Funding Myth #3: Legal Funding Interferes with the Legal Process

Even though legal funding is a viable, respectable way to help fund plaintiffs in their fight for justice, many attorney still are reluctant to recommend legal financing to their clients.  This is due to the myth that the funding can interfere with the legal process.

MYTH:  Legal Funding interferes with the legal process.

Some mistakenly think that once a plaintiff accepts a contract for legal funding that the legal funding company will put pressure on the attorney to settle the case so the funding provided can be repaid.

REALITY:  Legal finance companies never, ever get involved with the lawsuit or case.  In fact, all decisions regarding the case are always independent and made solely by the plaintiff and their attorney. The best practices for the industry are defined by ALFA (American Legal Finance Association).

Legal Finance Industry Best Practices

  1. Agrees to obtain written acknowledgement from the consumer’s attorney before funding their case.
  2. Agrees that their transaction with the consumer shall constitute the entire agreement between the member and the consumer. Each member agrees that they will not take any step to:
  3. Acquire ownership in the consumer’s litigation
  4. Will not interfere or participate in the consumer’s litigation, and/or attempt to influence the consumer’s litigation
  5. Agrees that they will not intentionally advance the consumer money in excess of the consumer’s needs at the time the advance is completed.
  6. Agrees that they will not intentionally over-fund a case in relation to their perceived value of the case at the time of such advance.
  7. Agrees that they will not advertise false or intentionally misleading information.
  8. Agrees that they will not offer or pay commissions or referral fees to any attorney or employee of a law firm for referring a consumer to the member.