The concept of Lawsuit Settlement Funding proves extremely beneficial to people who do not have the requisite funds to fight their personal injury lawsuit cases. Consider a situation when you find at the receiving end of racial discrimination at the workplace, or have been unceremoniously thrown out of a job, and you don't have the finances to go to court to fight for your rights. It is here that pre-lawsuit funding companies enter into the picture. They provide the required funds to the injured person, who then has to pay a certain percentage to the funding company on winning the case. It is important to point out that this funding is non-recourse funding. This means that you don't have to pay anything if you lose the case.

Given the amount of risk involved, the fees are significant. The process works in the following manner. The injured person contacts a Lawsuit Settlement Funding company to discuss the details of the case. The company then contacts the injured person's lawyer and finds out more details of the case, and the amount that can be expected from a successful suit. Based on this information and estimate, the financing company then offers an advance amount to the injured person. The injured person then has to the choice to pay either a flat fee, or monthly installment of the fees till the loan is outstanding. When the case is settled in court and the defendant pays up the money, the injured person can pay the associated fees and also the loan, which the financing company had advanced.

These loans are the non-recourse type, meaning that the injured person does not have to pay anything if the case is lost. Also, in case of winning, if the settlement amount is less than the amount anticipated, the amount to be paid by would never exceed the amount that the injured person got as settlement.