Medical Malpractice Lawsuit Funding – Adjusting Expectations

Lawsuit loans are commonly offered for medical malpractice cases by legal finance companies. However, the underwriting of these cases is often much more complicated than the standard negligence case. This post will attempt to identify a few things to remember when trying to secure a lawsuit loan in a medical malpractice case.

Negligence Basics

The American legal system imposes a duty of care on physicians when interacting with their patients. Medical malpractice actions are based on a breach of this duty. The noncompliance must be of the standard of care for similar practitioners in that specialty and in the geographic area in which the treatment occurred.

To support a cause of action for malpractice against a medical professional, the negligence must be causally related to the alleged damages. In other words, the malpractice must have caused an injury or other damages to the plaintiff. Plaintiffs routinely relieve different types of damages. Very often, plaintiffs alleviate physical damage to their bodies. In other cases, lost wages or other economic damages are sought. In others, emotional or mental damages are available to plaintiffs.

Malpractice cases are often complicated.

Most states recognize negligence cases for the following:

* Misdiagnosis and failure to diagnose a treatable medical condition.

* Delay in Diagnosis of a Treatable Medical Condition.

* Incorrect reading or incorrect evaluation of the study.

* Pregnancy, labor and neglect in childbirth.

* Medication errors.

* and others…

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 damage would be irreparable and not difficult to quantify. Such a case would probably be solved in no time.

But the vast majority of medical malpractice claims are not that simple.

When health professionals (including doctors, nurses, and other professionals) treat their patients, most go out of their way to help. When something goes wrong, victims sometimes blame the health care worker for unexpected complications. However, the fact that a patient’s condition worsens does not necessarily mean that the medical provider has deviated from usual practice. After all, the patient is usually sick before seeking medical attention.

Once a breach of the standard of care is proven, the plaintiffs and their attorneys must prove that the malpractice caused the plaintiffs’ damages. In other words, it is not enough to show that the patient eventually suffered. The negligence must cause the suffering. In many lawsuits, this is not so easy to prove.

For example, a doctor may misdiagnose a patient with stage 4 pancreatic cancer. And attorneys, through their skill and experience, can prove that the doctor’s diagnosis deviated from the acceptable standard of care. However, due to the terminal nature of this type of illness, the damage would be very difficult to prove. The patient will most likely face a terminal diagnosis regardless of her timing. In this case, defense attorneys would certainly minimize any damage.

Medical Malpractice and Financing Lawsuits

When financing a negligence case, lawsuit loan companies attempt to analyze the probability of success based on much more complex factual and economic scenarios than a typical case loan involving negligence.

For example, negligence cases typically involve multiple parties. A claim involving surgery would require examination of each individual in the operating room during the procedure. This typically includes serving and responding to interrogatories, affidavits, and other discovery requests. These steps are taken AFTER the following:

Drafting and filing of the Complaint, notification of the Complaint, response to the Complaint by defense counsel, motions to dismiss, appointment 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 hard to see why these cases take years to litigate.

Litigation delays are compounded by the fact that many lawsuits involve very serious medical conditions that prevent plaintiffs from earning wages. This combination often results in greater economic hardship for plaintiffs. Creditors generally don’t care if plaintiffs can work, they only care that they get paid. That is your business.

Demand loans are a way to mitigate these economic difficulties. Essentially, the plaintiff allocates a portion of the proceeds from the case to the lawsuit financing company. If the case is resolved, the “loan” is repaid according to the terms outlined in the financing agreement. The use of the claim loan is entirely at the discretion of the claimant. The money can be used for anything. Which is great news for claimants who find themselves behind on their expenses.

The bad news is that medical malpractice cases are very difficult to finance. The reason is because they are very difficult to win. Keep in mind that all of the discovery mentioned above costs money in the form of time, expert fees, court fees, stenographers, support staff, etc. A medical malpractice lawsuit is a commitment of time, money, and energy.

Also, in many jurisdictions, plaintiffs only win 1 out of every 3 lawsuits filed. Plaintiffs attorneys make money because the cases they win are so big. But for the purposes of demand loans, where any loss is a total loss, 33.33% is not the ideal scenario.

Despite these obvious pitfalls, claims finance companies offer pre-settlement loans in negligence cases every day. They are not the easiest cases to pass, but the plaintiff’s need still exists. The legal financing business is there to help plaintiffs reduce their financial burdens while they await a favorable recovery in their case.

Thank you for your interest in the lawsuit cash advance industry.

pmc