Commercial litigation funding is an attractive proposal for many people who are interested in lodging a litigation case but don't have the funds to do it on their own. In such cases, getting this kind of funding is very attractive since there is very little risk involved. Basically, the only time you will need to pay back the money is when the litigation is successful. If not, the company that lent you the money may not ask you for any money back, and even if they do it will be very little. This means that either way, you don't have anything to lose by using such funding.
The fact that it's easy to get such funding and that it's free of risk might make it easy for people to be nonchalant when approaching them. For instance, if you are thinking of applying for one, you may not give much thought to the details of loan, since you know that either way you don't have much to lose. However, this is not the correct approach to applying for such loans. It's always a good idea to think things through when you are applying for the loan so that you don't end up getting a raw deal. There are a number of things you need to look out for when doing this, most of which can be done by going through the terms of the loan.
The most important of these is how much money they will be liable to take from you once the case goes through. The way these kinds of loans work is that once you win the case, the company will then take a portion of the money that you get from the litigation. This could be a fixed sum, but most of the time it's a percentage of what you end up getting. If you are not careful, you may end up paying up more than you should. This means that you need to be very keen on the percentage that the company proposes getting from you.
There are several ways of assessing whether you are being fleeced or not. For one, you could decide to compare the services from different companies. You can call the different companies that offer such funding, and then ask them for ballpark figures on how much they would charge for such a service in case you won the litigation. You can then compare the rates to get a definite idea of whether the company you are thinking of working with is charging you too much or not.
You can also try to negotiate with the company over this. Some of the companies that offer this kind of funding are amenable to negotiation, whereby you can tweak some of the features of the agreement so that you end up paying less. You can use this to help keep the cost of the funding low.
In summary, you should never opt to use just any form of third party funding just because it's a low risk venture. It's always a good idea to do some research to identify the service that will give you the most benefits.