Financing your Litigation
Justice is expensive. The cost of litigation has long since risen to the point where only large corporations, insurance companies and the wealthiest individuals can afford to press a just cause – and they know it. As a result, people of average means often have to settle for far less than that to which they are entitled … or for nothing at all … simply because they cannot afford to fight.
A partial solution is to proceed on a “contingent fee” basis, which means the attorney takes a percentage of the recovery as his or her fee. This allows one with a strong claim to proceed, but most often results in the law firm recovering more than it would have charged under an hourly fee arrangement, to the detriment of the client.
Contingent fee arrangements are limited almost exclusively to personal injury cases. One who has been cheated in a commercial transaction, bought a “lemon,” or is being denied wages or employment benefits to which they are entitled will have a difficult time finding an attorney willing to accept such cases on a contingent fee basis.
Then there is the matter of out-of-pocket costs. While many law firms will “advance” out-of-pocket costs in personal injury cases, they will only do so when they are fairly certain they will both win and collect, and they generally demand a higher percentage of recovery to justify the “risk” of advancing costs.
It is, of course, the attorney and not the client who is in the best position to assess that “risk,” and it is rare an attorney will advance costs in a case where there is a substantial possibility the case will be lost, or where the defendant has no insurance coverage or will otherwise turn out to be unable to pay.
Recently, another option has emerged. Banks and finance companies, recognizing that attorneys do not take contingent fee cases which are actually “risky,” have developed programs under which they will make loans to finance litigation. Because these loans are secured by the proceeds of the litigation rather than one’s personal credit, these specialty loans are available to people whose income or credit rating would not otherwise justify a loan.
Greystone Legal Associates has relationships with several such lenders. We primarily use National City Bank. We will assist you in applying for such financial assistance, should the need arise.