How Do Pre-Settlement Funding Companies Determine Eligibility?

Eligibility is determined by case merit — not personal finances. Funders evaluate liability strength, expected recovery, defendant insurance coverage, case type, jurisdiction, and attorney assessment.

Pre-settlement funding companies underwrite the legal case, not the plaintiff. The evaluation is entirely case-centered: how strong is the liability evidence, how much is the case likely to recover, is the defendant insured and for how much, what is the litigation timeline, and what does the plaintiff's attorney think about case prospects. None of these factors involve the plaintiff's personal financial situation.

Liability assessment is the first gate. The funder reviews the accident or incident report, medical records documenting the injury, police reports if applicable, photographs, witness statements, and any other evidence of fault. The clearer and more compelling the liability evidence, the more confident the funder is in approving and sizing an advance.

Recovery estimation is the second gate. The funder models expected settlement or verdict value based on injury severity, documented economic damages (lost wages, medical bills), applicable non-economic damages (pain and suffering, per the jurisdiction's standards), defendant insurance coverage limits, and comparable case outcomes in the jurisdiction. This modeling determines the maximum supportable advance amount.

Attorney assessment is a key input throughout. The funder speaks with your attorney to understand their view of case strength, the anticipated timeline, and the anticipated settlement range. Attorneys who are experienced in their practice area and familiar with the local courts provide the most useful inputs for underwriting decisions.

Source: ALFA Consumer Litigation Funding Code of Conduct. Underwriting criteria vary by funder and case type.

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