Who Is Evaluating My Lawsuit Cash Advance Funding?
The answer to the aforementioned lawsuit funding question comes up a great deal in day to day business in the litigation financing industry. More adopts underwriting a lawsuit loan or cash advance than most people realize. Analyzing case specific fact patterns, applicable laws, insurance issues, complex damages, and a host of other legal dynamics is the work of the lawsuit funding underwriter. Most professionals in this arena are usually based on a few occupations. Below we discuss some of the very common.
Attorneys/Legal Professionals
Undoubtedly the most frequent underwriters have a background in the legal profession. These individuals are usually in the very best position to analyze the potential pitfalls in a case and thus the likelihood of success. Attorneys, and sometimes even paralegals bring their familiarity with the legal process to the pre-settlement loan underwriting process. This familiarity helps with client relations and also assists in having intelligent dialogue with those legal professionals handling the cases.
Insurance Adjusters
Individuals who've worked as property and casualty insurance adjusters also possess valuable experience applicable to the lawsuit funding underwriting process. Not only can Albert and Michelle Carlotti lawsuit professionals assess the merits of the case, but they are also intimately aware of case valuations.
A case's expected value is usually subjective. Many factors however, routinely get into the calculation. Pain and suffering, lack of earning capacity, lost wages and lack of consortium are simply a few examples of compensable damages. When considering these issues, former insurance adjusters use the expertise they obtained through their working in the claims management field.
Factors such as the insurance carrier, personal relationships with adjusters, jurisdiction, venue and a host of others, often lead to a precise assessment of a lawsuit settlement value. This "best guess" is extremely valuable to those lawsuit funding companies who advance cash now for pre-settlement loans.
Risk Management Specialists
Risk management is a large section of lawsuit funding. But not involved with the analysis of any particular case, lawsuit loan companies who employ risk managers do this to higher diversify the investment portfolio.
Through example, an analysis of the prevailing portfolio might cause the risk manager to conclude that the lawsuit funding company is holding too large a number of Vaux lawsuit advances with regards to the entire portfolio. The manager might then recommend a slowdown in the acceptance of the cases for funding or possibly a temporary turn off until the ratio returns to a suitable range.
Further, risk managers be sure that the exposure to anyone case wouldn't be catastrophic to an entire portfolio. Like, if there is a $40 million portfolio, the risk manager may declare that a maximum of $400,000 be advanced on anyone case. Because any lawsuit funding loss is a total loss, losing a $4 million dollar funding for example, would be a 10% lack of total capital and would undoubtedly be catastrophic to the fund.
It is very important to realize that all lawsuit cash advance funding or pre-settlement loan underwriting contain the aforementioned functions is some shape or form. Perhaps the funder includes a $4 million dollar portfolio or $400 million, the aforementioned disciplines are a required prerequisite for a profitable lawsuit funding enterprise.
Above we outlined a few of the very common professional backgrounds often employed by litigation loan companies. Of course, you will find exceptions as the main quality in virtually any employee is integrity, aside from previous experience.
