Funders are legally positioned to realize extraordinary returns. The returns are exceptional enough to cause many to think, at the outset, that this program is "too good to be true." We'll get to that in a bit, but first, let's first take a look at how the Litigation Funding program works and how you are able to participate.
Litigation Funding involves the medical device and pharmaceutical industry, where certain of these companies’ products have been found to have defects which have, in turn, resulted in injuries and health issues. These companies have lost suits, resulting in the companies having been ordered to set aside significant monies in trust, from which they will pay claimants as they come forward. The amount of these settlements are often hundreds of millions or even over a billion dollars. The claimants who have suffered damages usually collect sizeable settlements. To better understand the opportunity for a funder to participate in Litigation Funding, let’s look at a hypothetical, but typical situation. On television, the radio or newspapers or magazines, you’ve probably seen or heard advertisements asking anyone who has suffered damages from specific
pharmaceuticals or medical devices to come forward and contact a law firm to collect on a settlement. In our example, a fictional pharmaceutical company, XYZ Medical Inc., has manufactured a prescription drug for the treatment of depression, called Medex.
As a result, there is no trial and there are no appeals. The money has already been allocated for claimants to come and receive their settlements. We want to drive this point home. After a time it is discovered that Medex causes severe heart and lung disorders. XYZ has been sued by a law firm, lost its case and the
settlement amount, which is over-seen by the courts, is placed into a
settlement trust account. The law firm collects the settlement and pays each claimant, damaged by Medex, his or her settlement share. That’s how it works and that’s where the transaction ends, up until now that is. As you might imagine, there are considerable expenses to the law firm associated with locating claimants who have suffered damages.
Continual television, radio, newspaper and magazine "marketing" efforts are very expensive. On top of these costs, the law firm, before claimants are considered qualified to receive their settlements, often have to pay for the claimant’s medical records, examinations and even occasional reversionary surgeries.
In our example, let’s say this sum is one billion dollars. XYZ knows that thousands of claimants will be coming forth to receive their settlements. So these are in counter-distinction to class action suits, where on-going litigation and appeals can drag on for years. To re-iterate, these medical companies have already lost these individual lawsuits and have set aside the settlement funds for This all leads us to the opportunity.
A law firm engaged in this form of commercial tort litigation will pay a funder a tremendous premium for sharing in the up-front expenses associated with acquiring and vetting these claimants and packaging the cases for partner litigation firms.
1. Would you partner with the law firm by providing a specific sum of money for assisting in its up front expenses, if you were given a legal and binding contract to receiveback your initial amount of funding plus a healthy premium within a specific time frame?
2. Would you participate if the legal contract also guaranteed your return of principal at any time prior to the funding date?
Before you answer, here are the options available as a funder in the Litigation Funding program:
If you were presented with these returns for a typical investment your thinking, “it’s too good to be true” would certainly be justified. However, as you are now aware, Litigation Funding is not an investment.
These are legal agreements, with payouts to each funder specifically defined.
Incidentally, if a funder desires to put in more money than specified in the prescribed short, medium and long term agreements, he or she would simply participate in as many of these transactions as he or she wishes. For example, if a funder wants to put in a total of $50,000, he or she would, perhaps, choose 5
long term contracts or maybe 3 short term, 2 medium and 2 long term contracts.
As you might imagine, there are more details to learn about the Litigation Funding system and you are encouraged to perform your own due diligence in finding out more about this remarkable and extremely
lucrative legal contract program. At the very least, we hope that “it’s too good to be true” thinking has been diminished and that you can now actively research whether or not Litigation Funding makes sense for you.
Here are two questions for your consideration:
So, with the law firm’s legal and binding contract and commitment to its funders, the dynamic has changed dramatically from the norm.
The transaction now flows as follows: The litigating law firm collects the claimant’s settlement, pays the claimant his or her share and pays the law firm who acquired and packaged the claim for them. This firm, in turn, pays the funder the pre-specified amount according to the contract agreement. We work with one of the pre-eminent firms engaged in this type of litigation funding opportunity.
Funder Pays Specified Amount Frame Funder
Up-Front Funder Receives Receives Money
Short Term Contract: $ 5,000 $ 10,000 Within 12 mos.
Medium Term Contract: $ 7,500 $ 22,500 Within 22 mos.
Long Term Contract: $ 10,000 $ 40,000 Within 30 mos.
DFS Worldwide, LLC.
DFS Worldwide, LLC.