Pre-Settlement Funding for Defective Products Cases: Pros and Cons
Pre-Settlement Funding for Defective Products Cases: Pros and Cons
In a legal system of fault, consumers have the right to seek compensation when they have been injured by defective products. To ensure that those who have been injured by a defective product can receive justice, recourse is provided through lawsuits, in which people can sue the product’s liable producer. Yet litigation can be a long and expensive process. Pre-settlement funding can provide an effective financial solution for those who have been injured by a defective product.
What is Pre-Settlement Funding for Defective Products Cases?
Pre-settlement funding is an advance against a future settlement or verdict in a legal case. It provides plaintiffs, who have been injured by a defective product, with funds during the litigation process so they can pay for costs and expenses related to their case. This type of funding gives plaintiffs access to the money they need to pursue the case against the liable party instead of taking a lesser settlement offer due to financial hardships.
Pros of Pre-Settlement Funding
The primary advantage of pre-settlement funding is that it gives plaintiffs access to costs such as expert witnesses, medical records, and depositions, as well as to other types of expenses. With this type of funding, they can hire a lawyer and pursue their legal case without worrying about their financial situation.
The process of pre-settlement funding is also very fast and straightforward. Most lenders review the case and approve a loan within a day or two, making it an excellent solution for those who need immediate financial relief.
Another benefit of pre-settlement funding is that it does not require credit checks or collateral. This type of loan is based on the merits of the case and does not require a creditcheck, making it accessible to people who may not otherwise qualify for loans from traditional lenders.
Cons of Pre-Settlement Funding
One of the major drawbacks of pre-settlement funding is that it is an expensive form of financing. The interest rates associated with these loans can be quite high, sometimes up to 25 percent or even more. Additionally, the repayment of pre-settlement funding can add to the overall cost of the lawsuit since it must be repaid in full with interest when the court rules on the case.
Further, pre-settlement funding can affect a plaintiff’s negotiating power. When the loan is repaid, it is usually taken from the total settlement or verdict amount, reducing the money that the plaintiff will receive once the case is concluded.
Conclusion
Pre-settlement funding provides an effective solution for those who have been injured by a defective product and are pursuing a legal case against the liable party. It gives plaintiffs the funds they need to pursue their case, and does not require credit checks or collateral. However, this type of loan is expensive and can reduce a plaintiff’s negotiating power when the court rules on the case. Therefore, it is important to consider all of the pros and cons before pursuing pre-settlement funding in a defective products case.
