By Reid Zeising, CEO and Founder, Gain Servicing
Key Takeaways:
- Civil justice has become a financial endurance contest, and injured plaintiffs without access to pre-settlement funding are the ones most likely to lose before a verdict is ever reached.
- Medical providers who treat personal injury patients on lien are carrying real financial risk, and the speed and integrity of the settlement process directly affects their ability to stay in business.
- The lawsuit funding industry gets a lot of attention for its flaws. The harder question is what happens to plaintiffs, providers, and attorneys when that funding disappears.
I’ll never forget this one 60 Minutes segment. It was about litigation funding. Lesley Stahl sat across from academics, investors, and plaintiffs. A question was raised during their chat that I’ll always remember: who can actually afford to go to court?
One answer came from Maya Steinitz, a law professor at the University of Iowa. “Accessing the courts in a civil process is a luxury good in today’s America,” she told Stahl. “Lawyers charge hundreds of dollars by the hour. So if you have been injured, if you have been discriminated against, if a contract that you have entered into has been breached, it’s simply too expensive to bring your case in court.”
Litigation funding is essential, she explained, even if it needs better regulation. I agree on both counts. But I want to talk about the part of this industry 60 Minutes segment glossed over, because it’s the part that intersects directly with what we do at Gain and with what medical providers and personal injury attorneys deal with every day.
The segment noted that companies offering quick cash to personal injury plaintiffs exist so that people “need the money to pay their household bills so they can hold out for larger settlements.” That one sentence describes the whole problem. When someone gets hurt and can’t work, the financial pressure doesn’t pause while the legal process runs its course. It compounds. And that pressure is what defendants and their insurers count on.
The Pressure to Settle Is Financial, Not Legal
Most personal injury cases don’t fail because the plaintiff didn’t have a strong claim. They settle low because the plaintiff ran out of runway. Medical bills pile up. Rent or mortgage payments are due. The attorney is working on contingency and absorbing costs with no guarantee of return. At some point, a lowball offer starts to look reasonable, not because it’s fair, but because waiting costs more than accepting.
This is the environment that pre-settlement funding exists to address. It gives plaintiffs a way to stabilize their finances while their attorney builds the strongest possible case. That’s not a complicated concept. It’s also not inherently predatory, though the 60 Minutes piece rightly identified cases where it has been. The question worth asking is what the alternative looks like, because the alternative is not a world where plaintiffs have more leverage. It’s a world where they have less.
What This Means for Medical Providers
There’s a piece of this that rarely gets covered in the broader litigation funding conversation, and it’s the role of the medical provider. When a doctor, chiropractor, physical therapist, or imaging center agrees to treat a personal injury patient on a medical lien, they are making a financial bet. They are providing care today against the promise of payment at settlement, sometimes months or years away. They carry that receivable on their books, manage the uncertainty around it, and in many cases, wait through case delays, disputes, and negotiations before seeing a dollar.
Negotiating medical liens after settlement is its own discipline. Attorneys and providers both know that lien resolution can make or break the final distribution to the plaintiff. When that process is slow, opaque, or adversarial, everyone loses. The provider waits longer. The plaintiff takes home less. The attorney’s relationship with both is strained.
The infrastructure that supports lien management, lawsuit funding, and case resolution matters to all three. When it works well, providers get paid in a reasonable timeframe, plaintiffs get fair value from their cases, and attorneys can focus on winning rather than managing cash flow problems on both ends of the relationship.
The Industry’s Real Problem
The 60 Minutes piece focused heavily on the lack of oversight and transparency in litigation funding. That criticism is fair and I am not going to argue against it. The Donald Sefcik case, a 9/11 first responder who borrowed $25,000 and owed back nearly $65,000, is exactly the kind of outcome that damages trust in the entire space. When the risk profile is low and the rates are predatory, that is not funding. That is exploitation wearing a financial services label.
But the answer to that problem is not to treat all pre-settlement funding as suspect. The answer is better standards, more transparency, and stronger alignment between what funders charge and the actual risk they are taking. Plaintiffs deserve to understand what they are signing. Attorneys deserve partners who are not working against their clients’ interests. Providers deserve a system where lien resolution is handled with integrity and speed, not used as a negotiating weapon.
The civil justice system was not designed to be a waiting game where the side with more financial staying power wins by default. Funding, when it is structured honestly, is one way to rebalance that. The industry’s credibility depends on making sure that’s what it actually delivers.