How legal finance adds value to judgment preservation insurance transactions
Successful litigants holding trial-court judgments have traditionally found themselves positioned similarly to mountaineers atop Mount Everest: After a long, brutal and costly ascent to the summit, they’re only halfway home, as their opponents vow to appeal and take their victory away. Legal financiers and other financial professionals have for years offered some peace of mind to such litigants in the form of claim monetization—advancing a portion of the judgment on a non-recourse basis in exchange for an entitlement from the judgment if and when it is affirmed and ultimately collected. Recently, insurers have offered another financial product—Judgment Preservation Insurance, or JPI—that doesn’t advance funds against the eventual collection of the judgment but mitigates the risk of reversal on appeal.
Legal finance gives successful litigants the ability to access the mitigation of appellate risk that JPI offers. In addition to its customary roles of advancing cash to the successful plaintiff pending a final decision and financing legal expenses on appeal, legal finance can enhance the benefit of JPI coverage by tapping legal financiers’ capital, experience and expertise.