The Florida Bar felt that if a lawyer initiates the loan by recommending his or her client to a loan company, it would be unclear if the lawyer was acting on behalf of the client or the lending company.  The Bar was also concerned for the client’s recovery amount after the loan and interest was paid back, along with attorneys’ fees and litigation expenses (Opinion 75-24). 

This left a lot of work for the clients and most companies would not lend to the clients because they did not have an attorney’s opinion to corroborate the client’s needs and if the client would be able to pay back the loan. 

To help those who were truly in need of assistance the Florida Bar loosened its former opinions.  Although, it should be noted that the Florida Bar still discourages the use of non-recourse advance funding companies.  Opinion 00-3 states:

 “This Committee can conceive of only limited circumstances under which it would be in the client’s best interests for an attorney to provide clients with information about funding companies that offer non-recourse advance funding or other financial assistance to clients in exchange for an assignment of interest in the case.  Under theses limited circumstances an attorney may advise a client that such companies exist only if the attorney also discusses with the client whether the costs of the transaction outweigh the benefits of receiving the funds immediately and the other potential problems that can arise.  Only after this discussion may a lawyer provide the names of advance funding companies to clients.”

 An attorney may provide information, such as medical records and accident reports, to the funding company about the case only if the client agrees.  Before the attorney can provide the information he or she must thoroughly go over the effects of disclosure with the client.

 An attorney may honor the client’s valid, written assignment of a portion of the recovery to the funding company, but he or she may not issue a letter of protection to the funding company.

 To sum up, once you and your attorney discuss and determine that pre-settlement funding is right for you, your attorney may give you the names of lending companies.  Your attorney may then provide information about the case to the funding company with your consent and may honor your valid written assignment of a portion of your lawsuit to the funding company.

 Should you and your attorney determine that pre-settlement funding is right for you, please contact Great Bay Capital at 1-866-454-7328.  We want to help Floridians get the what they need today so they can wait for the settlement they deserve tomorrow!

Disciplinary Rule: 5-103(B) states:

“While representing a client in connection with contemplated or pending litigation a lawyer shall not advance or guarantee financial assistance to his client, except that the lawyer may advance or guarantee the expenses of litigation, including court costs, expenses of investigation, expenses of medical examination, and costs of obtaining and presenting evidence, provided the client remains ultimately liable for such expenses.”

Your lawyer cannot lend you money. He or she may advance money to cover the expenses for the case, but not for your everyday expenses. Medical bills can become quite costly. For some people, making ends meet can be extremely difficult after accident. Getting a loan from a bank can be problematic or nearly impossible if you are out of work because of your accident.

Pre-settlement funding can help. Your lawyer can assist you in the process by making sure the funding company has all the information on the case it needs to make an informed decision to advance you money. Although, your lawyer may not guarantee or cosign the advance, he or she can help you through this process. You will solely be responsible for repaying the advance from your settlement.

If you or your client are in need of pre-settlement funds in Virginia or any other State, please contact Great Bay Capital at 1-866-454-7328. Let us get you funds today so you can wait for the settlement you deserve tomorrow!

LEO: Acquiring an Interest in Litigation — LE Op. 1155

     Acquiring an Interest in Litigation — Personal Injury Representation: Assisting Client to Obtain Loan from Finance Company.

     November 15, 1988

     You advise that you have represented personal injury clients for many years and are confronted 90 percent of the time with an innocent victim of an automobile accident who has incurred unanticipated medical bills and injuries which have put him or her out of work. In almost half of these cases, your clients do not have the benefit of health insurance or disability insurance. You are also confronted daily with requests for a loan from your clients in order to obtain proper medical treatment and medication so they may continue to pay their mortgages as well as provide food and other necessities for their families. On numerous occasions, you have referred your clients to banks to obtain loans; however, due to the loss of their jobs as a result of their injuries, they are poor credit risks and it is virtually impossible for them to obtain loans. There being no other alternative, you attempt to obtain liens against your clients’ cases to provide them credit which, in most cases, the landlords and hospitals simply reject.

     You have asked the Committee to consider the propriety of your persuading a finance company to agree to loan funds ranging from $1,000 to $10,000 to personal injury clients who cannot get bank loans. You have proposed that the company would investigate the case to confirm the liability, damages, and insurance coverage with the client’s written consent. If the investigation revealed facts or evidence pertinent to the case which the client’s attorney did not already know, said facts would be conveyed to that attorney at no expense. If the loan is approved, the loan would become due upon resolution of the case either by settlement or trial and the borrower would be charged at a lawful interest, similar to that used by major credit card companies. Upon obtaining a favorable settlement or verdict the client would direct the attorney involved to repay the loan out of the case proceeds. In no way would the attorney guarantee, cosign, or be responsible for the loan, except that he would honor a lien on the case.

     The Committee believes DR:5-103(B) is the appropriate and controlling rule relative to your inquiry, and it provides as follows:

     While representing a client in connection with contemplated or pending litigation a lawyer shall not advance or guarantee financial assistance to his client, except that the lawyer may advance or guarantee the expenses of litigation, including court costs, expenses of investigation, expenses of medical examination, and costs of obtaining and presenting evidence, provided the client remains ultimately liable for such expenses (emphasis is added). (See also LE Op. 773)

     The Committee would also direct your attention to Professional Guidance Opinion No. 86-36 from the Philadelphia Bar Association, which states that a lawyer may not act as guarantor for a bank loan for his client; however, he may attempt to convince the bank to grant the loan and to take a security interest in the client’s personal injury case.

     Under the facts as you have presented them in your inquiry, the Committee opines that there would not be a violation of Disciplinary Rule 5-103(B) as long as the attorney does not guarantee or cosign for the loan.

When you or your clients need an advance to get you the settlement or verdict you deserve, call Great Bay Capital.  We have the lowest rates in the entire pre-settlement industry, guaranteed!

(The entire Florida opinion can be read here http://www.floridabar.org/tfb/tfbetopin.nsf/SearchView/Ethics,+Opinion+00-3?opendocument )

If you are searching the internet for the lowest cost lawsuit funding cash advance, go to www.greatbaycapital.com, or call us at 866-454-7328.

We are here to help.

The classic legal definition of a loan includes an absolute obligation to re-pay the advanced funds.   Not one pre-settlement funding advance Great Bay Capital has ever made contained an absolute obligation to re-pay the advance.   Every pre-settlement funding advance is contingent upon the plaintiff recovering funds from the lawsuit sufficient to repay our advance.  If the case is lost, so is our advance.  It is a very simple business arrangement.  It’s not a loan.   The only similarity to a traditional loan is the fact that a pre-settlement advance also charges “interest.”  (Wonder what he would think if we just took a percentage of the final settlement, much like the attorney’s do?)

Despite the obvious difference, Mr. Suthers declares his olifactory legal acumen superior, stating “If it looks like a loan, and smells like a loan, it’s a loan.”   As we all know, things ”smell” different to different people.  One man’s “loan” is another man’s lifeline.   As we await the presumed appeal in this battle of “loans vs. business arrangements” I leave you with a point to ponder:

It’s comically ironic that the ”Consumer Protection Code,” which by definition is designed to protect “consumers,” ends up helping the big insurance companies.   Who gets hurt if pre-settlement lawsuit funding is declared a “loan” in Colorado and therefore unlawful if over the pre-determined satisfactory loan interest rates?   The big insurance companies will continue the practice of dragging out settlements as long as possible.  They know most of America lives paycheck to paycheck. They know that Joe Consumer can’t afford to go another month without funds to make his truck payment. (And, of course, the insurance payment on his truck as well.)    Ultimately who gets hurt is the poor consumer, who will lose that truck and his house as a result of someone else’s negligence for which the insurance company is ultimately responsible.   I don’t hear Mr. Suthers, or any other of the “consumer protectionists” screaming about the age old insurance company practice of “starving the plaintiff” over time into a settlement.   When Mr. Suthers fighs to declare pre-settlement funding a “lawsuit loan,” he should ask himself who is going to pay his family’s grocery bill when he gets hurt?