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How Lawsuit Funding can Help In Commercial Litigation

Posted on November 18, 2011 by Fast Lawsuit Team

It’s a dog-eat-dog world out there – and businesses can fall into that same world. Sometimes, businesses find themselves as victims of a legal breach or a business dispute and in turn as complainants in a commercial lawsuit against another business.

For instance, if the software you bought from a vendor crashes and a large percentage of your business information is lost, how do you pay for the cost of data recovery and the purchase of another operating software while you are suing the erring vendor? What happens when another business commits a breach of contract and reneges on a crucial aspect of your operations? How do you deal with the effect this could have on your operations, pacify customers, and manage the negative image this event can give to your business, even as you are spending to strengthen your breach of contract lawsuit?

The effect of a lawsuit on a business

The challenge of a commercial lawsuit is that this may bleed the company (and even the owner’s) assets dry. Money that is supposed to support the company’s operations or fund the company’s growth is often diverted to spend for the lawsuit. You need funds to cover your operating expenses and payroll, as well as buy equipment or inventory.

Yes, business lawsuits may turn out to be expensive affairs. They may seriously hamper the operations and financial health of your business, especially if you are taking on a business that has deep pockets and the lawsuit stretches on for months or years before the settlement is in sight.

And since a lawsuit is unsure, there may be problems with finding more funding. Investors will be hesitant to put in funds due to the uncertainty of the results of the lawsuit. Existing investors may even pull away, so may customers and suppliers.

Kinds of commercial lawsuits

Commercial lawsuit cases usually cover offenses such as fraud, copyright infringement, intellectual property violations, unfair competition, libel and slander, disputes in real estate, consumer fraud, breach of contract, or product liability.

Breach of Contract Lawsuit. This is when the failure of the other party in a contract (whether written, implied or given verbally) to meet the terms of the contract results in damages to the complaining party.

Copyright or Intellectual Property Infringement Lawsuit. This happens when an entity makes use or copies your material (music, writings, research, artwork, product, designs, patents or trademarks) for commercial gain without your consent. You may be a software company that suffered from financial loss due to other business’ copying of your programs and selling them as their own. You may be a producer of publications and books, where someone copied the contents. You may be a music recording company who lost out on sales because there are entities that sell bootlegged copies of what you legally own.

Libel and slander. This pertains to false statements given that results in damage to a business’ reputation so that they are exposed to the condemnation, contempt and hatred of the public. This could result to a loss of sales or a hit on the business’ public image which may result to the withdrawal of investors.

Defective Products. For commercial lawsuits, this covers mostly products related to the course of the business operations such as machinery and equipment, defective raw materials, construction products and the like. When defective products result in personal injury or wrongful death, the victims have the right to sue for damages.

How Lawsuit Funding can Help

At this particularly troubling time, the company and its officers may be tempted to accept a settlement offer that is far from the lawsuit potential worth – which may turn to hundreds of thousands or even millions.

The good thing is that businesses can also turn to lawsuit funding to help support their cash flow and ensure their stability even as they are waiting for the lawsuit to settle. This buys the company more time to build a stronger case and perhaps negotiate for a settlement from a position of strength.

With access to commercial litigation funding, businesses can continue with their operations and expansion even as they await the verdict of the lawsuit. In today’s tough economy, it is a comfort that a small business has some help in fighting for what is right. A business owner does not have to worry that the business he has built from the ground up will see its end just because of a commercial lawsuit.  Commercial lawsuit loans are available based not on the business’ capacity to repay the “lawsuit advance”, but on the merits of the case.


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