20 Feb How to Get Post-Settlement Funding in Class Action Cases
Post-settlement legal funding is typically available in a wide-variety of cases. Any type of contingency fee case can meet the requirements for funding as long as the funder can underwrite the paying obligor; there is a written settlement agreement; and the legal fee arrangement is clearly spelled out between the client and lawyer. However, a common question by attorneys handling class actions is whether they can get funding before there is a final approval of their settlement.
Class actions often take many years to resolve even once a preliminary settlement has been reached. The court needs to issue an order granting preliminary approval of the settlement, then the class members are notified and given time to object to the settlement. Then comes the fairness hearing. After that, the court needs to give final approval. Even then, there is often a Special Master appointed to decide whether a claimant qualifies pursuant to the terms of the settlement and if qualified, the Special Master determines the amount of money to which the claimant is entitled. At some point, thereafter, settlement checks are sent out. The huge delays can have a significant impact on law firms waiting for payment in order to pay their bills. That’s why many law firms use post-settlement funding to address the dips in their cashflow.
Most funders will not fund a class action settlement before final approval of the settlement is received. You need to find a funder that will not require a final order approving a settlement before providing post-settlement funding. As with other types of cases, an attorney will have to provide relevant information about the case being funded. For class actions, among other things, that includes the preliminary order approving the settlement.
Post-settlement funding is nonrecourse. That means that absent wrongdoing on the part of the attorney, there is no recourse to you if the settlement falls through.
If you are interested in post-settlement legal funding for your class action cases, contact Sherry Foley, Esq. at email@example.com for a consultation.