Frequently Asked Questions about Lawsuit Loans

LawMax - The Premier Provider of Lawsuit Finance

1. What are lawsuit loans?
2. Why do I need a lawsuit loan?
3. How confidential is the information I provide to LawMax?
4. What does “contingent” advance mean?
5. How are lawsuit loans different than conventional loans?
6. How much money can I receive?
7. How much can I expect to pay for an advance from LawMax?
8. Are lawsuit loans (or contingent advances) more expensive than bank loans?
9. Should I get an advance to pay off my credit cards?
10. How long does it take to receive an advance?
11. What does the term “settle” mean?
12. What does “common law” mean?
13. May a lawyer refer his/her client to LawMax?
14. What is the “risk premium”?
15. How does your company participate in the lawsuit once I receive an advance?
16. What does “identifiable” injuries mean?
17. Can your company represent me in my lawsuit?
18. Can LawMax really help me where I live?

1. What are lawsuit loans?
   A lawsuit loan is a cash advance against the proceeds of a pending lawsuit. However, a lawsuit loan is really not a loan because it is made on a non-recourse basis. You only have to repay your "lawsuit loan" if and when you win your lawsuit or reach an out-of-court settlement. Should you lose your lawsuit, you do not have to repay the "loan". Lawsuit loans (or, more correctly, lawsuit advances) are made across Canada.



2. Why do I need a lawsuit loan?  
   You should apply for a lawsuit loan or lawsuit advance only after careful consideration. It can help you pay living expenses while you wait for your lawsuit to work its way through the legal system in Canada, which can takes months, even years.



3. How confidential is the information I provide to LawMax?   
   The information you and your lawyer provide to LawMax is 100% confidential. All hard copy documents are digitized and stored on secure servers, then the orginals are shredded.



4. What does “contingent” or “non-recourse” advance mean?   
   It means that repayment of the advance by the client is "contingent" on the resolution of the lawsuit. If you lose your case or do not receive payment from the defendant, you owe us NOTHING. By investing in your case, we share the risk with you.



5. How are lawsuit loans different than conventional loans?
   Conventional loans must be repaid regardless of your ability to repay them. A lawsuit loan or lawsuit advance only needs to be repaid if and when you win your lawsuit at trial or you and your lawyer reach an out-of-court settlement. Should you lose your case, or be forced to abandon it, you owe nothing. That's why a lawsuit loan is really not a loan at all!



6. How much money can I receive?   
   The amount of money you can receive depends on the probable value of your claim and its chances for a favorable outcome. Generally, a client is free to request any amount.



7. How much can I expect to pay for an advance from LawMax?   
   Our rates depend on the amount of the advance and the level of risk associated with your case. An investment committee evaluates each case individually. Generally, because of the high risks associated with investing in lawsuits, clients can expect to pay a sizeable risk premium for the advance.



8. Are lawsuit loans (or contingent advances) more expensive than bank loans?   
   Yes. A contingent advance and a bank loan are different. Clients are not required to repay a contingent or non-recourse advance if they lose their case or do not receive payment from the defendant(s). However, if you recover proceeds from the lawsuit, you will pay a sizeable premium for the advance. The premium is considerably higher than any interest that you would pay for a bank loan, although a bank loan must be repaid regardless of whether you win or lose your case.



9. Should I get an advance to pay off my credit cards?   
   Probably not. The applicable interest rate on credit cards varies, but is usually significantly less than the premium you would pay for the advance if you win your case. It makes sense to make the monthly payments until you receive the proceeds from your lawsuit, then use that cash to pay off your balances.



10. How long does it take to receive an advance?   
    The investment committee must evaluate every case before a decision can be made. In each case, we need to speak to the client’s lawyer and require his/her cooperation. In some cases we also need to see documents related to the case. We work promptly and efficiently, but cannot control the availability of the clients’ lawyer. Some cases have been funded within 48 hours, while others can take several weeks.



11. What does the term “settle” mean?   
    Many cases are “settled” out of court by the parties. This usually means that the defendant will compensate the plaintiff for his/her damages without going to trial.



12. What does “common law” mean?   
    “Common law” is a body of jurisprudence used in Canada.  It comes from England and allows for trials by jury and case precedent.



13. May a lawyer refer his/her client to LawMax?   
    Yes. In Canada, lawyers are allowed to refer clients to services and companies that can offer help. For example, an lawyer can refer a client to a specialized lawyer. Your lawyer can also refer you to LawMax.



14. What is the “risk premium”?   
    The "risk premium" is the amount of money that you will pay to LawMax in addition to the funds already advanced to you.



15. How does your company participate in the lawsuit once I receive an advance?   
    We do not participate in your lawsuit in any way whatsoever.



16. What does “identifiable” injuries mean?   
    It means that your injury can be seen or diagnosed by objective means such as MRI, X-ray, CT scan or other accepted method. Calculations of property and commercial damages must also have a sound basis.



17. Can your company represent me in my lawsuit?   
    No. We do not practice law and do not provide legal services. However, if you are having a hard time finding a lawyer to represent you, we offer a free lawyer referral service at www.freelawyerreferralservice.ca.



18. Can LawMax really help me where I live?
    Yes! LawMax is headquartered in Toronto, but we serve clients through Ontario and all of Canada except the Territories and Quebec. Whether your lawsuit is being tried in a rural area or in a major city, we can help.