Legal Financing for Disbursements in Contingent Litigation
Mary Wisniewski writes in the Chicago Sun Times on November 30, 2005, that legal finance industry players such as Oasis Legal Finance and LawCash have now organized a trade group called the American Legal Finance Association in order to fend off accusations of predatory lending. She notes that in a typical patent trial, if the litigant wins, Oasis gets a return on its loan to the patent holder of 20 to 50 percent, plus sometimes a percent of the final judgment. But the loan is non- recourse, meaning that if the case is lost, then the plaintiff doesn't have to pay back the money which is typically earmarked for law firm disbursements which are not covered by contingency fee arrangements. However, the potential damages must be substantial -- generally more than $500,000 -- and the defendant must be big enough or have good enough insurance to pay out.
ALFA was established as a New York State Not for Profit Corporation in July 2004. Members include: BridgeFunds Limited, Cambridge Management Group Magnolia Funding LLC, New Amsterdam Capital Partners LLC, Oasis Legal Finance Co. LLC, Plaintiff Funding Corporation (LawCash), Plaintiff Support Services Inc., Pre-Settlement Finance LLC, QuickCash Inc. and Whitehaven Group LLC.