Legal funding and car accident loans are in high demand among people waiting for settlements, and it’s easy to see why. Every year in the US, car accidents cause roughly 35,000 fatalities, according to the Insurance Information Institute. Despite decades of safety reforms, auto collisions remain a leading cause of death and injury in the United States.

If you’ve suffered from a car accident, it can take months or years to obtain your settlement. Few people can wait that long for their settlement, and the financial pressures you’ll face can impact your ability to get compensation from the at-fault party. We can help you get the legal funding and car accident loan you need fast to fight for the full value of your settlement. It’s important to identify and understand the different types of Personal Injury Funding in the marketplace.

How Can I Use Legal Funding?
You can use the cash you get from legal funding in any way you wish. We do not have any restrictions on how you choose to use your money.

Typically, car accident victims use their legal funding to pay off the following critical expenses:

Medical Expenses
The Association for Safe International Road Travel (ASIRT) states that roughly 4.4 million car accident victims in the U.S. suffer injuries severe enough to require medical treatment. You can spend upwards of several thousand dollars to reset a broken bone or have minor surgery. Few people have this kind of money available after an accident.

Waiting for your settlement can cause your medical debts to continue piling up. To avoid any financial problems with your doctor or hospital, you can manage those debts early with legal funding. You don’t have to make a hard choice between paying bills or getting proper medical treatment with the cash you receive.

Vehicle Repair or Replacement
Car accidents will almost always cause significant damage to your vehicle, requiring a repair or replacement. Waiting for months, or possibly even years, for a settlement to repair your car can severely impact your quality of life.

With legal funding and car accident loans, you don’t have to wait to get a replacement car or make the repairs you need. Instead, you can work with PFD and easily pay off the mechanic or dealership.

Paying for Rent, Mortgage, Utilities, and More
Critical financial obligations, such as your rent or mortgage payments, utility payments, and groceries can’t be put off. A car accident may leave you with serious injuries and a lengthy recovery period, during which you are unable to work and earn money.

Your settlement will be critical to rebuilding your life after an accident, but you must win it first – and that isn’t cheap. Pre-settlement legal funding affords you comfort and financial security while you await your settlement.

Personal Injury Plaintiff funding is in the form of a non-recourse advance to individuals with pending lawsuits, predominately in personal injury cases.

Claimants can receive funding for their cash needs, in exchange for selling an interest in their pending claim. Advances are based on the strength of a case (not plaintiff’s credit) and typically do not exceed 10-15% of estimated settlement value per claim.

PFD takes a highly analytical approach to underwriting and utilizes its vast data resources to facilitate the process: 

• Case Value Algorithm: PFD’s proprietary formula computes numerous data points to produce a conservative baseline case value and max advance.
• Attorney Analytics: The Company uses a detailed scoring and reporting system for attorneys and law firms to understand, among other things, case volume and performance history, ROI, and repayment history.
• Background Checks: Before funding a case, PFD thoroughly vets the plaintiff, attorney and law firm, and medical provider for items that may impact the Company’s ability to protect and collect on its lien.

Data and analytics play a crucial role in the entire underwriting process, from document collection and analysis to case evaluation.

Medical Funding, Pre-Settlement Funding and Plaintiff Medical Funding are utilized for numerous types of personal injury cases:

While this list names several of the most prevalent types of cases funded, it is by no means exclusive.

• Motor Vehicle Accidents
• Slip and Falls
• Bicycle Accidents
• Bus Accidents
• Motorcycle Accidents
• Pedestrian Accidents
• Truck Accidents
• Medical Malpractice
• Wrongful Death
• Dog Bite Attacks
• Construction Accidents
• Product Liability

It’s important to understand the different types of funding that exist in Personal Injury:

1. “Medical Funding” – LOC (Letter of Credit) / LOP (Letter of Protection / Lien) model. This is facilitated by working with a doctor directly and he signs the LOP/Lien over to the funder for securitization. This funding is designed to liberate the assets the doctor has on his/her books. The attorney is always the conduit and pays the funder back.
2. “Plaintiff Funding”
   • Pre-Settlement Funding – Pre-settlement funding is a type of settlement loan where you receive a cash advance while waiting for a personal injury lawsuit to be finalized. Litigation can be a slow process, often taking months or years to finalize.The Plaintiff signs the LOP/Lien. The plaintiff is the guarantor to pay back the non-recourse loan if there is a monetary settlement, and the attorney signs an agreement to pay the funder directly from settlement proceeds. ROI is similar to medical funding. This is an advance to the plaintiff on their settlement (usually due to personal financial stress (missed work, loss wages)). While the plaintiff and the attorney both sign the contract, the plaintiff is directing the attorney to pay the Funder back out of the proceeds of the underlying lawsuit.Advances to plaintiffs for essential expenses, including:
     • Rent
     • Living
     • Family
     • Out of work bridge
     • Provide more predictable cash flow to doctors, hospitals, and other providers to complement their other payment types (Medicare, BC/BS, Commercial Insurance, HMO etc.
     • Allows for the focus on delivery of high-quality care, not servicing and collection of receivables.

• • “Plaintiff MEDICAL Funding” – is another form of “Pre-Settlement Funding” however, in this case, the funding is an advance to the plaintiff, strictly for paying for a medical procedure. The funding is paid directly to the medical provider. The Plaintiff and attorney both sign the LOP/Lien. The plaintiff is the guarantor, and the attorney signs an agreement to pay the funder directly from settlement proceeds.

• • “Post-Settlement Plaintiff Funding” – Post-settlement funding helps attorneys, and their clients get needed liquidity now and pay for their needs while the payment is still pending. Post-settlement loans allow victims to start re-arranging their finances.
    • Please note that Plaintiff funding is a non-recourse loan, and you are dealing exclusively with the attorney and client, not with the doctor. However, because we are working with the attorney, who has access to all prior medical, policy limits, accident/incident report, etc., and has vetted the case, as it is on contingency, and they are investing a tremendous amount of money without the guarantee of getting it back unless they are successful, plaintiff funding cases are an excellent investment for funders.
    • The monthly rate is 2.99 % compounded, which equates to about 42.5% per year, as it is compounded. There is usually a standard case monitoring fee of about $300 and an application fee of $300 as well, which is added into the loan and compounds as well. After 3 years, if the case still hasn’t been settled yet, there is a cap on the interest of 250%.

Litigation Finance Industry

Litigation finance has become an integral part of the multibillion-dollar litigation industry; the potential for attractive uncorrelated returns has attracted increased interest and investment from sophisticated alternative capital providers.

Est. U.S. Personal Injury Market Size Per Annum

Selected Market Commentary

In the United States, personal injury accounts for in excess of 160 + billion dollars in personal injury claim settlements. That 160 + billion usually breaks down into 1/3 of the settlement to legal fees, 1/3 of the settlement to medical expenses and 1/3 of the settlement to the injured plaintiff. A further breakdown, as the above diagram illustrates, shows that 4.6 + billion dollars is funded annually for plaintiff medical funding, while another 1+ billion dollars is funded annually to the plaintiff for pre-settlement funding.

The market is constantly expanding, as the annual growth for pre-settlement funding grows in excess of 20% annually and plaintiff Medical funding grows in excess of 25% annually. 

The U.S. spends about 2% of GDP ($400 billion+ per annum) on tort administration and recoveries.

The growth of dedicated capital, along with the continued maturation of the asset class, has led to an unprecedented array of deal sizes and structures designed to address specific plaintiff capital / liquidity needs.

The personal injury market has demonstrated consistent non-cyclical growth, with up to 70% of claims related to motor vehicle accidents.

There are several key factors driving increased demand for legal advances:
Every State has its own nuances. Litigation related funding is currently open to 38 states.

An example of a lucrative state for Plaintiff funding is NY.

NY State Budget Cut Extending Length of Legal Process

– New York: time from filing a case to initial court appearance is 12 months, up from six months about four years ago
– Median time to settlement for all claims is between 30-36 months

Hospitals and Surgeons Less Willing to Perform Procedures on Liens

– Historically, surgeons accepted liens on personal injury settlements for uninsured claimants –With surgeons now less willing to accept a lien instead of upfront payment, legal advance and medical lien factoring companies have stepped in to fund surgeries

Increased Awareness of Legal Advances

– Attorneys are increasingly referring clients to legal advance companies
– States have opined in support of legal advances