Why Legal Funding Is a Growing Trend?

Nowadays, more and more people turn to legal funding to cover their expenses. It allows them to gain access to funds they would otherwise be unable to attain, which can substantially help in times of need. A whole process is best described as a form of a cash advance, where the person receiving the money pursues legal claims.

Whether you struggle with a lawsuit or prolonged inheritance process, legal funding can help you pay down overdue bills and avoid numerous other financial issues. Nevertheless, it is worth investigating why this solution became so popular in recent years.

As it turns out, the answer to this question lies in an intricate combination of the advantages it provides and unique circumstances created by the current economic situation. Besides being a helpful financial resource, legal funding’s growth is also due to the increase in the number of civil cases and unstable economic conditions.

It helps cover living expenses

First of all, legal funding allows you to gain quick access to the cash you may desperately need to cover your living expenses, such as utility bills and rent. As it is not a loan and your credit score does not matter, it is beneficial if you have already explored available loan options.

Once you decide to use this financial tool, you can expect to get the money within a few days after sending your application. In some cases, you may even receive the cash in as little as 24 hours once approved. It makes legal funding one of the most advantageous options if you are hard-pressed for money. Still, you should consult your financial advisor before opting for this solution.

It provides more time to negotiate a good settlement

Another significant benefit of legal funding is that it gives you time to negotiate an advantageous settlement. This factor is valuable when you do not want to accept less than the maximum value of your claim for damages.

For example, if you have been injured and seek sufficient compensation, legal funding can provide much-needed breathing space to work out a more satisfactory deal. This way, you and your attorney gain more time to strengthen your case instead of accepting the first offer that gets put on the table.

You can use the money to pay case expenses, such as expert witness fees, or get the financial wherewithal to go to trial. However, remember that pre-settlement funding is not provided to finance your legal claim.

It helps address rising energy prices

Although your personal life is probably the primary factor why you would consider getting a pre-settlement cash advance, it is not the only element that can influence your decision. More often than not, the state of the world’s economy also plays a critical part in shaping your financial circumstances.

Unfortunately, the economic situation across the globe is in turmoil. Due to Russia’s invasion of Ukraine, gas prices in Europe reached unprecedented levels. As CNBC reports, “day-ahead prices at the National Balancing Point, the UK’s benchmark for natural gas trading, rose more than 10%”. Similar developments take place in the EU, where many countries rely on supplies from Russia.

The tragic events happening in Ukraine have also left their mark on countries situated across the Atlantic. Combined with the climate-related events and the economy recovering from the coronavirus pandemic, it has put an enormous strain on household budgets. Currently, rising US prices are changing how people shop, work and live.

Because of the matters mentioned above, many people suddenly find themselves short on cash. It results in more individuals searching for easy-to-access funds they could use to cover medical bills or other routine expenses.

It is the result of higher filings

According to a 2020 report on the caseload of the federal courts prepared by the Administrative Office of the United States Courts, filings of civil cases in the US district courts grew 16 percent. The same report points out that, in the US courts of appeals, filings have also increased — namely, by five percent. These statistics demonstrate a trend that may explain why legal funding has become so popular these days.

As more Americans go to court, pre-settlement funding is a more attractive alternative than ever before. We might be dealing here with a domino effect, where the more people start using this financial instrument, the more popular it gets.

Besides, although not every case qualifies for it, legal funding covers a considerable amount of cases within the personal injury law category.

Examples of eligible cases include:

  • Pedestrian injuries,
  • Car wrecks,
  • Dog bite injuries,
  • Medical malpractice cases,
  • Product defect accidents.

The bottom line

Legal funding is widely recognized as an attractive option if you pursue a legal claim. It can provide sufficient funds to negotiate a better deal and cover your living expenses before your case settles. However, the reason for its popularity might be something completely different.

As mentioned above, the growing number of civil cases in the US and current global events also play a role in the prevalence of this financial solution. In combination with legal funding’s unique advantages, these elements make it a stand-out option for anyone seeking financial assistance during their settlement process.

Nonetheless, before opting for this solution, consult your financial advisor. They will help you determine if it is the right thing to do in your case and what other alternatives you can explore.