A Practical Guide To Underwriting In Pre-Settlement Funding

Pre-settlement funding has become an increasingly relevant tool for plaintiffs navigating lengthy litigation timelines. Yet behind every funding decision lies a complex and disciplined process: underwriting.

In the context of consumer legal funding (typically personal injury cases such as motor vehicle accidents or premises liability), underwriting determines whether a plaintiff's claim qualifies for non-recourse financial support—funds advanced based solely on the case's merits rather than credit or collateral. For attorneys representing plaintiffs, understanding this process can streamline communication and expedite funding approvals.

What Underwriting Means in Consumer Legal Funding

Unlike traditional lending, pre-settlement funding is non-recourse. The funder is repaid (principal plus agreed fees) only by enforcing its contingent interest in the claimant's recovery. Accordingly, underwriting focuses entirely on case strength and expected recovery, not the plaintiff's financial profile.

The underwriter's role is to determine whether a case (1) has a reasonable likelihood of success and (2) has a sufficient projected recovery to justify the requested advance. This process protects plaintiffs from overfunding and ensures the funding company operates ethically and responsibly.

How the Underwriting Process Works

Underwriting generally follows five structured stages:

1. Application: The plaintiff applies online or by phone. The funding company contacts the attorney to confirm representation and obtain case materials.
2. Attorney Verification: Communication with counsel confirms ongoing treatment, insurance coverage, and damages.
3. Case Review: The underwriter evaluates relevant documents, such as the police report, complaint or demand letter, and medical records.
4. Decision and Offer: Based on case strength and available coverage, the underwriter recommends an advance—typically up to 10–20% of the anticipated settlement value.
5. Funding: Once approved, funds are usually disbursed within 24–48 hours.

This framework balances accessibility for plaintiffs with responsible evaluation for funders.

Core Evaluation Factors

Underwriters assess several key factors before recommending approval:

• Liability: Clear fault supported by evidence such as police reports, witness statements, or counsel's evaluation.
• Damages: Well-documented injuries that align with the incident and medical treatment records.
• Insurance Coverage: Adequate policy limits to support the proposed advance.
• Attorney Cooperation: Responsiveness and firm reputation influence both evaluation confidence and approval speed.
• Existing Liens or Prior Funding: Prior advances must be reviewed to avoid overfunding or conflicting liens.

When Underwriters Decline a Case

A funding denial is not about withholding help—it is a safeguard to prevent financial overextension. Common red flags include:

• Disputed or unclear liability.
• Gaps or inconsistencies in medical treatment.
• Attorneys who are unresponsive to verification requests (no response is, effectively, a response).
• Existing liens or prior advances that exceed likely recovery.

Cases can often be reconsidered once new documentation or case developments arise.

The Role of the Plaintiff's Attorney

Attorneys are central to an efficient underwriting process. Cooperation and prompt documentation allow for accurate case assessment. Underwriters depend on counsel for honest insight into liability, treatment, and case posture.

Attorney responsiveness often determines the turnaround time for funding decisions—sometimes within a single business day.

Technology's Expanding Role

Modern legal funding companies increasingly use AI-assisted tools to improve consistency and efficiency. These technologies can identify comparable case values and estimate likely settlement timelines.

Still, underwriting remains a human-driven process. Professional judgment, empathy, and an understanding of litigation dynamics remain irreplaceable in final evaluations.

Ethical Underwriting and Access to Justice

Ethical underwriting strengthens both the funding industry and the justice system. Responsible evaluation ensures that plaintiffs receive transparent, fair financial relief without jeopardizing case outcomes.

At Express Legal Funding, underwriting is not viewed as a gatekeeping exercise—it is a safeguard, ensuring that each advance aligns with the plaintiff's recovery and the attorney's pursuit of justice.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.