When facing a personal injury lawsuit or other civil case, many plaintiffs turn to pre-settlement funding as a way to stay financially stable during a difficult time. While this financial tool offers critical support, some people wonder: can pre-settlement funding impact the outcome of your case? The short answer is no—when done correctly, pre-settlement funding should not interfere with your legal proceedings. However, understanding how it works and what to watch for is key to making informed decisions.

What Is Pre-Settlement Funding?

Pre-settlement funding (also called lawsuit funding or legal funding) is a non-recourse cash advance provided to plaintiffs based on the expected outcome of their case. It is not a loan in the traditional sense, as repayment is only required if you win or settle your case. If you lose, you owe nothing.

How Pre-Settlement Funding Works With Your Case

When you apply for pre-settlement funding, the funding company evaluates the merits of your case in collaboration with your attorney. If approved, you receive a cash advance to use for medical bills, rent, groceries, or other expenses while your case is ongoing.

The funding agreement is between you and the funding company, but your attorney plays a key role in facilitating the process and ensuring your rights are protected.

Does Pre-Settlement Funding Influence Case Strategy or Legal Decisions?

No. Reputable funding companies do not interfere with your legal strategy, case decisions, or attorney-client relationship. Their role is purely financial. Your attorney continues to control the legal aspects of your case without influence from the funding provider.

Important Distinctions:

• Non-Recourse Structure: You only repay if you win, so there's no financial pressure to alter your legal path.

• Attorney Collaboration: Most companies require attorney cooperation, but only for documentation—not legal decision-making.

Potential Indirect Effects to Be Aware Of

While pre-settlement funding doesn’t directly impact your case, there are a few indirect considerations:

1. Settlement Negotiations

Some defense attorneys may request to know if you received funding, especially if they suspect financial urgency could impact your willingness to settle.

Good to Know:

• In most jurisdictions, whether or not you received funding is not admissible in court.

• It’s rare for this information to significantly affect negotiations.

2. Repayment Amounts and Settlement Size

If your case settles for less than expected, a portion of your settlement will go toward repaying the funding advance (plus fees and interest). This may reduce the amount you ultimately receive.

How to Protect Yourself:

• Work with funding companies that offer capped fees and simple interest to avoid excessive repayment.

• Have your attorney review the agreement to ensure it’s fair and in your best interest.

3. Multiple Advances

Taking out multiple advances can increase your repayment amount. If you continue borrowing, be sure to calculate the total cost and weigh it against the likely settlement.

Tip: Use pre-settlement funding as a last resort or supplemental support, not a long-term financial solution.

Best Practices to Avoid Issues

• Choose a Reputable Provider: Look for companies that are transparent, experienced, and well-reviewed.

• Consult Your Attorney: Always have your legal team review the agreement before signing.

• Understand the Terms: Know how interest is calculated, when repayment is due, and what happens if your case loses.

Final Thoughts

Pre-settlement funding can be a lifeline during litigation, offering essential support without interfering in your legal proceedings. While it doesn’t directly affect your case, understanding how it works and choosing a trustworthy provider will ensure it helps rather than hinders your journey to justice.