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Glossary of Terms for Lawsuit and Legal Plaintiff Cash Funding

Please note the definitions provided below apply to lawsuit funding and plaintiff cash funding. Several terms may have slightly different meanings when applied elsewhere.

Appeal
After a final judgment or other legal ruling, you can ask a higher court to reverse the decision.

Appeals Court
Any court—state or federal—that hears appeals from judgments and rulings of trial courts or lower appeals courts.

Bankruptcy
A federally regulated process whereby individuals or entities that have liabilities greater than assets seek judicial protection from creditors.

Bankruptcy – Chapter 13
A form of bankruptcy where an individual maintains some of his or her assets and pays creditors according to an approved plan.

Bankruptcy – Chapter 7
A form of bankruptcy where the courts wipe an individual’s debt clean, but he or she must liquidate their assets to repay creditors.

Bench Trial / Court Trial
A trial where, instead of a jury, the judge makes the final decision/judgment.

Class Action
When one or more people file a lawsuit on behalf of themselves and a larger group of people who have similar claims against the defendant.

Commercial Litigation
A lawsuit between a combination of individuals and/or businesses.

Contingency
An event that might not occur.

Contingency Fee
If they are successful in obtaining a positive outcome from a lawsuit, an attorney may collect a contingency fee for their services.

Contract
An arrangement with specific terms that has been agreed upon between two or more persons or entities in which there is a promise to do something in return for a valuable benefit.

Court Order
A legally binding ruling issued by a judge.

Defendant
A person(s) or organization(s) who is served with court papers by another who proposes an accusation.

Discount Rate
The interest rate used to calculate the present value of future cash flows.

Discounted Present Value
The net present value of future payments, which is determined by discounting the future payments to the present.

Funds Transfer
Withdrawing money from one account and depositing it into a different account.

Insurance Settlement
In order to settle an insurance claim within the guidelines stipulated in the insurance policy, the insurance company will make payment to the insured.

Insured
The person who is insured under the policy.

Insurer
The party that provides insurance coverage, typically through a contract of insurance.

Interested Parties
The payee, any beneficiary designated under the annuity contract to receive payments following the payee’s death and any other party that has continuing rights or obligations under the contract.

Judgment
The final ruling by a court in a lawsuit or appeal from a lower court’s judgment. The word “decree” is sometimes synonymous with judgment.

Jury Trial
A lawsuit where the case is heard by a jury and the factual questions and the final judgment are determined by that jury. This is distinguished from a “court trial” or “bench trial” in which the judge decides factual as well as legal questions, and makes the final judgment.

Lawsuit
A common term for legal action taken by one person or organization against another person or organization, to be decided in a court of law.

Legal Representative
A person acting for and legally authorized to execute a contract for an individual.

Liability
Legal responsibility for one’s actions or failure(s) to act.

Lien
Any official claim against property or funds for payment of a debt or an amount owed for services rendered.

Litigation
Any lawsuit or other legal proceeding where the courts determine a legal question or matter.

Lump Sum
The total amount of money paid in a single installment.

Multiplier
The number used to calculate how much is owed at the time of repayment. A multiplier, unlike interest, is usually a fixed number that only changes when certain conditions are met.

Net Value
After all debts have been paid, this is the value of an estate.

Non-Recourse
Also known as “without recourse,” in the case of plaintiff cash funding, non-recourse means that if the plaintiff receives cash funding and ends up losing their case, then they do not have to repay the funds.

Periodic Payments
Regular payments, typically made/received on a monthly or quarterly basis.

Personal Injury
An injury to a person’s body or mind, resulting from an accident.

Plaintiff
The person who initiates a lawsuit by filing a complaint with the court’s clerk against the defendant(s), demanding damages, performance and/or court determination of rights.

Principal
An initial sum of money invested prior to any fees or interest collected or paid.

Quote
A stated price for assets or services.

Settled Claim
When the original tort—i.e. personal injury or commercial lawsuit—claim is resolved.

Settlement
The resolution of a lawsuit, or legal dispute prior to filing a complaint or petition, without going forward to a final court judgment.

Settlement Offer
A written offer of a specific amount of money to be paid by a defendant to a plaintiff, which will settle the lawsuit if accepted within a specific period of time.

Settlement Agreement
An agreement made between an insurer and a policy owner (or beneficiary) concerning the manner in which the insurer will pay the policy proceeds to the beneficiary.

Settlement Date
The agreed upon date for transferring funds to complete a transaction.

Structured Settlement
A settlement where periodic payments are made in lieu of a lump sum.

Structured Settlement Agreement
The agreement, judgment, stipulation or release embodying the terms of a structured settlement, including the rights of the payee to receive periodic payments.

Terms of the Structured Settlement

With respect to any structured settlement, this includes the terms of the structured settlement agreement, the annuity contract, any qualified assignment agreement and any order or approval of any court or responsible administrative authority or government authority authorizing or approving such structured settlement.

Tort
A body of the law which permits an injured person from recovering compensation from the injuring party. When one person injures another, either intentionally or by negligence, a court may award money damages to the injured party so they will suffer consequences for their action. A civil wrong or wrongful act, whether intentional or accidental, from which injury occurs to another. Torts include all negligence cases as well as intentional wrongs which result in harm.

Trust
An entity created to hold assets for the benefit of certain persons or entities, with a trustee managing the trust and often holding title on behalf of the trust.

Trustee
A person or entity who holds the assets of a trust for the benefit of the beneficiaries and manages the trust and its assets under the terms of the trust stated in the declaration of trust which created it.

Underwriter
The insurance company receiving premiums and accepting responsibility for fulfilling the policy contract.

Verdict
A jury’s decision after a trial, which must be accepted by the judge to be final. A judgment by a judge sitting without a jury is not a verdict (see Judgment).

Workers Compensation
Compensation that covers the medical expenses and lost income of employees if they are hurt while doing work-related activities.

Wrongful Death
When the negligent or intentional act of a wrongdoer causes the death of a person.