What happens when a potential plaintiff knows that he was wronged, and has a case, but simply doesn’t have the money to pursue a lawsuit? Many times, he is simply unable to obtain justice. But over the years, an increasing number of options have arisen to make sure that those without the funds to hire a lawyer are not excluded from the justice system. The best-known and most common of these is contingency fees – personal injury lawyers who charge no fee up front and do not bill by the hour, but receive a percentage of any eventual verdict or settlement at the end of the case. Another option has also gained attention recently, the practice of lending money to finance litigation for those who cannot afford it.
Litigation financing can come from many sources – specialized companies, large and small banks, private investors, and hedge funds. And the funds are available for all kinds of cases, from medical malpractice claims, to class action lawsuits, even divorce cases.
As one example, a subsidiary of Citigroup recently provided financing for the well-known “911″ litigation on behalf of the workers injured or killed at Ground Zero. As most people are now aware, that litigation was settled (pending final approvals) for over $700 million this past summer. Eleven million dollars from that settlement will be returned to the financiers.
But far more common is the financing of more everyday cases. For example, financing from a hedge fund may enable parents whose infant suffered a brain injury during birth to obtain justice. Without litigation financing, those parents may be unable to pursue their case and obtain the compensation they needed to deal with their child’s condition, and the physician whose negligence caused that condition would have faced no consequences.
Litigation financing is becoming more prevalent as the cost of litigation continues to rise. The cost of pursuing a personal injury lawsuit, especially highly technical cases of medical malpractice, product liability or construction negligence, can be several hundreds of thousands of dollars.
It is for exactly this reason that corporate interests oppose litigation financing. Making money available to fund lawsuits means that innocent victims will be allowed their day in court. This is bad news for those corporations or entities who make their money by abusing the public trust. Our top Chicago accident lawyers are committed to pursuing justice for those seriously injured or killed by the negligence of another, regardless of the costs involved.
Indeed, because of Passen & Powell’s longstanding record of success, our attorneys have the resources to finance all of our cases ourselves. In other words, we have never had to borrow money from litigation financing companies to fund our cases. This is beneficial for our clients, because they are not charged any additional expenses of interest on money borrowed from these firms.
Nonetheless, experts believe that litigation funding is having a positive impact. The Center for Public Integrity, together with the New York Times, conducted an investigation into litigation financing. Their conclusion? Litigation financing is leveling the playing field. Thanks to this financing, litigation is increasingly becoming less about which party has greater resources, and more about the merits of the cases and claims.
Still, our Chicago personal injury attorneys urge our clients to think carefully about whether to accept litigation financing. Interest rates on such loans are often high, reaching 15% or more per year. Therefore, clients should ask whether their attorneys will finance their case themselves, such as the attorneys at Passen & Powell, or whether they will accept financing, and at what cost to the client?
For a free consultation with an experienced injury and wrongful death lawyer at Passen & Powell, call us at (312) 527-4500.