Pre-settlement loans occur when a lawsuit funding company offers a cash advance against the future proceeds of the case. In other words, a plaintiff receives cash now in return for money if and when the case is successful. In this post, we examine the preference among companies in the pre-settlement loan business for automobile accident cases.
By far, the majority of cases considered by pre-settlement loan companies are personal injury actions. Examples of these cases are slip and fall accidents, pharmaceuticals, products liability, workers' compensation, and automobile accidents.
Preference to automobile cases is usually given for the following reasons:
1. Clear Liability Standards: Because drivers owe all other drivers a duty of care when operating their automobile, any breach of this duty results in a potential claim for negligence. Pre settlement loans companies prefer automobile cases because a breach of this duty is very easy to prove.
Analyzing liability in automobile accidents is fairly easy for lawsuit funding underwriters. Usually, the party causing the accident is ascertained through the police report or pictures of the damaged vehicles. Funders frequently consider other evidence, such as depositions, answers to interrogatories, witness statements, and admissions.
Most jurisdictions have traffic laws and the violation of those laws can be offered as proof for negligence purposes. For example, most states have a statute that places the burden on drivers to maintain a safe distance while following vehicles traveling ahead. It stands to reason if the front of a vehicle collides with the rear of another vehicle, the first vehicle did not maintain a safe enough distance.
2. Ease in Assessing Damages: In most personal injury cases, damages are easily calculated. Pain and suffering and bodily injury are compensable under standard negligence law and under most insurance contracts. Specific damages such as lost wages and/or medical bills are also recoverable. Because most medical conditions can be proven through diagnostic tests, the ability of lawsuit funding underwriters to accurately assess the extent of a personal injury plaintiff's damages is greatly increased.
Lawsuit funding underwriters and lawyers alike use these tests to assess the extent of personal injury damages in the case. Other proofs of damages include lost wage claims, out-of-pocket expenditures, loss of earning capacity, expert reports, and operative reports for surgery.
As a whole, physical and specific damages in the routine automobile case are much less complicated than in many other types of lawsuits. For this reason, lawsuit funding of these cases is "bread and butter" for pre-settlement loan companies.
3. Documented Ability to Pay: Most jurisdictions require automobile insurance policies on all vehicles using the roadways. One principal provision in these contracts is coverage for Bodily Injury.
BI coverage is afforded for persons who were injured as a result of the insured's negligence. What this means for attorneys and lawsuit funding specialists is there is available money to compensate the plaintiff for his/her injury. This is important because without available money there is usually no recovery unless the defendant has some net worth.
Essentially these cases are based on a contractual relationship between the insurance company and the insured. The policy provisions exist to protect the policy owner and are considered for the yearly premium paid. What is important for purposes of lawsuit funding or obtaining a pre-settlement loan, is the readily available coverage and the ease in which the case's probable outcome can be determined.
The lawsuit funding business exists primarily to help people with legitimate claims who simply need financial help while their claim is processed. Because of the insurer/insured relationship discussed above, most motor vehicle accident cases are essentially insurance claims which have not yet been paid. For this reason, pre-settlement loans and lawsuit cash advance funding are excellent choices for plaintiffs needing cash now in the form of a litigation loan. Pre-settlement funding companies routinely fund these cases because of the large likelihood a favorable outcome will result.