ABA Journal

December 2018

 

"At its essence, litigation financing is third-party funding of legal cases. Legal financing companies provide a nonrecourse cash advance to litigants—usually plaintiffs—in exchange for a percentage of the judgment or settlement. It is not considered a loan but rather a form of asset purchase or venture capital. If, for example, the financier invests $200,000 and the case settles for 10 times that, the finance firm gets back its initial $200,000, as well as a percentage—anywhere between 10 and 30 percent—of the settlement money. If a plaintiff loses, the financing firm does not get paid."

 

 

 http://www.abajournal.com/magazine/article/litigation_finance_legal_ethical_concerns