financial strain due to mounting legal expenses is a common occurrence. Pre-settlement funding, provided by funding companies can help take the pressure off these individuals. These funds can help plaintiffs cover their living expenses, medical bills, and other financial obligations while awaiting the resolution of their lawsuit. However, the decision-making process for pre-settlement funders is nuanced and is influenced by various factors. Let’s take a look at some of the key considerations that pre-settlement funders evaluate when deciding whether or not to grant funding.

Understanding the multifaceted factors that pre-settlement funders consider when assessing applications is crucial; this is a useful resource for plaintiffs navigating the complexities of securing financial assistance during legal battles.

Strength of the case and merits

The merit and strength of a case forms the basis for the decision made by pre-settlement funders on whether or not to grant the funds advance. Funders assess the likelihood of the plaintiff winning the case and obtaining a settlement or judgment. They carefully review the details of the case, including evidence, legal arguments, and the overall circumstances. Generally the plaintiff is not obligated to repay the pre-settlement funds if they lose the case, which is why you are more likely to get pre-settlement funds if you have a stronger case.

What this does however mean, is that if the plaintiff wins, they will have to repay the settlement funders regardless of whether they get paid. If the defendant cannot afford to pay, the plaintiff could end up owing money to pre-settlement funders. It is therefore important to consider whether it is worth suing if someone cannot afford to pay the amount due.

Type of claim

The type of legal claim is another factor generally considered in the decision-making process. The cases that people commonly receive advances for involve personal injury, product liability, medical malpractice, and other types of lawsuits where there is a clear defendant and liability. The reason for this is that there is less chance of the plaintiff not being awarded anything at all. Understanding the specific details of the legal claim helps funders evaluate the associated risks and make informed decisions.

Estimation of settlement amount

Funders need to estimate what the amount that the plaintiff may receive at settlement or judgment will be. This estimation involves considering things like the extent of damages, medical expenses, lost wages, and any other economic or non-economic losses related to the case. The anticipated settlement amount plays a significant role in determining how much may be offered to the plaintiff in advance.

Attorney and funder cooperation

Effective communication between the pre-settlement funder and the plaintiff’s attorney is vital. Funders often have to work closely with the plaintiff’s attorney to gather the information they need about the case and to assess their progress. A cooperative and transparent relationship with the attorney enhances the funders’ ability to make informed decisions and ensures that both parties are aligned in their expectations.

Applicant’s financial need

The main aim of pre-settlement funding is to provide financial assistance to plaintiffs who are struggling financially during the litigation process. Funders evaluate the applicant’s financial need, considering factors such as medical bills, living expenses, and other financial obligations. This assessment helps firstly, to determine the amount of the advance and secondly, to ensure that the funds are allocated appropriately.


Things in the legal world can vary from one jurisdiction to another. Pre-settlement funders have to take into account the specific laws and regulations governing legal funding in the jurisdiction where the case is being litigated. This helps funders navigate potential challenges and comply with regulatory requirements.

Assessment of legal fees and costs

Legal fees and costs associated with the litigation process can impact the overall financial outcome for the plaintiff. Funders must therefore assess the estimated legal fees and costs, including things like attorney fees, court expenses, and expert witness fees. This evaluation helps determine the net amount that the plaintiff is likely to receive from the settlement.

The decision-making process for pre-settlement funding is therefore a comprehensive evaluation that balances legal, financial, and risk-related factors. The goal is to provide plaintiffs in need with financial assistance, while ensuring that the funding company makes sound and informed investment decisions. The plaintiff should however also be aware of the defendant’s ability to pay so that they do not end up unable to pay a high interest loan.

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