Funding Business
Lawsuit Funding for Medical Malpractice Cases
Lawsuit loans are routinely offered for medical malpractice cases by legal funding companies. The underwriting of these cases however, is often much more complicated than the standard negligence case. This post will attempt to identify some things to remember when attempting to secure a lawsuit loan on a medical malpractice case.
Malpractice Basics
The American legal system places a duty of care upon doctors as they interact with their patients. Medical Malpractice actions are based upon a breach of this duty. The breach must be of the standard of care for similar professionals in that specialty and in the geographic area in which the treatment occurred.
In order to sustain a cause of action for malpractice against a medical professional, the negligence must be causally related to the damages alleged. In other words, the malpractice must have cause an injury or other damages to the plaintiff. Plaintiffs routinely allege different types of damages. Most often, plaintiffs allege physical damage to their bodies. In other instances, lost wages or other economic damages are sought. In still others, emotional or mental damages are available to plaintiffs.
Malpractice Cases are Often Complicated.
People can easily imagine a medical malpractice case where the doctor amputates the wrong leg. Clearly, the doctor should have known which leg to amputate and the resulting damages would be irreparable and not hard to quantify. Such a case would most likely be settled in short order.
But the vast majority of medical malpractice lawsuits are not so cut and dry.
When health care professionals (including doctors, nurses, and other practitioners) treat their patients, most are doing their very best to help. When something goes wrong, victims sometimes blame the health care worker for unexpected complications. However, just because a patient’s condition worsens does not necessarily mean the medical provider deviated from standard practice. After all, the patient is usually ill before he seeks medical attention.
Once a breach of the standard of care is proven, plaintiffs and their attorneys must then prove malpractice caused the plaintiffs damages. In other words, it is not enough to show the patient eventually suffered. The negligence must cause the suffering. In many lawsuits, this is not so easy to show.
For example, a physician may misdiagnose a patient’s Stage 4 pancreatic cancer. And the attorneys, through their skill and expertise can prove that the doctor’s diagnosis deviated from the acceptable standard of care. However, due to the terminal nature of this type of condition, damages would be very difficult to prove. The patient would most likely be facing a terminal diagnosis regardless of its timeliness. In this instance, any damages would certainly be minimized by defense attorneys.
Medical Malpractice and Lawsuit Funding
When funding a malpractice case, lawsuit loan companies attempt to analyze the probability of success based upon much more complex factual and economic scenarios than a typical case loan involving negligence.
For example, malpractice cases usually involve multiple parties. A lawsuit involving a surgery would require the examination of every individual in the Operation Room during the procedure. This normally includes the serving and answering of interrogatories, depositions, and other discovery requests. These steps are taken AFTER the following:
Drafting and filing of the Complaint, service of the Complaint, answering of the Complaint by defense counsel, motions to dismiss, designation of trial counsel, scheduling, logistical issues, document compilation, document production, etc. This must be done for each and every defendant. For these reasons it is not difficult to see why these cases take years to litigate.
Litigation delays are compounded by the fact that many lawsuits involve very serious medical conditions which prevent plaintiffs from earning a wage. This combination frequently results in increased economic difficulty for plaintiffs. Creditors do not usually care whether plaintiffs can work, they only care about getting paid. That is their business.
Lawsuit loans are one way to mitigate against these economic hardships. Essentially, the plaintiff assigns a portion of the proceeds of the case to the lawsuit funding company. If the case settles, the “loan” is paid back according to the terms outlined in the funding agreement. The use of the lawsuit loan is totally at the discretion of the plaintiff. The money can be used for anything at all. Which is great news for plaintiffs who find themselves behind on their expenses.
The bad news is that medical malpractice cases are very difficult to fund. The reason is because they are so difficult to win. Keep in mind, all of the discovery mentioned above costs money in the form of time, expert fees, court fees, stenographers, support staff, etc. A lawsuit based on medical negligence is a commitment of time, money and energy.
Further, in many jurisdictions, plaintiffs only win 1 out of 3 lawsuits filed. Plaintiff attorneys make money because the cases which are won, are very large. But for purposes of lawsuit loans, where any loss is a total loss, 33.33% is just not the ideal scenario.
Despite these obvious pitfalls, lawsuit funding companies offer pre-settlement loans on malpractice cases every single day. They are not the easiest cases to get approved, but the plaintiff’s need still exists. The legal funding business is there to help plaintiffs lessen their financial burdens while they wait for a favorable recovery on their case.
Thank you for your interest in the lawsuit cash advance industry.
pmc
About the Author
Paul M. Coppola, Esq.
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