Employment Law Case Funding

Employment law case funding is a type of loan you can secure to pay for your legal and living expenses while fighting a job-related court case. If you lose your case, you rarely have to pay the loan back. You can apply for employment case funding with help from your lawyer.

Terry Turner, Financial writer for Annuity.org
  • Written By
    Terry Turner

    Terry Turner

    Senior Financial Writer and Financial Wellness Facilitator

    Terry Turner is a senior financial writer for Annuity.org. He holds a financial wellness facilitator certificate from the Foundation for Financial Wellness and the National Wellness Institute, and he is an active member of the Association for Financial Counseling & Planning Education (AFCPE®).

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    Savannah Pittle
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    Savannah Pittle

    Senior Financial Editor

    Savannah Pittle is an accomplished writer, editor and content marketer. She joined Annuity.org as a financial editor in 2021 and uses her passion for educating readers on complex topics to guide visitors toward the path of financial literacy.

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  • Financially Reviewed By
    Thomas J. Brock, CFA®, CPA
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    Thomas J. Brock, CFA®, CPA

    Investment, Corporate Finance and Accounting Professional

    Thomas Brock, CFA®, CPA, is a financial professional with over 20 years of experience in investments, corporate finance and accounting. He currently oversees the investment operation for a $4 billion super-regional insurance carrier.

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  • Updated: November 10, 2023
  • 5 min read time
  • This page features 9 Cited Research Articles

Key Takeaways

  • Employment law case funding is a type of lawsuit loan that you can use to pay attorney fees and living expenses during an employment-related lawsuit. 
  • You can access employment case funding before or after a settlement, depending on your needs. 
  • Employment case funding is non-recourse, meaning lenders can’t force borrowers to repay their loans if they lose their legal case. 
  • You can apply for employment case funding for cases related to discrimination, harassment, wrongful termination or any other employment-related grievance.
  • Lenders will evaluate your application based on the strength of your case and your expected settlement payout. The more your lender thinks you’ll win, the more money you can get in your loan.

What Is Employment Case Funding?

Employment-related lawsuits are more common than you might think. According to the U.S. Equal Employment Opportunity Commission (EEOC), 61,331 employment-related charges were filed in U.S. courts in 2021. Cases that resulted from these charges generated an estimated $34 million in payouts.

Employment case funding offers workers a way to cover expenses during an employment-related lawsuit. This includes lawyers’ fees, other legal expenses and daily living expenses incurred while you’re between jobs.

Employment case funding significantly improves plaintiffs’ financial stability. Many people who undertake employment-related litigation don’t have enough money to pay for upfront court fees, let alone several months’ worth of lawyers’ fees. Without access to lawsuit funding, these people might never bring their case to court. With it, they can fight for their rights and eventually win compensation for their troubles.

Employment case funding is usually non-recourse. This means that if you lose your case, you’re not required to pay the money back. You’ll only have to pay back your loan if you win a settlement. If your payout is a lump-sum settlement, you’ll pay back your loan immediately. If your payout is a structured settlement, you’ll pay back the loan in installments. 

Employment law, which is also referred to as labor law, encompasses the assortment of regulations, rules and principles that govern the relationship between employers and employees. Prominent aspects of employment law relate to hiring, compensation and benefits, workplace safety, discrimination and termination.

How Employment Case Funding Works

You can receive pre-settlement funding or post-settlement funding for your employment lawsuit.

Pre-settlement funding gets you cash to pay for your legal fees and other expenses before your case settles. Post-settlement funding comes after you’re awarded a settlement. Companies who offer this type of funding use your upcoming settlement money as collateral for a cash advance, helping you get your hands on the money you need sooner. 

Fees and interest rates for employment case funding depend on the company you work with. Some states cap the amount of interest a lender can charge for a third-party litigation loan like this. But you can expect to pay around 10% interest for the money you receive. 

What Kinds of Employment Cases Can Be Funded?

Employment case funding is available for any employment-related lawsuit, including cases related to discrimination, harassment, wrongful termination and retaliation.

According to the EEOC, the most common types of discrimination that prompted people to file employment law cases in 2021 included:
  • Disability: 37.2%
  • Race: 34.1%
  • Sex: 30.6%
  • Age: 21.1%
  • National Origin: 10.1%

If you believe someone treated you unfairly at work, consult an attorney. A lawyer will let you know if you have a strong enough case to bring the matter to court. You can then apply for employment case funding if you need it. 

Qualifying & Applying for Employment Case Law Funding

Most companies who offer employment case funding decide whether to lend you money based on two factors: the strength of your case and the potential payout from your lawsuit.

Because you don’t have to repay most employment case fundings if you lose in court, there’s no credit check or employment check involved. Lending decisions get made based solely on the merits and strengths of your legal claim.

You can apply for employment case funding on your own or with your lawyer’s help. Working with an attorney is strongly recommended. Attorneys are well-acquainted with reputable lenders and will consult with your funding company to help it understand the specifics of your case. In fact, many lenders will only accept funding applications from people who are being represented by a lawyer. 

How Employment Law Case Funding Can Help You

Employment law case funding has helped countless Americans cover their expenses while fighting a legal claim against an employer. If you’re worried about fighting an injustice you’ve experienced at work because of the financial toll the court case would take on your family, employment law funding can give you the peace of mind you need to pursue justice. It can also help you keep up with the payment schedule for any debts you owe, protecting your credit score through this difficult time. 

Accepting employment law case funding also comes with some risks. Some companies who offer this type of funding charge high interest rates that can make repayment difficult, especially if you receive a structured settlement instead of a lump sum. Other companies aren’t the legitimate lenders they appear to be. Some may attempt to scam you.

If you’re considering taking an employment-related case to court, consider contacting an organization that provides legal aid in your area. If you qualify, you could get free or low-cost legal help. You can also contact advocacy groups like the National Institute for Workers’ Rights for further information on employment law and resources to help you make your case. 

Considerations Before Applying for Employment Law Case Funding
  • Make sure you really need it. Despite their non-recourse provisions, lawsuit loans are not free money. Expect to pay your loan back with interest. 
  • Shop around for the best deal. Funding companies offer differing interest rates, and some have better repayment terms than others. Do your due diligence.
  • Trust your lawyer. If an attorney tells you that your chances of getting approved for employment case funding aren’t good, believe them. Resist the urge to apply to unknown lenders or those with suspect track records.
Please seek the advice of a qualified professional before making financial decisions.
Last Modified: November 10, 2023