If you’re reading this blog, there’s a good chance you’re facing difficult times due to an ongoing or recent lawsuit. Resolving a legal battle, after all, can be a lengthy and stressful process and it can take a long time to receive your settlement. Meanwhile, you’re injured and out of work, your medical and other bills are stacking up, and you don’t have the money to pay them.
A lawsuit advance is a good solution—either pre-settlement or post-settlement funding, depending on whether you’re in the middle of a lawsuit or have already won and are waiting to receive your settlement money. Both types of funding are considered non-resource advances, so you only pay if you lose your case. However, not all legal funding companies are created equal and unfortunately, some firms out there engage in unethical practices that tarnish the reputation of the entire industry.
Enter the American Legal Finance Association: the watchdog of our industry.
The good news: there is a “regulatory body” of sorts in the American Legal Finance Association (ALFA), a trade association that formed in 2004 to ensure fair, ethical, and transparent funding standards within the legal funding industry. This is great news for all of us, because it holds companies like Resolution Funding to the highest standards, and most importantly, protects those who engage legal funding companies from having the wool pulled over their eyes.
You might get the picture already, but to make it even clearer, here are four reasons you should only work with settlement funding companies that are ALFA members:
Two words: guaranteed transparency.
ALFA members must obtain written acknowledgement from your attorney before funding your case. While this is an extra step on your side, it’s a step that protects you because your attorney must review your contract with us before we go any further. We make our contracts easy for anyone to understand, but it’s always helpful to have your attorney review a legal document to know exactly what it says.
You’ll know for certain that your legal funding company isn’t getting overly involved.
ALFA member firms agree that they will never interfere in clients’ litigations or try to influence them in any way. This means you never have to worry about your lawsuit settlement funding company overstepping their role—getting you the money you need to pay your bills—by requesting ownership in your litigation or something similar.
You won’t receive more funds than you need (and have to pay back more).
ALFA members aren’t allowed to intentionally over-fund a case. They also must be reasonable in negotiations with clients in reducing their outstanding balance in a case where the client received a substantially lower settlement than anticipated at the time of the advance.
If you’re being referred to an advance lawsuit funding company, it’s for good reason.
Why do we say so? Because ALFA members don’t pay commissions or referral fees to any attorney or employee of a law firm. If an attorney tells their client to consider working with us, it’s for one of two reasons: they hear good things about our practices and processes or they have personally had a good experience with us before.
Every day, we talk with clients who are stressed and scared—and need a quick solution. Sadly, there are legal funding companies out there who prey on these people, and as a young industry, there are still firms in business that are not ALFA members. However, any firm that has put forth the effort to pursue ALFA membership is one that maintains high ethical standards and fair business practices. You’ll get standard documents with clear payoff schedules that are easy to read and understand. And, you’ll know you’re working with a company that has your best interests in mind.
Resolution Funding is a proud member of the American Legal Finance Association, and we encourage personal injury victims involved in lawsuits who need non-recourse legal funding to learn more about the ALFA and how it holds its members to the highest standards. Visit www.americanlegalfin.com to learn more. We’re confident you’ll see why it’s important to choose an ALFA member as your legal funding company.