Glossary

The terms provided below will help you to understand the process of legal funding. Some of these terms may be used differently in another context. These definitions should only be used as they pertain to plaintiff cash funding and legal funding.

Appeal

To request that the court reverse the decision of a previous trial after the ruling or judgment has been made. The defendant may appeal a case and delay your settlement money.

Appeals Court

Any federal or state court which handles appeals, as defined above. These courts determine whether prior rulings from lower appeals courts or trial courts should be upheld.

Bankruptcy

A legal preceding that occurs when an individual or business is unable to repay debts. Bankruptcy appeals to the judicial system for protection from creditors seeking to make collection.

Bankruptcy: Chapter 13

A bankruptcy plan in which the debtor retains his or her assets and repays creditors according to a predetermined payment plan.

Bankruptcy: Chapter 7

Bankruptcy in which the debtor’s assets are liquidated to repay the entire sum of his or her debt. After this type of bankruptcy, the debtor no longer needs to repay his or her previous creditors.

Class Action

A type of lawsuit that is filed on behalf of a large group of people. Typically a smaller group will pursue the case on behalf of a much larger group of affected individuals.

Commercial Litigation

A lawsuit that occurs between several different combinations of businesses and individuals.

Contingencies

Events which may or may not actually occur.

Contingency Fee

Fees which are only owed under certain circumstances (see contingency). These fees are typically owed to an attorney only in the event that they are successful with the case.

Contract

A legal and binding document between two or more individuals that clearly lays out the terms of an agreement.

Court Order

A ruling issued by a court judge that is legally binding to all involved.

Court Trial/Bench Trial

A trial that does not involve a jury. In this case, the judge acts as the sole fact finder and makes the final decision as to the outcome of the case.

Defendant

The individual or organization that is being served with papers pertaining to an alleged grievance.

Discount Rate

An interest rate calculated to account for the present value of future cash flows.

Discounted Present Value

The net present value obtained by discounting future payments to the present value.

Funds Transfer

The movement of funds from one account to another.

Insurance Settlement

Proceeds paid by the insurance company to the insured by way of settling a claim. The terms of these settlements are clearly outlined in insurance policies.

Insured

The individual who is covered by the insurance policy.

Insurer

The company that provides insurance coverage to individuals. This is usually done through a contract of insurance.

Interested Parties

Any party who is given rights under the contract. This may include the payee and designated beneficiaries who can accept payment in the event of the payee’s death.

Judgment

The court or judge’s final decision in a case. An appeals court may also pass judgment on a case previously tried in a lower court.

Jury Trial

A lawsuit which is presented in trial before a jury. The facts of the case are examined and judgment passed by the jury, rather than the judge.

Lawsuit

Legal action that is taken by one party against another. The outcome of a lawsuit is determined by a judge or jury in a court of law.

Legal Representative

One who is legally authorized to act on behalf of another individual in the execution of a contract.

Liability

Legal responsibility for actions taken or lack thereof.

Lien

A legal claim against funds or property which can be seized as payment for a debt.

Litigation

Any legal proceeding which takes place in a court of law.

Lump Sum

A payment that is made in one single installment.

Multiplier

A fixed number that is figured into repayment calculations to determine the amount owed. Multipliers do not change unless specific conditions have been met.

Net Value

The total value of an estate minus the debts against it.

Non-Recourse

Funding that does not have to be paid in the event that the case is lost. Non-recourse funding belongs to the plaintiff free and clear if he or she does not receive a settlement.

Periodic Payments

Payments made on a set schedule. These typically occur monthly or quarterly.

Personal Injury

Any injury that occurs as the result of an accident. A personal injury can be physical, mental, or emotional.

Plaintiff

The individual initiating the lawsuit against the defendant. This is done by filing a complaint with the clerk of the court. Plaintiffs lay out a set of demands for repayment of the wrong that was done.

Principal

The initial monetary sum in an investment that occurs before interest or fees are collected on the amount.

Quote

The price that is offered for goods or services.

Settled Claim

A lawsuit that has been resolved in a court of law.

Settlement

Resolution of a lawsuit prior to the case going to court. Cases may also be settled prior to becoming a lawsuit when an agreement is made before a petition or complaint is filed.

Settlement Offer

A written offer for a settlement (see above) that will satisfy the lawsuit. Settlement offers expire if they are not accepted within a set amount of time. (see structured settlement)

Settlement Agreement

An agreed arrangement between an insurer and beneficiary regarding payment of policy proceeds. This may pertain to several payments that will be made over a set period of time.

Settlement Date

The date when settlement funds will be provided.

Structured Settlement

A plan which provides payment in several smaller sums over a period of time. (see settlement agreement)

Structured Settlement Agreement

The agreement specific to a structured settlement which lays out the terms of repayment. This specifies the amount of each payment as well as the date on which it will be provided.

Terms of the Structured Settlement

The details of the structured settlement agreement (see above) as well as an annuity contract, court approval and other required authorizations making the payment plan legal and binding to both parties.

Tort

A legal provision which allows an injured party to obtain compensation from the injuring party. A tort seeks to punish the injuring party and force him or her to suffer for his or her acts. A tort may apply to many different situations including negligent acts, accidental occurrences, and intentional injuries inflicted upon another person.

Trust

A monetary fund that holds assets for a beneficiary under the care and supervision of a trustee. Trusts are often used to keep funds safe for the beneficiary until he or she comes of age.

Trustee

The individual responsible for the care and management of a trust fund (see above). The trustee is charged with managing the trust until such time as the beneficiary can claim the funds.

Underwriter

An investment banker responsible for underwriting new securities.

Underwriting

The act of accepting liability and risk under a set of terms.

Verdict

The outcome of a case as determined by the jury. This ruling must be accepted as final.

Workers Compensation

Funds provided to a worker who is injured on the job. Workers compensation must cover associated medical bills and lost wages related to the injury.

Wrongful Death

A death directly caused by intentional or negligent actions of another.