Even if you follow the 6 commandments laid out in our previous post on case tracking, there are at least 5 common issues you should keep aware of, as they could instantly jeopardize your investment.
Identifying these problems will save you some at-risk investments, or, at the very least, help you more accurately value your portfolio and plan for future investments.
If you've followed a routine check-in procedure, called or emailed every 60-120 days, and have not heard back from the law firm after two routine check-ins, your investment should be considered "at-risk." To try to save your funding, amplifying your efforts is often your best bet at this stage.
You don’t need to write an elaborate email. In fact, the simpler the better. After all, do you really need the intimate details of the case, or do you just care that it’s still open and you haven’t been forgotten? If the latter, just ask this:
Hi, Kim, I am just confirming this case is still in litigation. A simple “yes” is all I need to know to not bother you again on this for a few more months. Thanks.
Remember to include both the attorney and paralegal or case manager so that you have two points of contact.
One of the most efficient ways to communicate is using forms with a combination of targeted multiple choice and short answer questions, to get specific answers.
See if the paralegal or case manager can assist you. If not, try to transfer to the attorney. Make sure to have the email of whomever you spoke to.
If the call goes well (i.e. you get the information you need), be sure to record basic info: something along the lines of "I called x, got update y from receptionist z"
Email your record to the person you talked to for confirmation:
"Hi Paralegal Jane, thanks for taking the time to connect today on the phone and informing me that Plaintiff Joe is still receiving treatment and that the demand has not yet been filed. Can you confirm yes/no that this information is accurate?"
This is your last-ditch attempt. In your mailer, be sure to include copies of the agreements signed by the plaintiff and the attorney, as well as a letter asking for an immediate call regarding the status of the case.
While this can take 3 different forms, each one is indicative of a problematic investment:
In the unfortunate event that the plaintiff has passed away, the trustee of the plaintiff's estate has the option to keep the attorney on the case and continue pursuing the claim.
The best bet in this situation is to try to get in touch with your contact at the law firm to determine whether or not the claim is continuing.
Your plaintiff-client could also file for bankruptcy. In this case, funders should contact the trustee and/or plaintiff's personal injury counsel or bankruptcy counsel to try and work out a resolution.
If no agreement can be reached, you could become a secured creditor and work to collect on bankruptcy proceeds.
For high-value cases, the servicer can retain an attorney to go before the bankruptcy court, arguing that its lien should not be considered as part of the bankruptcy estate and shall be paid out of the settlement proceeds of the personal injury case.
A parallel lien occurs when another funding company has a lien on the same claim as you. This problem typically arises when a local funder is involved rather than one using ARC or ALFA's searches, or the plaintiff and attorney fail to disclose prior funding.
The primary recourse here is to negotiate with other funding company regarding the liens in question.
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