Financing Options for Litigation Case Costs.

The cost of civil litigation has continually increased over time. (Yeazell, 2001, p. 193). Research performed by the University of California, Los Angeles School of Law (UCLA) has credited this to many factors, including changes in substantive law and procedural changes. Id. at 183. The change in procedural rules made the focus of litigation not on the trial itself but the pretrial process.Id. at 194. As the importance of pretrial actions rise, the costs associated with the entire case increase also. Attorneys will require more practical sources of attorney financing because of the increase in case expenses.

To help illustrate the rising costs of litigation, use the tort field of products liability for an example. This tort field created a new list of potential defendants who could be subject to a lawsuit. Now, the manufacturer, designer, and any foreseeable defendant in the stream of commerce can be joined in the lawsuit along with the retailer. The plaintiff’s attorney has a very rigorous pre-trial process to complete. The discovery process is going to be very lengthy. Added defendants also mean additional witnesses to gather and depositions to be taken. Attorney financing is certainly needed in order for an attorney to afford all the necessary steps to give his client his best effort. With the additional financing, the attorney can now dig deeper into the discovery process and obtain higher caliber expert witnesses to testify (see link for expert witness cost http://www.seak.com/expert-witness-fee-study/). The additional attorney financing allows for better case preparation and better performance if the case goes to trial.

Historically, an attorney can finance case costs by using a third party or using his own funds. The simplest form of third party financing is a line of credit from a bank. Generally, as long as the attorney can present the bank with a plausible business plan and personal guarantee, the bank will most likely extend a loan to the attorney. This process has been common practice for numerous years.

However, an alternative method to receive funding is through the LitCap Marketplace. At LitCap, we do not require the attorneys to present a business plan. The attorney is also not limited to a line of credit. The cases are funded on an individual basis based on the merits of the case and the merits of the attorney. Therefore, an attorney is entitled to potentially an unlimited amount of capital. LitCap allows for more budget flexibility and a more efficient way for attorneys to run a law firm. The LitCap Marketplace is a new and innovative ecosystem which is re-shaping the litigation financing process. With LitCap your worries of capital or reaching your credit limit with a bank are no more.

Sole practitioners now do not have to try to settle a case to prevent spending in excess of their budget. Firms do not have to worry about the lack of cash flow to fund an additional case because of the number of cases presently tied up in litigation. The LitCap Marketplace allows for the headache of these attorney financing problems to go away. Attorneys can now take the additional case they would have usually passed on and instead expand their business as their reputation grows and their success.

A law firm’s success should not be conditioned on the amount of available funds, like your firm’s budget or a credit line at a bank. The LitCap Marketplace helps prevent firms from becoming stagnant when their success and reputation increases. An attorney’s growing reputation should enhance the growth of his business, not become a burden because of the added case expenses, diminishing the budget and profit margins.

Major economic and fiscal benefits become apparent when using the LitCap Marketplace to fund your cases as opposed to other options. First, your client will receive access to unlimited funds for case cost expenses. With the additional funds made available, the attorney can now use more elaborate presentations at trial and use superior expert witnesses. Thus, enabling the attorney to perform to the best of his abilities for the client. Second, the attorney does not have to be concerned with the expense of litigation. Importantly, the attorney can let his business grow. He does not have to turn cases away because he cannot afford to take them on. Attorneys usage of the LitCap Marketplace allows an attorney’s firm to grow without capital as a barrier. Third, the funds are placed in the attorney’s IOLTA account. Therefore, the interest accrued on the account helps enhance the total amount of legal capital made available to public needs such as individuals living in poverty, promoting the wellbeing of the public.

To receive more information about our product or to complete an attorney membership application contract us directly at 855-645-8377 or by email at linda[at]litcap.net

About the LitCap Marketplace:

http://www.slideshare.net/bhollandlitcap/how-the-litcap-attorney-financing-marketplace-works

http://www.slideshare.net/bhollandlitcap/litcap-webinar-presentation

The University of California, Los Angeles School of Law’s research paper can be downloaded at: http://ssrn.com/abstract_id=315759