Case Cost Financing (Case Cost) allows plaintiffs’ attorneys to have their case expenses paid as they pursue justice for their clients. Lawsuits are very expensive to litigate and depending on the kind of case, it can be years before a final outcome. Once an attorney decides to represent a client, the bills start to mount. While a case proceeds in court, plaintiffs’ attorneys need to find a way to get those bills paid. Most attorneys have a multitude of cases they are litigating, so those expenses can run into the high six figures quickly.
Some plaintiffs’ attorneys may use some form of legal funding to help pay for their case expenses. Legal funding is a huge field and there are different types for different stages in the life of a lawsuit, such as pre-settlement, post-settlement, litigation financing, case cost financing, medical funding, appeal funding, verdict funding, judgment funding and structured settlement funding. Usually when legal funding is mentioned, it refers to plaintiff funding in a pre-settlement context. The huge need for that kind of funding coupled with the large amount of advertising done in the media, has helped popularize pre-settlement funding.
Case Cost funding allows a trial attorney to directly tie his/her case costs to how much financing they need. Expert witness, trial exhibits, depositions, travel costs, document processing and courier services are among some of the expenses where case cost financing could be used. There are many factors that drive plaintiffs’ attorneys to use case cost financing. The structure of contingency fee compensation generally includes provision for plaintiffs’ attorneys to assume the outlay of all the costs. This puts a huge burden on plaintiffs’ attorneys and their cash flow, directly effecting how the law firm operates.
Traditional lenders like banks and credit unions are reluctant to finance plaintiffs’ law firms because of typically stringent funding standards. Traditional lenders often simply don’t understand the ebbs and flows of a plaintiffs’ attorney’s contingency fee practice and are thus unwilling to offer meaningful financing.