The physical and emotional injuries suffered in a personal injury accident can be taxing and expensive. Not only do you likely face excessive medical bills, but you may be unable to work because of your resulting disability. This can bring financial hardship that can be extremely challenging to overcome.
Thankfully, Pennsylvania law allows you to access legal funding to pay your bills while waiting for compensation from those liable for your injuries. Yet if you plan to apply for legal funding during your pending lawsuit, the same laws that govern your case also impact the amount of financing you will receive.
What Is Legal Funding?
Legal funding, also known as a lawsuit loan, litigation financing, and pre-settlement funding, is not technically a loan. Instead, it is an advance of 10-20% of the settlement you expect to receive as the victim in a personal injury lawsuit.
You can apply for legal funding from a third-party funding company like High Rise Financial if:
- Your personal injury lawsuit has a high likelihood of success.
- You have an attorney who is representing you on contingency, which means they only collect a fee if you win compensation.
- Your attorney is willing to sign a legal funding contract and agrees to pay back the funds out of the settlement you receive.
The funds are yours to use in any way you wish, and you only need to pay them back if you win your case.
To apply for free, call (877) 735-0016
Champerty Laws and Legal Funding
In the U.S., laws regarding legal funding are enforced by each state rather than by the federal government. This means that the legality of these agreements varies from place to place, and it is often tied to the state’s champerty laws.
Champerty is a legal doctrine that goes back centuries to medieval England. It prohibits third parties without a stake in a lawsuit from funding the suit for a share of the proceeds. Champerty laws were meant to discourage frivolous lawsuits, and while they are now considered outdated in many states, Pennsylvania still recognizes their legal validity.
Pennsylvania courts have used champerty as a reason to invalidate legal funding in specific cases like the often-cited 2016 ruling in WFIC, LLC v. LaBarre (PA Super. 209). However, this was a complex case, and the ruling does not automatically apply to other legal funding contracts.
Therefore, pre-settlement funding contracts are generally legal and enforceable in Pennsylvania despite champerty laws. This means personal injury victims still have the option to seek a cash advance against their future settlements.
How Other Pennsylvania Laws Affect Legal Funding Cases
In addition to champerty, other Pennsylvania laws affect your eligibility to file a lawsuit, the strength of your case, and how much your suit is worth.
Pre-settlement funding hinges on the expected outcome of your case, so these laws will also impact your funding application approval and the amount of money you can access.
Modified Comparative Negligence Law
According to Pennsylvania Statute §7102, Title 42, plaintiffs more than 50% at fault for their injuries cannot recover damages.
A fault of 50% or less reduces the settlement amount by a proportion equal to the degree of responsibility. So, for example, a $10,000 award will drop to $8,000 if the plaintiff is 20% to blame.
Minimum Insurance Policy Limits
For car accident injuries, your settlement could be limited by the defendant’s automobile insurance coverage. In Pennsylvania, drivers must carry insurance for damage they cause to others.
This includes a minimum legal coverage of $15,000 per person and $30,000 per accident for bodily injury, and $5,000 per accident for property damage.
Workers’ Compensation Eligibility
If you were injured on the job and are waiting for a claim filed through your employer’s workers compensation insurance, you cannot access pre-settlement funding.
In Pennsylvania, workers comp payouts are made directly to the injured party, so the attorney in the case would not be able to participate in a legal funding arrangement.
The Statute of Limitations on Personal Injury Cases in Pennsylvania
Pennsylvania law only allows personal injury victims two years to file their lawsuit against the at-fault party.
If you wait too long to bring your claim to court, you will not be eligible for any compensation or pre-settlement funding.
Apply for Legal Funding from High Rise Financial Today
Litigation financing is legal in the state of Pennsylvania; however, you will only be able to access this money if you file your underlying claim before the statute of limitations expires.
And although comparative negligence laws and low insurance limits may diminish your advance, pre-settlement funding can provide a vital monetary lifeline as your suit winds its way through the courts.
Apply for legal funding with High Rise Financial by filling out our quick online application or calling our offices today!