A lawsuit in New York shows what happens when a litigation funder’s client hits a jackpot and decides not to settle up, according to a report in Legal Newsline. LawCash sued Jinsoo Nho and the Law Offices of Choi & Park seeking payment of $2 million from Nho’s nearly $7 million settlement. LawCash had provided $100,000 under the agreement with Nho.
Litigation funders provide cash to plaintiffs while their lawsuits are pending in exchange for a portion of whatever is recovered. While the interest on Nho’s agreement would ordinarily violate usury laws, litigation funders argue their agreements are not traditional loans and therefore not subject to those laws.