Plaintiff’s Loans Can Destroy Your Case And Award


Very serious New York medical malpractice can completely devastate not only the victim, but also the victim’s entire family. This is because many times a victim is supporting many others in the family, and these dependents could be in serious trouble if their loved one is not able to support them. This can come from direct support, such as care and upbringing. Or this could occur in financial support such as making money for the family unit to pay the bills like the utilities, mortgage, and other payments.

If the medical malpractice is particularly bad, a victim and his or her family may try to figure out ways to earn money in other ways to help keep themselves afloat during the litigation. This is because, unfortunately, litigation can take a longer time than most people can keep themselves afloat. This is particularly true of medical malpractice cases, especially against several different defendants.

One option many injured victims ask are about pre-litigation loans. These are becoming more and more popular with plaintiffs. What they do is give a plaintiff a certain amount of money in exchange for a very high interest rate in the event of a successful verdict. The plaintiff only pays it back if they win. The amount varies depending on the risk of the case and the injuries.

But this is a very bad thing. Why? Because the company may loan $25k to a victim but then seek back approximately $75k from the lawsuit, including interest and fees. If a medical malpractice lawsuit results in a verdict of $100k, the victim will lose about $30K to their attorney for counsel fees and costs and disbursements of the litigation, including expert fees. The remaining $70k must be paid back right to the plaintiff’s loan company. This means the victim only receives $25k for a lawsuit which settled for $100k, and which the victim would have normally received $70k back. Horrible result!

In addition, plaintiff’s loans put victims and their attorneys in a bad position because the loan company will ask the attorney questions about the litigation, damages, and liability. This is so the loan company can assess the value of the case and the risks involved therein. This is NECESSARY before any company will loan out the money.

However, this is also NOT protected by attorney-client privilege. While virtually all conversations between client and attorney are privileged and protected, conversations between the client and the loan company and the attorney and the loan company are NOT protected. This means the other side can get the information from the lawsuit, determine what was said, her the opinion of the merits and damages, and even get the estimated verdict of the case. This can completely destroy any medical malpractice lawsuit.