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

Jeffrey P. Gale, P.A. — Thu, 31 Jul 2025 19:03:31 GMT

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

Pressure to Accept Low Settlements: Because of compounding interest, clients may feel compelled to accept early, inadequate settlement offers to stop the financial bleeding.
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.
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:

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.

Jeffrey P. Gale, P.A. // Considerations Concerning Cash Advance Funding of Florida Personal Injury and Workers’ Compensation Cases

Jeffrey P. Gale, P.A. — Thu, 01 Sep 2022 19:56:38 GMT

The competition to advance money to those injured in accidents is fierce. The reason for the fierce competition is the potentially high rate of return on the investment.

Numerous companies, some large with a national presence, engage in the competition. Because their only security is the injury case itself (workers’ compensation and personal injury), which gives rise to the term “non-recourse funding advance“, the companies are not bound by Florida’s usury laws limiting interest rate charges. The rate can be multiple times over the 18% limit allowed in Florida. In fact, the interest rates are so high that the repayment amount can quickly double and triple the principal.

Advance companies are barred from foreclosing on real property or seeking repayment through wage garnishment. Their sole recourse for repayment is the case itself. If the case fails altogether or the recovery is not enough to repay the advance in full, it’s tough luck for the company. Given the precarious nature of accident cases, this is a real risk. Cases can “Go South,” so to speak, for a variety of reasons.

The advance agreement includes lien and assignment documents obligating the injured person’s lawyer to deduct what is owed from the settlement or final judgment and pay directly to the company.

Other important considerations include:

Advances pressure clients to accept bad settlement offers. Because of the high interest charged, some clients feel pressured to settle before the ideal time to limit additional interest charges.
Advances pressure clients to reject good settlement offers. Because of how much is owed on the advance, a client may bypass a fair settlement offer and take an unreasonable risk at trial.
The potential that information we provide may waive attorney-client, or work product protections. In order to assess their risk, some funding companies require lawyers to provide written evaluations of the case. Arguing waiver of the attorney-client privilege, defendants could gain access to these written evaluations.

Typically, we try to steer our clients clear of these advances. However, we understand the struggles of daily life and the need for money. Recently, we even recommended and assisted our client in obtaining an advance. He sustained a catastrophic injury in the case we are handling and needs another surgery to stabilize his condition. He did not have insurance and had run out of personal funds to cover the procedure, so he secured the money from one of the better funding companies. While the payback will be substantial, the benefit will make it worthwhile. Our client is exceedingly thankful we helped him secure the funds.

For our clients who insist on proceeding with funding, we give them some options from which to choose. This is not an all-inclusive list:

It is important for those considering funding to do their homework. Many companies (not just those listed above) offer cash advance loans. Rates and repayment terms should be considered.

Our clients frequently ask us for advances. We must respectfully refuse the request. Florida Bar Rule 4-1.8(e), reproduced below, prohibits lawyers from providing financial assistance to clients. The reasoning is sound. A lawyer who is owed money may feel compelled to compromise a case to recover his or her money — for example, prematurely entering into a settlement.

(e) Financial Assistance to Client. 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.