Jeffrey P. Gale, P.A. // The Risks and Realities of Cash Advance Funding in Florida Injury Cases

The competition to advance money to individuals injured in accidents is intense, driven by the prospect of a high return on investment. Numerous companies, including large national players, engage in this market, offering what is known as “non-recourse funding advances.” Because the only collateral is the injury claim itself—whether a workers’ compensation or personal injury case—these companies are not bound by Florida’s usury laws, which cap interest rates at 18%. As a result, repayment amounts can quickly double or triple the original principal.

Advance companies have no recourse beyond the case. They cannot foreclose on property or garnish wages. If the case fails or the recovery is insufficient, the company bears the loss. Given the inherent uncertainties of litigation, this risk is very real. Cases can “go south” for a variety of reasons.

To secure repayment, funding companies require injured individuals to sign lien and assignment agreements, obligating their attorneys to satisfy the lien directly from any settlement or judgment proceeds.

Important Considerations

1. Pressure to Accept Low Settlements: Because of compounding interest, clients may feel compelled to accept early, inadequate settlement offers to stop the financial bleeding.
2. Pressure to Reject Fair Settlements: Conversely, some clients may reject reasonable offers in hopes of securing a recovery large enough to pay off the advance, thereby taking unreasonable risks at trial.
3. Risk of Privilege Waivers: In assessing risk, some funding companies request detailed written evaluations from attorneys. If shared, these communications could be used by opposing parties to argue waiver of attorney-client or work-product protections.

As a general practice, we advise clients to avoid these advances. However, we also recognize that financial necessity can override ideal strategy. Recently, we assisted a client with obtaining an advance to pay for a crucial surgery. He had suffered catastrophic injuries, lacked health insurance, and had exhausted his personal funds. While the repayment will be significant, the advance has given him access to medical care he would not otherwise have received. He was deeply grateful for our assistance.

Suggested Funding Companies

For clients who insist on proceeding, we provide names of several reputable funding companies as options, including:

• Client Legal Funding
• Capstone Financial Services, LLC
• Cash Now Funding Group
• Multi-Funding USA
• Peachtree Financial Solutions

This is not an exhaustive list. Clients are strongly encouraged to research companies carefully, paying close attention to interest rates and repayment terms.

Why We Can’t Provide Advances

Clients often ask us directly for financial assistance. We must respectfully decline. Florida Bar Rule 4-1.8(e), set forth below, expressly prohibits lawyers from providing financial aid to clients in connection with pending or contemplated litigation, except in very limited circumstances. The purpose of this rule is sound: a lawyer with a financial stake in a client’s personal situation may feel pressured to compromise the case to secure repayment—for example, by pushing for an early settlement.

Rule 4-1.8(e) – Financial Assistance to Clients
A lawyer is prohibited from providing financial
assistance to a client in connection with pending or contemplated litigation, except that:
(1) a lawyer may advance court costs and expenses of litigation, the repayment of which may be contingent on the outcome of the matter; and
(2) a lawyer representing an indigent client may pay court costs and expenses of litigation on behalf of the client.

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Contact us at 305-758-4900 or by email to learn your legal rights.

Jeffrey P. Gale, P.A. is a South Florida based law firm committed to the judicial system and to representing and obtaining justice for individuals – the poor, the injured, the forgotten, the voiceless, the defenseless and the damned, and to protecting the rights of such people from corporate and government oppression. We do not represent government, corporations or large business interests.

While prompt resolution of your legal matter is our goal, our approach is fundamentally different. Our clients are “people” and not “cases” or “files.” We take the time to build a relationship with our clients, realizing that only through meaningful interaction can we best serve their needs. In this manner, we have been able to best help those requiring legal representation.

DISCLAIMER: This information provided by Jeffrey P. Gale, P.A. is for informational purposes only and is intended to be used as a non-legal guide prior to consultation with an attorney familiar with your specific legal situation. It should not be considered legal advice or counseling. No such legal advice or counseling is either expressly or impliedly intended. This information is not a substitute for the advice or counsel of an attorney. If you require legal advice, you should seek the services of an attorney.