Ethical Issues

A question that perhaps seems obvious is, why can't injured people simply borrow money from their lawyers? The answer is that state bar associations recognize that when a lawyer becomes a creditor to a client, a conflict of interest is created that may interfere with the attorney-client relationship.
Sometimes an attorney won't want to sign any contract with a settlement financing company, and some states prohibit lawyers from signing onto liens of the type necessary to secure this type of funding. As a result, typically companies require that the injured person sign the contract, and that the attorney sign an acknowledgement of the client's instruction that the loan and associated fees be repaid from any eventual verdict or settlement.
At least one state (Florida) prohibits lawyers from participating in the settlement funding company's evalaution process. Absent lawyer invovlement, it is unlikely that a finance company would be able to obtain enough information about a case to risk issuing non-recourse funding.