Anyone who drives is susceptible to injury, or even death. This risk is higher for truck drivers because of the long hours they work, the heavy loads they carry, and the long distances they travel. Those are only a few of the dangers they face while on the road. Because of these risks, when a truck driver has an accident, the outcome could be fatal both for the driver and the other party involved. In the aftermath of the accident, both the truck driver and the other party are scrutinized, and the debate over who is to blame begins.
Eventually, attorneys become involved and lawsuits are filed. Any plaintiff’s attorney who takes an interest in the case must first understand the cost and time that would be required to litigate the case. Plaintiff’s attorneys work on a contingency fee basis, and operating under that banner means not getting paid until the case is concluded. It also means spending lots of money to build a case before receiving a dime in compensation, which can be incredibly expensive, and potentially cause cash flow issues. Expenses like travel, depositions, expert witnesses, and processing documents can add up quickly and cause financial damage to the law firm.
Cash flow can sometimes be inconsistent for plaintiff’s attorneys, and they may find themselves in need of capital in order to continue running their practice while simultaneously litigating a complex trucking case. Legal finance helps alleviate the cash flow disruption that some plaintiff’s attorneys may experience because it provides capital that the attorney can allocate in whatever way he or she deems necessary. This capital could mean that the attorney can advertise to take on a new case, or provide much needed funds for any ongoing suit.
Any type of litigation pursued by a plaintiff’s attorney can quickly become expensive. This is especially true of trucking litigation because of the many parties and separate factors involved, including insurance companies, attorneys, business finances, the severity of the damage, and personal liability. That is why settlements and judgments from trucking litigation tend be six figures and higher. An attorney who does trucking litigation knows they are going to be spending a lot of money, but with legal finance, they don’t have to “break the bank” to get a win.
The legal finance industry is global in terms of the benefits attorneys all over the world receive when they access capital needed to pursue litigation, continue litigation, or access cash flow to bridge any gaps they may experience while waiting for payment if the case is settled or a judgment has been rendered. The goal of the industry is to give the plaintiff and their advocate a fair chance in litigation because of the type of defendants (huge companies) they are facing. These companies are known to lowball the plaintiff or make the litigation process even harder on them in order to pay less in compensation. Their strategies can include pursuing litigation to bankrupt the plaintiff and their attorney.
The legal finance industry has given plaintiffs and their attorneys a way to fight back against these tactics so they can achieve justice. In the United States, the industry has been growing since the 1990s, and it has become a more mainstream option for all kinds of plaintiff’s attorneys. However, because they get paid on a contingency fee basis, contingency fee attorneys have to wait until settlement funds are disbursed to get paid.
There are many types of legal finance available to plaintiff’s attorneys depending on the stage of litigation. Pre-settlement funding is an advance given prior to a case settling, based on the perceived value of the lawsuit. Case cost finance is capital that can be received during the case, essentially a line of credit to help cover case related expenses. Post-settlement finance is capital received after a settlement is reached but is facing a delay in payment. There is also appeal finance, which is capital that is received while a case is on appeal. Judgment/verdict finance is capital received when a judgment has been handed down. That capital is exchanged for a portion of the anticipated attorney fee.
These different options within the realm of legal funding are designed to help overcome any cash flow disruptions plaintiff’s attorneys may experience. Plaintiff’s attorneys who litigate trucking cases frequently face huge bills from the experts they will need to testify for their cases. The attorney’s expenses may total in the hundreds of thousands to possibly millions of dollars.
The Federal Motor Carrier Safety Administration (FMCSA) and the National Highway Traffic Safety Administration (NHTSA) conducted the Large Truck Crash Causation Study (LTCCS) to examine the reasons for serious crashes involving trucks. {United States Department of Transportation, Federal Motor Carrier Safety Administration, the Large Truck Crash Causation Study, July 2007} In their report, they claimed there were multiple factors as to why the accidents occurred, including driver training and experience, vehicle design and manufacture, highway condition, traffic signaling, and weather conditions.
According to the NHTSA, during a 33 month period, there were approximately 120,000 crashes nationwide resulting in fatalities or injuries that involved at least one large truck. While that may seem like a large number, those statistics will not deter other drivers from getting on the road to do the job of a truck driver so they can see their families fed. In the unfortunate event of an accident, according to some plaintiff’s trucking attorneys, the attorney will have to move quickly to build their case.
The first step in building such a case involves assembling a crash team. The team may include videographers, accident reconstructionists, and medical professionals whose services are not cheap. For gathering information, the attorney may have to pay for storage of the vehicles involved in the accident, interview law enforcement officials, gather legal documents, travel logs, telephone records, accident reports, disciplinary records, delivery and pickup records, and medical evaluations. Those are only a few of the necessary records. The attorney must also inspect the scene which will mean travel costs. Of course, these costs are incurred before the trial starts, meaning the attorney would be fronting a substantial amount of money. In addition, trucking defense attorneys are known to be tough and will fight vigorously to prevent their client from paying a settlement or suffering a defeat in court.
A new attorney who has decided to pursue trucking litigation, but, despite their skill and ability to win cases has limited capital, may not be able to take on a trucking case. The sheer breadth of expenses they will accrue can overwhelm them. Even an experienced plaintiff’s trucking attorney may falter in the face of costs pursuing trucking litigation. Legal finance helps them with this problem. A plaintiff’s attorney who uses legal finance and litigates trucking cases would be able to stand a better chance in litigation. The attorney who can access capital in a short amount of time can overcome the issues that haunt many contingency fee based attorneys. Defense attorneys for the big trucking companies know this and use it to their advantage. The defendants in these cases know the upside legal finance provides to the plaintiff’s attorneys and their clients. That is why they seek to “regulate” the industry. The goal of these companies and others in various industries is to put a stranglehold on the legal finance industry because they claim it leads to “frivolous lawsuits”. The huge trucking companies who use that argument should talk to the person who lost their parent to a reckless truck driver, or the person who can’t walk anymore because they were hit by a truck while coming home from work, and is now struggling to support their families and themselves.
Even if the plaintiff has a strong case and is completely right, the defense attorneys may push an unfair settlement that gives the plaintiff nothing and bars them from pursuing any future litigation. The people in those predicaments are the ones that need justice, and sometimes the only way to get justice is through the courtroom. However, justice cannot be had if the advocate for the plaintiff is financially handicapped from the very beginning. Legal finance helps balance the playing field and in expensive cases like trucking litigation, it provides an advantage for the plaintiff’s attorney that shouldn’t be wasted.
Written by Joseph Genovesi, President of RD Legal Funding
Published in APITLA’s The Lawyers LogBook® (Vol. 4, No. 1 April-May 2014)
