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Settlement loans relieve pressure on personal injury victims

Litigation funding can help personal injury victims through one of the most difficult periods of their lives, says Mickey Mingov, the founder and managing director of CaseMark Financial.

The financial services company aims to fill the financial gaps that can quickly develop in the finances of individuals when they enter the litigation process after suffering an injury.

Depending on the severity of an injury, claimants may be unable to work, cutting off their income source until a settlement comes through. Meanwhile, insurance denials and treatment costs can make the situation worse, Mingov says.

“There can be a huge disconnect in terms of getting cash flow by way of benefits,” he says. “We offer loans that can relieve the pressure and help people get through. The most common requests are for mortgage payments or rent to stave off eviction, and funds for other daily living expenses.  

“Our focus is on customer service, to make the process as easy as possible for claimants so that they can focus on their rehabilitation,” Mingov adds.  

Settlement loans are secured against the future proceeds of a plaintiff’s claim, so there are no collateral or credit checks involved. Once they have all the information from the plaintiff’s lawyer, CaseMark’s team of underwriters can make a decision to approve a loan within 24 hours based on the merits of the case, and have the money transferred on the same day the loan documents are signed.   

The company also offers treatment financing, aimed at injury victims who have reached their medical and rehab limits with their insurers, or had particular claims rejected. In addition, CaseMark can provide term sheets to claimants’ lawyers, for use in cases where there has been a denial, to forewarn insurance companies of their potential exposure for interest on these types of loans.  

As well as personal injury lawsuits, CaseMark offers litigation funding solutions in such areas as employment law, real estate, insolvency, commercial matters and international arbitration proceedings.

“We can help in any case where cash flow is an issue for the plaintiff, law firm or service provider,” Mingov says.

Although CaseMark was founded in 2013 with a focus on individual plaintiffs, more recently the company has developed loan products for law firms. Mingov says its disbursement financing options can allow firms to expand their caseload capacity and invest in quality expert reports.

“Carrying disbursements until trial is something not every lawyer can handle from a financial point of view,” he says, noting that many traditional lenders are unwilling to finance large volumes because they don’t view future settlements as regular assets.   

Financing costs can also be subject to a tax deduction and, in some cases, may even be recoverable from defendants, he adds.

According to Mingov, some of the early movers in the settlement loan business gained a negative reputation that has proven hard to shake.

“It was seen as a bit of a Wild West without much competition or oversight,” he says.

But at CaseMark, they’re doing their best to improve the image of the industry. For example, to alleviate concerns about compounding interest rates when litigation drags on, the rates on its loans drop after the first 24 months.

The firm has also implemented a straightforward, flat administration fee of $250 that is among the lowest in the business, without any annual charges or hidden fees on top.   

Mingov says part of the problem in the past was that lenders who specialized in other products stepped into the settlement loan business to answer the growing demand from clients, without first acquiring a knowledge of the legal system and the way claims flow through it.

Although not a practising lawyer, Mingov has a law degree to go alongside his financial qualifications and a team of case managers who specialize in the assessment of personal injury claims and play an active role in the legal community.

“We’re not dabblers — this is CaseMark's main business, and not some small part of our overall lending,” Mingov says. “We understand the industry and all its nuances.”

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