If you’re considering getting pre-settlement or post-settlement litigation funding for the first time, a topic you’ve likely pondered is the longevity and history of the industry.
Unlike traditional financing, lawsuit funding hasn’t been around for all that long. Pre-settlement funding was officially established around 1997. People involved in lawsuits awaiting settlements needed somewhere to turn for help with financial difficulties, and traditional funding simply wasn’t and still isn’t a fast or flexible solution. Hence the emergence of settlement funding companies like Resolution Funding.
This New York Times article says that the business of lending to plaintiffs arose when banks, hedge funds, and private investors started putting money into lawsuits. As of 2011, the litigation financing industry was lending than $100 million a year.
For most of the industry’s short history, litigation funding has been unregulated. Why? Because money issued through settlement funding isn’t technically a loan, the business isn’t subject to the same regulations one would find for banking institutions or credit companies. However, this Reuters article from early 2017 says that at least 11 states have adopted laws regulating some aspects of the industry.
The downside of being an unregulated industry is that you’ll discover a wide range of interest rates and pricing structures among settlement funding companies. However, the American Legal Finance Association (ALFA) formed in 2004 to ensure fair, ethical, and transparent funding standards within the legal funding industry. Members of ALFA (like Resolution Funding) are held to the highest standards, which means plaintiffs who choose to pursue litigation financing are protected from any unethical practices among companies that might take advantage of their challenging financial situation.
Through the years, many funding companies have found their way to the marketplace, offering quick cash for those who need it and don’t have other viable options to pay their bills. Resolution Funding was founded in 2012 and is proud to offer industry-leading low rates, straightforward contracts, detailed fee disclosures, and transparent service. Our goal is to help clients involved in lawsuits find successful resolutions and be the “stop gap” they need to stay solvent.
We know that many aren’t familiar with this industry or companies like ours, because we’re not a business you hear much about until you need help and start doing research on your options. We’re always happy to answer your questions. Call us at 855-LAW-ADVANCE to learn more about our practices and what sets us apart.