To Notarize Or Not To Notarize?

March 19, 2015
5min read

Here’s a question that keeps us up at night: should plaintiff financing contracts be notarized?

There are pros and there are cons, but let’s start with some background on the practice of notarization itself.

The office of the notary public has a storied history dating back to the Ancient Egypt. Notaries served as trusted witnesses to civil proceedings through the Roman Republic, the Middle Ages, and into the present day.

They perform a variety of thrilling functions: administering oaths, taking affidavits, and certifying contracts are but a few. In every case, the notary’s seal and signature guarantee that the parties in question acted of their own free will.

In the United States, notaries public are appointed by the state government – a fancy way of saying they passed an exam and/or filled out a form. Look to your left. Look to your right. Odds are, everyone you know is a notary.


Plaintiff financing contracts are relative newcomers to the world of law. There’s little standardization across the industry, though ALFA recommends a few best practices:

  • Disclosure of the “total amount of funds to be paid to the consumer” as well as the amount to be repaid by the consumer;
  • Acknowledgment that the legal plaintiff investor “shall have no rights to and will not make any decisions” relating to the underlying litigation;
  • Agreement that the plaintiff financing advance “may not be used to pay for attorneys’ fees” or any other litigation expenses;
  • Clearly-delineated right to cancel the contract “without penalty or further obligation” within five days of funding;
  • Requirement that the consumer’s attorney provide “a written acknowledgment” that he/she has read the contract and advised the consumer in signing it.

These are all valuable protections for the consumer, which make absolutely no mention of notarization. In fact, the only place the issue comes up is in an agreement between several litigation financing companies and the attorney general of New York – stipulating that contracts translated into languages other than English or Spanish must be notarized.

So, what about all the other contracts?


At first blush, notarization seems to protect the legal plaintiff investor more than the consumer. In the event that a plaintiff would prefer not to repay the money she owes, she might claim the contract was unclear or that she never signed it; the notary’s seal would undermine this.

In fact, notarization prevents two significant barriers to the consumer: time and cost.

Plaintiffs need their attorneys to sign off on financing contracts, but not every attorneys’ office has a notary. This is especially true of smaller and solo practices. Every minute a plaintiff spends driving to a post office or library – the notary’s natural habitat – is a minute spent without the financing they need.

Moreover, notarization typically comes at a price. It may not be a high price, but remember that plaintiffs who need financing are often in dire straits. They’re already struggling to pay medical bills, rent, and other expenses. In many cases they simply do not have the dollars to spare.

For our own part, Mighty currently recommends that its partners require notarization for investments over $5,000. But we are constantly scrutinizing and revising our processes in concert with the plaintiff financing industry at large.

Photo credit: Jeremy Bloom

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