In the civil justice system, the ongoing debate about litigation funding spans a variety of issues. In the high-profile NFL concussion litigation, for example, Judge Anita Brody voided all existing litigation funding agreements between the former football players and lending companies. This was on the grounds that the football players who are the plaintiffs in this litigation have undergone serious brain injuries and thus are not of the right state of mind to enter into agreements such as these. In another recent instance, Senate Judiciary Committee Chairman Chuck Grassley (R-IA) introduced an act that would require third-party litigation funders to disclose whether they advanced money to class action plaintiffs under an agreement that would allow the companies to collect interest on the recovery. Now, questions about transparency with litigation funding has reached a lawsuit against Google.

unnamedWhat’s Going On with Google?

Space Data is alleging in a lawsuit that Google used confidential information and infringed three of the company’s patents. Google filed a motion in the Northern District of California to compel the disclosure of Space Data’s potential third-party litigation funding agreements. The court denied the motion, arguing that Google failed to establish how revealing potential litigation funding would be “relevant to any party’s claim” or “proportional to the needs of the case.”

Space Data did say that it did not have any third-party litigation financing in this case, but the court said that’s besides the point. Even if knowledge about funding agreements were relevant information, “potential litigation funding is a side issue at best.”

Why Would a Defendant Want to Know About Funding?

Knowledge about a plaintiff’s third-party funding could offer the defendant some helpful information. For example:

  • Knowing about funding arrangements could help determine if the agreements between the third-party financier and the plaintiff has given the funder implied or actual control over the litigation.
  • Litigation funding can help a plaintiff go the distance with their lawsuit. Thus, knowledge about a funding agreement may prepare the defendant for a lengthier litigation than originally anticipated.
  • On the other hand, many for-profit, non-recourse companies often tack on staggering compound interest that can influence how long a plaintiff is willing to stay in a lawsuit — an issue that can certainly give a defendant the upper hand.

However, if the non-recourse funding industry were a regulated environment, companies would be more apt to function on the ethos of transparency, disclosure and fairness. If that were the case, third-party funding agreements could simply be the lifeline plaintiffs need to make ends meet, so they can go the distance with their lawsuit.

The debate still wages on about whether litigation funding must be disclosed, and there are valid points to both sides of that argument. However I think it’s safe to agree that mandating the disclosure of potential litigation funding is taking it a step too far.

This post is part of a month-long series about Medicare set-asides. We welcome you to contact our comprehensive settlement planning firm, Milestone Consulting, with any questions or to seek advice about MSAs.

Establishing a Medicare set-aside (MSA) is a vitally important part of settlement for many personal injury cases. This type of fund helps ensure plaintiffs maintain eligibility for needs-based government benefits, even after their large settlement recovery comes in.

how to keep medicare eligibility

Part of that process involves determining the amount of the MSA allocation by adding up the cost of future medical treatment (which would otherwise be payable by Medicare Parts A & B) and future prescription drug treatment (which would otherwise be payable by Medicare Part D). An accurate allocation helps the beneficiary retain as much of the settlement as possible, while also ensuring that Medicare’s interests are protected.

The defense broker will typically run the allocation report. However, it’s important to know that this person is not required to keep the individual’s best interests in mind. In fact, allocation firms may neglect any of the following:

  • Navigating the cumbersome MSA review process: Even with the introduction of the Medicare Secondary Payer Recovery Portal, the review process can be complex.
  • Life expectancy: A person’s life expectancy should be a major determining factor in assessing the future cost of care and therefore, the set-aside amount.
  • Estimated generic pharmaceutical pricing: There are no regulations for pharmaceutical pricing in liability cases, so generic prescriptions can be substituted for brand name prescription medications, resulting in an overall lower MSA allocation.
  • Use of structured arrangements: In cases that require future surgical care, the claimant can elect to receive a lump sum in an amount equal to the first expected surgery and/or replacement, and two years of annual payments. The remaining funds are then annuitized and divided as annual payments over the course of the client’s life expectancy. If the claimant selects this option, once the payment for a given year has been exhausted, Medicare will cover any additional costs related to the injury during that year. This approach can lower the lifetime MSA funding requirement significantly.

These factors can all contribute to the cost of the MSA, sometimes significantly. In addition to reviewing the allocation prepared by the defense, plaintiffs also have the right to obtain a report from an allocation firm selected by the plaintiff’s attorney and/or settlement consultant.

To illustrate this point, here is an example of allocation reports that were prepared for a client.


  • Female, age 50
  • Rated Age: 57*
  • Life Expectancy: 30 Years
  • Injury: Traumatic Brain Injury

Defense Carrier Allocation:

  • Lifetime Services: $38,212.00
  • Lifetime Prescription Medication: $247,023.00
  • Lifetime Total: $285,235.00

Plaintiff Carrier Allocation:

  • Lifetime Services: $45,311.66
  • Lifetime Prescription Medication: $71,996.25
  • Lifetime Total: $117,307.91

Difference: The lifetime total of the plaintiff carrier allocation is $167,927.09 less than the defense carrier lifetime total, which means more money in the plaintiff’s pocket over time.

While there is not always such a drastic difference, it is still wise for individuals to get a second opinion from an allocation firm that isn’t tied to the defense’s interests. If you’re a personal injury plaintiff currently receiving government benefits or an attorney representing a person in this situation, consider getting a second opinion. The difference could be thousands of dollars.


* Rated age reflects the client’s actual life expectancy.


Personal injury litigation is high-stakes for both the plaintiff and his or her attorney. It’s not just about winning the case and obtaining the maximum financial recovery. Litigation also requires making major financial decisions. For example: should the plaintiff’s primary caregiver hire an agency or an individual for attendant care? Does your client need to establish a trust or an MSA to continue receiving government benefits? Should your client receive their settlement in a lump sum, or should it be spread out over time?

settlement and government benefits

Uncovering answers to these questions is not always an easy, intuitive process. Attorneys who enlist the help of a settlement planning firm get answers to these questions — and others they may not even know to ask – faster. These attorneys recognize that settlement planning is a necessary extension of the litigation process, as it helps ensure a plaintiff’s recovery is highly successful now and for their client’s future.

A comprehensive settlement planning firm functions like a family’s trusted wealth management office. Families with substantial assets often employ a family office to manage and preserve their wealth. A range of specialists — tax analysts, CPAs, portfolio and investment managers, wealth planners, trust officers and legal advisers — ensure they stay on the right track toward financial success. A settlement planner provides your client with this same concierge-type approach, but with a specialization in post-litigation scenarios. The team of professionals will work together to assess the plaintiff’s future needs and financial goals, and then use that information to develop a settlement plan.

What does a settlement planning firm do? Clients can expect the following services:

  • Prior to settlement, the team will assist the plaintiff and the attorney in building a framework of knowledge needed to make sound settlement decisions.
  • A settlement planner considers the totality of the individual’s needs (and the needs of his or her family) and then develops a durable recommendation for sustaining financial security with the settlement money.
  • The firm acts as an advocate for the plaintiff and the attorney in managing additional financial challenges presented by settlement, i.e. repaying non-recourse funding, dealing with liens, resolving marital disputes and preserving government benefits
  • A settlement planner will come up with a plan for investment management and steward the assets recovered in settlement.

By recognizing settlement planning as a logical step in the litigation process, you can help your client receive critical support before the settlement arrives and for years to come.

Untitled designWhen I was a First Lieutenant, I had the privilege of being platoon leader for eight Ah64 Apache Helicopters. I had only been stationed at Fort Hood for about a month when our sister platoon had an aircraft fire with Lieutenant Vickery. In less than eight minutes, the aircraft burned to the ground. Why? The combination of aviation fuel and the fact that the aircraft was made with a significant amount of magnesium made it highly flammable. Thank goodness both pilots lived, but the power of burning magnesium has never left me.

As we prepare for the 4th of July this year, think about those little sparklers that we love to give to our young kids. Sparklers burn at about 2,000 degrees Fahrenheit, according to the National Safety Council. That’s hot enough to melt gold. Our eyes and skin do not stand a chance against them. Fireworks get just as hot, and to make them more dangerous, they’ve been engineered to move when ignited. This can spell danger for anyone who isn’t professionally trained to handle them.

Additionally, here are a few statistics on fireworks-related injuries:

  • Fireworks start an average of 18,500 fires per year
  • In 2017, U.S. hospital emergency rooms treated approximately 12,900 people for injuries related to fireworks
  • Children under the age of 15 accounted for 36% of the fireworks injuries in 2017

KidsHealth® by The Nemours Foundation urges that if a child is burned by fireworks, immediately remove all clothing from the burned area and take him or her to a doctor right away. If an eye injury occurs, avoid touching, rubbing and/or flushing the eye. Cut out the bottom of a paper cup, place it around the eye, and seek medical help immediately.

Remember that there are alternatives to fireworks and sparklers, such as glow sticks and pen lights, which can be just as much fun in the dark for little ones. Stay safe, and enjoy celebrating our Independence Day!

The Bairs Foundation offers a litigation funding alternative to plaintiffs who need help making ends meet during the course of their lawsuits. At 7% simple interest, our model is substantially different from that of the vast majority of the non-recourse lending industry. In addition, we are aiming to change the funding space by motivating more organizations to do something similar. However, we can’t do it alone. The foundation is looking to join forces with like-minded members of the civil justice system to gain momentum and help more and more plaintiffs and their families.

JR Recent Photo (1)The newest member of the Bairs Foundation’s board is John Richmond of Lipsitz & Ponterio, LLC, a plaintiff’s personal injury firm in Buffalo, NY. Since 2009, John has devoted his legal career to the representation of those who have been seriously injured due to the negligence of others. He represents a variety of clients, including those hurt by asbestos, healthcare provider negligence, motor vehicle accidents, construction accidents, and more.

The team at the Bairs Foundation looks forward to working with John. We’re also always open to consider additions to our board. If our mission resonates with you and you’d like to get more involved, feel free to reach out to our Executive Director, Rachel Mathews, at For more information about the foundation itself, visit:

At the Bairs Foundation, we’re dedicated to creating a new model of funding for the civil justice system to help plaintiffs make ends meet during litigation. Reaching our goals is powered in part by joining forces with minds across the legal industry and beyond. Last week, the foundation welcomed its newest intern. Madison Frank has a background in law and hopes to focus more on the person behind the lawsuit. She answered a few questions for us below.

bairs foundation intern

Where do you go to college, and what is your major?

I am a rising senior at St. Lawrence University in Upstate New York, and I am a double major in History and Economics.

What drew you to intern for the Bairs Foundation?
I was originally drawn to the Bairs Foundation internship because I was extremely interested in the way that the Foundation is looking to make the the process of litigation financing more human-centered.

I have worked as a legal assistant for the past three years, and was hoping to get into something that focused more on individuals, and less on the specifics of the litigation process. I am very interested in being involved in civil justice as a general career goal, and thought that the foundation would give me valuable first exposure to this world.

What are your long-term career goals?
In terms long-term career goals, I am interested in the legal world, and am considering law school. However, I am mainly interested in the application of the law in terms of civil justice, if that makes any sense.

We look forward to continuing our work with Madison and seeing her shine in this field.

For more information about the Bairs Foundation and our 7% simple interest rate, click here.


If you’re a parent of a teenager, you could probably make a mental list of the daily challenges and uphill battles involving him or her. We spend a lot of time as parents trying to do right by our kids, planning for their futures so they can be as successful and happy as possible.

teen settlement for injury

If your child has sustained a catastrophic injury, you’re dealing with a whole new set of obstacles and challenges. Lawsuits involving teens can be terrifying for parents — first, the injury of the child, then compounded by the stress of litigation. It can be a lot to handle. And although it marks the conclusion of the lawsuit, settlement can be equally stressful.

Not many teens are equipped to handle such large sums of money responsibly, and our parent clients often express their concerns with adequately protecting their teen from the risks of having a substantial amount of money at a young age.

Having consulted on thousands of settlements in the last 15 years, I’ve come to learn that cases involving teens aged 13 to 17 with settlements in the range of $100,000 to $500,000 can pose the greatest challenge to the lawyers representing them, as well as to the courts and the child’s parents.

What are Parents’ Biggest Concerns as Settlement Approaches?

For the parents of a teen who is about to receive a settlement, there are often several overlapping concerns. These seem to be the major ones:

  • What could happen if the child receives all the money at age 18
  • That the money is safeguarded and achieves a modest return
  • Whether the money can be made available in amounts that increase in tandem with the child’s maturity (less money at age 20, more at 25, then more at 30)
  • If the parent can have the ability to positively influence the child’s decision making and financial risk taking after he or she becomes an adult

Some wrongly assume that parents most often want full control of the child’s money. However, I have found that it’s is rarely the case. Instead, the parents simply want to protect their teen.  

Many parents don’t want these scenarios to occur:

  • They (the parents) come between the child and his or her money
  • The large sum of money discourages the child from pursuing college or employment
  • The child frivolously spends all the money

Simply put, parents of an injured child typically want to strike a balance between receiving the money when it’s needed and preventing the child from accessing all of it until the child is mature enough to handle it.

Teens are the toughest age group when it comes to settlement. While young children have time to allow the money to grow, teens have less of that luxury. If the payout is from age 18 to perhaps age 25 or 30, the assets only have 10 years or less for growth. It can be difficult to achieve much in such a short duration.

There are a vast number of approaches for teens to get the most of of their settlement. For example, a client of ours fell from a balcony and suffered a traumatic brain injury. As a result, he began to deal with severe anxiety and depression. When he received a settlement, Milestone identified the best plan for him moving forward. We established a trust that pays for all his medical needs, with a Medicare set-aside so he can still get government benefits and a monthly prepaid debit card to help him manage money. His trust also pays for one of the best rehab facilities in the country. He is getting the most from his settlement, and his parents have the peace of mind that he has the right financial, emotional, psychological, and physical care.

Any settlement involving a teen requires a careful, detailed approach. If you’re a parent with a teen about to receive a settlement, be sure to build your planning team. Leveraging the services of a settlement planning expert, your attorney, and other helpful professionals can give your family  the best opportunity to properly preserve your teen’s settlement so it’s as beneficial as possible.

In a first-of-its-kind joint coordination conference and subcommittee meeting on the Rules of Federal Practice at Berkeley Law, the topic of litigation finance was front and center. With in-house counsel, both sides of the trial bar, and state court and federal judges, a key takeaway for many is that not all litigation finance is the same.

litigation finance meeting at Berkeley

At the roundtable and panel discussion organized by Emory Law Professor Jamie Dodge, it was presented that litigation finance should be defined as: “an unrelated third party to litigation providing one of the parties to litigation money in exchange for a part of a recovery on a contingent basis.”

There are two important facts about litigation finance that created a foundation for the discussion at Berkeley Law:

Litigation finance is not law firm finance. Law firms throughout the country work with lenders in the legal space, and traditional banks and they are underwritten as a corporation.  This was generally agreed to not be litigation finance.

Litigation finance breaks down into three broad categories: commercial litigation finance for law firms, commercial litigation finance for parties (plaintiff and defendants), and consumer litigation finance.

  1. Commercial litigation finance for law firms is the practice in which a funding company underwrites a single case or an inventory of cases, and provides the lawyer or the law firm with contingent financing against any fees that may become available in the resolution of the cases.
  2. Commercial litigation finance to parties is the practice of providing financing to a party to the litigation, either as a risk management process or to finance the cost of the litigation if the lawyers are not working on a contingency fee.   Cases that are frequently financed are generally very large commercial litigation in which the average contract may be $10 million or more and include business to business contract disputes, intellectual property, patent litigation etc.
  3. Consumer litigation finance (also called lawsuit loans, pre-settlement funding, or plaintiff funding) is the practice in which an individual plaintiff enters into a non-recourse funding agreement for cash up front in exchange for a portion of their recovery.

The third category of litigation finance enjoyed a significant amount of debate at the conference. Several important questions were raised:

Should the agreement be a loan, in order to subject the lenders to regulatory oversight and caps on interest charges? The Supreme Court of Colorado concluded this very thing, and the effect of this ruling is that all of the litigation funding companies have left Colorado — except for the Bairs Foundation, which provides advances to plaintiffs in both recourse and non-recourse agreements. (More on our 7% simple interest rate here, which is well below any state’s usury cap.)

Should the rates that litigation finance lenders or funders charge be boldly stated in their contracts? Most funders use a mode by which they express their interest in the cases as a dollar amount every six months, and not as an interest rate or APR.  As few states have any regulation (Tennessee, Vermont, Nebraska, Maryland are the ones that do), there is widespread concern about the failure to disclose what clients are being charged or how lay-people would compare or evaluate the true cost of litigation finance.

The Judiciary generally wanted to know if the funding companies exercised control or leverage over the parties or attorneys. A clear line in attorney ethics is that no one other than the attorney representing the client shall have control or decision-making authority in the course of litigation.

Should a plaintiff or their attorney be required to disclose the existence of any litigation finance agreement?  Senator Grassley’s new bill argues that any requirement to disclose may jeopardize attorney work product.

Does the unfettered, immediate get-your-cash-now model incentivize people to create litigation? On the extremes, of course it may, however those suits must bear the burden of getting past summary judgment, or they are thrown out, and so common practice in the industry of litigation finance is don’t underwrite bad lawsuits.

Should a plaintiff with cognitive deficits or a diagnosed neurological disease — such as many of the former NFL players involved in the NFL class action — be allowed to borrow against their potential recoveries? Senior United States District Judge Anita Brody thinks not. In a powerful reprimand of the litigation finance industry and the abuses, she vacated the assignments that NFL players entered into with RD Legal Funding. This decision is on appeal to the Third Circuit, but it may provide the players, their families and their lawyers the leverage they need to negotiate these abusive contracts down.

Litigation finance for consumers or plaintiffs is an “access to justice” issue. If plaintiffs cannot prevail financially for the long duration that litigation often requires, they will be forced to settle early, or withdraw altogether.   There is little doubt that large corporations and reinsurers and insurance companies have plenty of resources to litigate. Litigation finance levels the playing field. In this sense, availability or access to capital during litigation is a civil justice issue.

However, a fundamental problem with any litigation finance is that a plaintiff may be not willing to accept a settlement, even if it’s a prudent one, as they stand to recover so little due to the required repayment of litigation advances. The single greatest concern over consumer litigation finance is how exacerbated the cumulative interest charges may become over time.  It is reported that although with the exception of few good funders offering advances in the 30% range, there exist many firms that charge 50%, or 80%, and even 200% interest.

A lawsuit is an asset, and considered to be among the property rights of individuals.  A counter-view among some in civil justice is that it’s their property, and if they want to sell it for a deep discount, it’s their choice.

Juxtapose that with the very real circumstances of real people who have been disabled, no longer can work, and have no safety net. Should these fellow citizens be preyed upon or taken advantage of during what is likely the most financially vulnerable time in their lives? A large portion of all funding requests are for basic shelter for people being kicked out of their apartments or facing foreclosure on their homes.

Because of all of these challenges, and the harsh necessity that people exhaust financially, is why we founded Bairs Foundation. It is our mission to provide ethical and compassionate funding to those in need. Stakeholders in the civil justice system are paying attention to our novel, “nonprofit” approach. Our long-term goal is to see philanthropic organizations working in the non-recourse space in every state in the United States.


About John Bair

John Bair has guided thousands of plaintiffs through the settlement process. Motivated by a desire to assist others in protecting their financial well-being, John and his wife Amy established the Bairs Foundation. At seven percent simple interest, the organization provides the financial assistance families need during litigation. Read more at

Needs-based government programs like Supplemental Security Income (SSI) and Medicaid base a person’s eligibility on how much income and assets he or she has. If a beneficiary receives a personal injury settlement, that large sum of money can disqualify them from receiving benefits.

In our last post, we discussed a few of the public programs that are “means tested,” meaning those that come with income and asset limits. Fortunately, there are a few options for keeping a personal injury settlement AND these benefits. For example, some plaintiffs establish a special needs trust to supplement government benefits by paying for non-covered services or equipment. Another approach is to try to re-qualify for benefits through a spend down.

what is the difference between medicare and medicaid

A spend down is a process of spending “excess income,” meaning income above the amount allowed to maintain eligibility for needs-based benefits.

Paying for certain medical bills counts toward a spend down. These bills include:

  • Your medical bills or your spouse’s or child’s medical bills
  • Bills of a child who does not live with you, but whose medical bills you help cover
  • Certain past unpaid medical bills for you or the people above
  • The part of any medical bill not covered by benefits

Individuals receiving needs-based government benefits can also purchase “exempt resources” with excess income to continue eligibility. Exempt resources are items not covered by their benefits. These items include, but are not limited to:

  • A home including mortgage, monthly rent, renovations and furnishings
  • A vehicle including registration and insurance
  • Medical, dental and eye care expenses/bills not covered
  • Education expenses
  • Entertainment/recreation expenses
  • Travel
  • Cost of hiring a financial planner or estate planner
  • Paying off debts
  • Prepaid burial arrangements
  • Personal hygiene and clothing
  • Purchase clothing

A settlement planner is particularly useful in setting up the spend down approach, as he or she can help the beneficiary strategically and appropriately spend the money to comply with government programs.

It’s critical to establish a spending plan prior receiving the settlement to avoid too much lag in government benefits eligibility. The spend down must also be reported to the Social Security Administration. An expert financial planner can ensure that these purchases are reported and documented properly to comply with government rules and regulations.

If you are about to settle a personal injury case, two things are likely true: the settlement is for a substantial amount of money, and you have financial and medical needs that are (or can be) met through government benefits. Because these benefits programs are needs-based, the influx of settlement proceeds can get in the way of your eligibility. Fortunately, there are options to ensure you can have both you settlement and the benefits you qualify for.

how much does an SNT cost

Some public benefits are means-tested, meaning that there are income and asset limits. Other public benefits are not means-tested, which means that the injured plaintiff can have money without losing eligibility.

Those that are not means-tested include:

Social Security Disability Insurance (SSDI): A monthly cash benefit that depends on the amount paid into the Social Security system
Medicare: Provides medical coverage for hospital, outpatient, and prescription drugs

If a person is receiving public benefits that are not means-tested, obtaining a settlement should not affect his or her eligibility.

Means-tested programs include (but are not limited to):

  • Supplemental Security Income (SSI): Helps pay for basic needs like food, clothing, and shelter
  • Medicaid: Covers medical costs, certain types of care, group housing, etc.
    SNAP (Food Stamps): Provides an Electronic Benefit Transfer (EBT) card to pay for food
  • Federally-Assisted Housing (Section 8): Provides subsidized rent
  • Children’s Health Insurance Program (CHIP): Covers medical care for low-income and middle-class individuals (not only disabled individuals)

If an individual is receiving public benefits that are means-tested, certain trusts and settlement planning tools can allow the beneficiary to have the personal injury settlement while maintaining benefits.

If you’re about to obtain a settlement and you also receive government benefits, it would be useful to talk to an expert to ensure you’re protecting your eligibility. A comprehensive settlement planning firm will assess the benefits you currently receive as well as your future needs and financial goals. Together, you’ll then develop a plan to ensure your settlement and government benefits are as helpful as possible.