Pre-Settlement Funding for Employment Discrimination Cases: What You Need to Know

Pre-settlement funding for employment discrimination cases is a type of financial assistance that helps victims of employment discrimination pay for their legal fees and other expenses related to their case. This type of financing is available to those who have suffered discrimination in the workplace due to race, gender, religion, age, disability, or other factors and have filed a lawsuit against their employer. Pre-settlement funding helps plaintiffs settle their legal case and receive compensation without having to wait months or even years to obtain a settlement from their employer.

The process of obtaining pre-settlement funding for an employment discrimination case can vary depending on the type of case and the individual plaintiff. Generally, plaintiffs must demonstrate an ability to repay the funded funds and the ability to obtain a successful verdict or settlement in their case. Once approved, the funding company will advance the plaintiff a predetermined sum to cover their case related expenses and legal fees. If the plaintiff obtains a successful settlement, the funding company will be paid back the amount advanced, plus a fee.

When considering whether pre-settlement funding is appropriate for an employment discrimination case, it is important to understand how the process works and the costs associated with it.

In order to obtain pre-settlement funding for an employment discrimination case, plaintiffs must be represented by a qualified attorney and typically must demonstrate an ability to win their case. In order to determine the plaintiff’s qualification for pre-settlement funding, the funding company will typically require the plaintiff’s attorney to provide legal documents and court pleadings that demonstrate a viable case. If a plaintiff cannot demonstrate an ability to win their case, then he or she will not likely be approved for the funding.

In addition to demonstrating the likelihood of a successful case outcome, the plaintiff’s attorney may also need to show that the amount of funding they are seeking is reasonable, based on the value of the potential settlement. Pre-settlement funding companies typically operate on a risk/return balance, meaning that the higher the risk involved in the case, the less likely they will be to approve the loan.

In exchange for the funding, plaintiffs may be required to pay fees to the pre-settlement funding company. These fees may be set up as either a flat fee or as a percentage of the amount advanced. Generally, fees tend to be higher for more complex cases, as the funding company wants to be sure that their loan payments will be repaid.

In addition to fees, pre-settlement funding also carries certain risks. Since the loan is advanced before a settlement is obtained, there is no guarantee that the plaintiff will receive a settlement at all. In addition, even if the plaintiff does obtain a settlement from their lawsuit, the settlement could be lower than the amount borrowed, meaning the plaintiff may still be responsible for paying back the loan. Finally, if the plaintiff does not obtain a settlement, then he or she is still required to pay back the loan.

In order to determine whether pre-settlement funding is appropriate for an employment discrimination case, it is important to discuss the risks and costs associated with the financing with a qualified attorney. The attorney should be able to assess the individual case and advise the plaintiff of the likelihood of obtaining a successful outcome and the amount of funding they are eligible to receive. Knowing these factors can help plaintiffs make an informed decision regarding whether or not to pursue pre-settlement funding.