Can I get a cash advance on my lawsuit in Pennsylvania, and what does Pennsylvania law say?

By Michael Shemtoub, trial attorney, Beverly Law. Updated November 2026.

WFIC v. LaBarre: what happened

The case was a business dispute, not an injury claim. In 1999 a company called Polymer Dynamics sued Bayer Corporation, claiming Bayer machinery had malfunctioned and driven it into insolvency. It expected to recover at least $100 million but “did not have the financial resources to continue the lengthy litigation and thus solicited investors” (2016 PA Super 209).

A group of “Litigation Fund Investors” lent money for the case in exchange for promissory notes. A jury awarded $12.5 million in 2005, and the federal appeals court affirmed in 2009. Before that, in August 2008, the company’s lawyer signed an amended fee agreement that raised his contingency fee from 7.5 percent to one-third, “with the understanding that the Litigation Fund Investors would be paid” out of that fee. The agreement allowed loan accommodations “up to Three Million Dollars.”

Bayer paid $14,412,765.65 into escrow on September 30, 2010. After taxes and fees, the money did not cover the company’s secured lender, which took what was there as payment in full. According to a party’s brief cited in a footnote, the lender paid the investors their principal only, without the promised interest or incentive. The lawyer received no fee. A creditor’s assignee sued in 2011, and the lawyer filed cross-claims for unjust enrichment against the lender, two majority shareholders and individual investors.

What the Superior Court held

On September 13, 2016, a three-judge panel affirmed summary judgment against the lawyer.

• Definition. “Champerty may be defined as the unlawful maintenance of a suit in consideration of some bargain.”
• Three elements. A prima facie case requires that “(1) the party involved must be one who has no legitimate interest in the suit; (2) the party must expend its own money in prosecuting the suit; and (3) the party must be entitled by the bargain to share in the proceeds of the suit.”
• Applied. The investors had no stake in the dispute, put in their own money and were promised repayment from the proceeds. All three elements were met, so “the 2008 Fee Agreement is champertous and, therefore, invalid,” and the lawyer could not collect a fee under it.
• Consequence. The court cited the rule that “if an assignment is champertous, it is invalid.” His unjust enrichment claims failed too.

The opinion does not discuss usury or consumer funding.

What WFIC means for a consumer advance

WFIC confirms that champerty is still part of Pennsylvania law and can make a funding agreement unenforceable. A typical consumer advance looks different on the second element: the money pays rent or bills, not the cost of prosecuting the suit, and many contracts say the company has no control over the case. We found no Pennsylvania appellate decision on whether that difference saves a consumer contract, so a court could go either way. For how other states handle this, see is pre-settlement funding legal in my state.

Pennsylvania’s usury law: Act 6

The Loan Interest and Protection Law, Act 6 of 1974, is the state’s general usury statute (Act 6 law information; full text).

• Section 201(a) sets “the maximum lawful rate of interest for the loan or use of money in an amount of fifty thousand dollars ($50,000) or less” at six percent a year, subject to exceptions elsewhere in the act and in other laws.
• Section 501 says that a borrower “shall not be required to pay to the creditor the excess over such maximum interest rate.”
• Section 502 lets a person who paid more than the lawful rate “recover triple the amount of such excess interest or charges,” generally within four years of the payment.

The open question is whether a contingent advance is a “loan or use of money” under Act 6. Courts in other states have split on that point, and we did not find a Pennsylvania appellate ruling on it. We also did not find a published position from the Pennsylvania Attorney General or the Department of Banking and Securities on consumer lawsuit advances, or a pending Pennsylvania bill we could verify on the General Assembly’s site.

Can a Pennsylvania lawyer give you money?

Not for living expenses. Pennsylvania Rule of Professional Conduct 1.8(e) says a lawyer “shall not provide financial assistance to a client in connection with pending or contemplated litigation,” except to advance court costs and litigation expenses, which may be repaid from the outcome, or pay them for an indigent client. Comment [11] explains that lawyers may not subsidize lawsuits, including by lending clients money for living expenses, because it could push clients into suits and give lawyers too large a stake in the result (Pa. Rules of Professional Conduct).

Your filing deadline in Pennsylvania

Under 42 Pa.C.S. 5524(2), “an action to recover damages for injuries to the person or for the death of an individual caused by the wrongful act or neglect or unlawful violence or negligence of another” must be filed within two years. Waiting for funding does not extend the deadline.

What to ask before you sign

• Does the contract give the company any say over your lawyer, the case or a settlement? Control over the suit is what champerty cases look at.
• Is the money limited to personal expenses, or could it pay case costs?
• What yearly rate does the payoff schedule produce, and how does it compare with the six percent figure in Act 6 for amounts of $50,000 or less?
• Which state’s law does the contract choose, and where must disputes be heard?
• Does your lawyer have to sign or acknowledge it? See does my lawyer have to sign a funding contract, and before signing, compare alternatives to pre-settlement funding.

Common questions

Related pages

Cash advance on a lawsuit · Laws by state · Injury law FAQs

Important: This page is general information, not legal or medical advice, and reading it does not create an attorney-client relationship. Every case is different; talk to a lawyer about yours. Texas cases are handled by the firm’s Texas-licensed attorneys, Joyce Ondich and John Efstathiou. Last reviewed: November 7, 2026.