Litigation Loans: War Chest For Plaintiffs, Invite To Fraud

A concerning trend in claims management and civil litigation that will have a major impact on insurance fraud is the emergence of “investments” in personal-injury litigation by third-party lenders. Traditionally, personal-injury attorneys finance suits from their own pocket. That includes costs of taking a personal-injury civil matter to trial. Filing fees, process servers, stenographers and expert fees are a risk borne by the plaintiff’s attorney. Reimbursement is realized only if the suit is successful. Thus, before pursuing a claim/litigation, a personal-injury attorney has an incentive to carefully screen potential clients and their claims.