Glossary of Legal Terms

If you’ve never been involved in a lawsuit, the legal process can feel overwhelming, especially with all the new terminology you’ll hear and read.

This glossary of legal terms breaks down the language you’re most likely to encounter, from filing a claim to reaching a verdict, in plain English. Bookmark this page as an educational resource and reference any time you need a clear, straightforward definition.

Accident Report

An official document created by law enforcement, an employer, or another authority that records the details of an accident, including what happened, who was involved, and any injuries sustained. In personal injury cases, an accident report can serve as key evidence when establishing fault.

Affidavit

A written statement made under oath and signed in the presence of a notary or other authorized official. Affidavits are used in legal proceedings to present facts as evidence without requiring the person to testify in court.

Assumption of Risk

A legal defense arguing that the plaintiff voluntarily accepted the known risks associated with an activity, which may limit or bar their ability to recover damages. For example, a spectator at a sporting event assumes certain risks inherent to that sport.

Attorney

An attorney is a legal professional trained to interpret and apply the law to cases they are hired to litigate. Attorneys represent and advise the parties (defendant or plaintiff) involved in a lawsuit, helping them to navigate the legal system and win their case.

An attorney, oftentimes called a lawyer, generally handles criminal or civil cases and may specialize further in areas such as immigration law, family law, or personal injury law. An attorney can help you secure pre-settlement funding while they fight for a fair settlement.

Bad-Faith Insurance Claim

A situation in which an insurance company unreasonably denies delays, or underpays a valid claim, or otherwise fails to fulfill its obligations to the policyholder.

Burden of Proof

The obligation placed on a party in a legal proceeding to prove the facts supporting their claim. In personal injury cases, the burden typically falls on the plaintiff, who must demonstrate by a “preponderance of the evidence” (meaning it is more likely true than not) that the defendant’s negligence caused their injuries.

Cap

A cap is a limit on something. In the context of pre-settlement funding, the cap is the most a borrower will have to repay the pre-settlement funding provider. At USClaims, we guarantee you’ll never pay more than 2x the amount of your cash advance** – no matter how long it takes to resolve your case.

Cash Advance

A cash advance is money provided to you by a funding company based on the amount you are expected to receive from your settlement.

Pre-settlement funding is a form of cash advance that is issued against a portion of your anticipated settlement amount before your case gets resolved. Once you win your case, your attorney will use your settlement proceeds to repay the advanced amount, plus agreed-upon fees and interest.

Causation

The legal requirement that a defendant’s actions or negligence directly caused the plaintiff’s injuries. It is not enough to show that a defendant acted negligently; you must also show that the negligence was the direct cause of the harm suffered.

Champerty and Maintenance

Two related legal doctrines that historically prohibited third parties from financing or assisting in another person’s lawsuit in exchange for a share of the proceeds. These doctrines have largely been reformed or abolished across most U.S. states, and courts have generally found that pre-settlement funding does not constitute champerty, because funding companies purchase an interest in the potential proceeds rather than a stake in the litigation itself.

Civil Case / Lawsuit

A legal dispute between two or more parties, typically an individual and another person, business, or entity, in which one party seeks monetary compensation or other relief for harm suffered. Personal injury claims are civil cases, as opposed to criminal cases, which are brought by the government.

Claim Adjuster

A representative employed by an insurance company who investigates claims, evaluates damages, and determines how much the insurer will pay on a covered loss. Adjusters work on behalf of the insurance company, not the claimant.

Claimant / Plaintiff

These two terms are often used interchangeably to refer to the individual who has been injured and is seeking compensation. “Claimant” is typically used in the context of insurance claims, while “plaintiff” is the legal term used once a lawsuit has been formally filed.

Class Action

A type of lawsuit in which a large group of people with similar injuries or claims sue a defendant collectively rather than individually. Class actions are common in cases involving defective products, data breaches, or widespread corporate misconduct.

Comparative / Contributory Negligence

Legal doctrines that address situations where the injured party shares some degree of fault for an accident. Under comparative negligence, a plaintiff’s compensation is reduced in proportion to their percentage of fault. For example, if you are found 20% at fault, you recover 80% of your damages.

Under contributory negligence, used in a small number of states, a plaintiff who bears any fault may be barred entirely from recovering damages. Knowing which rule applies in your state can significantly affect the value of your case.

Compensatory Damages

Financial awards intended to compensate an injured party for losses resulting from an accident or injury. Compensatory damages fall into two main categories:

• General damages, which covers non-economic losses such as pain and suffering, emotional distress, and loss of enjoyment of life.

• Special damages (also called pecuniary or out-of-pocket damages), which cover quantifiable financial losses including medical bills, lost wages, and property damage.

Together, these categories aim to make the injured party “whole,” restoring them as much as possible to the position they were in before the injury occurred.

Complaint / Lawsuit Filed

A complaint is the formal legal document that initiates a lawsuit. It outlines the plaintiff’s allegations, the legal basis for the claim, and the relief being sought. Once a complaint is filed with the court, the lawsuit is officially underway, though many personal injury cases settle before ever going to trial.

Contingency Fee

A fee arrangement in which an attorney is paid a percentage of the client’s settlement or court award rather than charging upfront hourly fees. If the case is unsuccessful and no money is recovered, the attorney typically receives no fee, making legal representation accessible to injury victims regardless of their financial situation.

Contingent Claim

A legal claim whose outcome and any resulting payment depends on a future event, typically the resolution of a lawsuit or insurance claim.

Pre-settlement funding from USClaims is based on the anticipated value of a contingent claim; because repayment is tied to a successful outcome, no repayment is required if your case is not won.

Deductible

The amount an insured party must pay out-of-pocket before their insurance coverage kicks in. In personal injury cases, understanding the applicable deductibles, whether your own or the at-fault party’s, can affect how compensation is calculated and distributed.

Demand Letter

A formal written communication sent by a plaintiff or their attorney to the defendant or the defendant’s insurance company, outlining the facts of the case, the injuries suffered, and the amount of compensation being sought. A demand letter often marks the start of settlement negotiations.

Deposition

A formal, out-of-court proceeding in which a witness or party answers questions under oath, with a court reporter transcribing the testimony. Depositions are a key part of the discovery process and can be used as evidence at trial or to lock in a witness’s account of events.

Disclosure Statement

A disclosure statement is an illustrative table used in financial documents to show the obligations over a period of time. The purpose of a disclosure statement is to provide transparency so there are no surprises at the time of repayment.

A disclosure statement may show the amount funded, the finance charge, and the total payment amount. The appearance of the disclosure statement may vary depending on your state’s laws, but the concept remains the same. As your case moves forward, the disclosure statement will inform you of your financial obligations over specified periods of time.

Discovery

The pre-trial phase of litigation in which both parties exchange relevant information and evidence. Discovery tools include depositions, interrogatories, requests for documents, and independent medical examinations. A thorough discovery process helps both sides build their case.

Docket

The official record or schedule maintained by the court that lists all cases and their associated filings, hearings, and proceedings. When your attorney refers to something being “on the docket,” they mean it has been formally scheduled or entered into the court’s records.

Duty of Care / Reasonable Care

A legal obligation requiring individuals and entities to act with the level of caution and prudence that a reasonable person would exercise in similar circumstances. Establishing that a defendant owed you a duty of care and breached it is one of the foundational elements of a personal injury claim.

For example, let’s say a grocery store employee mopped the floors and forgot to put a wet floor sign out. Then, a customer walks in, slips, and breaks their wrist. By omitting to put out the wet floor sign, the grocery store employee did not fulfill their duty of care and could be liable for the customer’s injuries.

Evidence

Any information, documentation, or physical material used to prove or disprove facts in a legal proceeding. Evidence in personal injury cases can include medical records, photographs, witness statements, accident reports, and expert testimony, all of which help establish fault and the extent of damages.

Fault

Legal responsibility for an accident or injury. Determining fault involves assessing which party’s actions or failure to act caused the harm in question, and fault directly affects who is obligated to pay damages and in what amount.

Filing

The formal submission of legal documents to a court. Filing a complaint, motion, or other document officially enters it into the court record and triggers specific timelines and obligations for both parties.

Foreseeable Risk

A risk that a reasonable person in similar circumstances would anticipate or predict as a likely consequence of their actions. In negligence cases, defendants can generally only be held liable for harms that were foreseeable, not for every possible outcome of their conduct.

For example, let’s say a contractor working on a roof leaves his ladder propped against the side of the house, unattended, while he takes his lunch break. The ladder is blown over by the wind and damages a nearby car. You could argue this was a foreseeable risk that the contractor should have been aware of and therefore should not have left his ladder leaning against the house unattended.

An unforeseeable risk in this situation could be something like, the sound of the ladder hitting the car startled a woman across the street, causing her to spill her coffee and burn her hand. Even though the events are interconnected, the contractor could not have reasonable foreseen the coffee spill as a risk of leaving his ladder up.

General Damages

General damages refer to the non-economic component of compensatory damages, covering losses such as pain and suffering, emotional distress, and loss of enjoyment of life that do not have a fixed dollar value.

Guardian ad Litem

A court-appointed representative who acts on behalf of a minor or incapacitated person in legal proceedings. In personal injury cases involving children or individuals who cannot advocate for themselves, a guardian ad litem ensures their interests are protected throughout the process.

HIPAA Act

The Health Insurance Portability and Accountability Act is a federal law that protects the privacy and security of individuals’ medical information. In personal injury cases, HIPAA governs how medical records can be shared, and plaintiffs typically must sign a release form authorizing their attorneys and relevant parties to access their health information.

Independent Medical Examination (IME)

A medical evaluation requested by the defense or an insurance company, conducted by a physician of their choosing, to assess the nature and extent of the plaintiff’s injuries.

Injury / Injury Symptoms

An injury is physical, psychological, or economic harm suffered as a result of an accident or another party’s negligence. Injury symptoms are the physical or mental manifestations of that harm, such as pain, limited mobility, or emotional distress.

Insurance Claim

An insurance claim is a formal request submitted to an insurance company seeking compensation for a covered loss.

Insurance Coverage

Insurance coverage refers to the specific protections and limits outlined in a policy that determines what losses the insurer is obligated to pay.

Investigation

Investigation is when an attorney starts to gather evidence and information relevant to a legal claim. In personal injury cases, an investigation may involve them reviewing accident reports, interviewing witnesses, collecting medical records, and consulting expert witnesses to build a clear picture of what happened and who is responsible.

Judgment

The official decision issued by a court at the conclusion of a legal proceeding. In personal injury cases, a judgment may award the plaintiff a specific dollar amount in damages or rule in favor of the defendant, depending on the evidence and applicable law.

Jurisdiction

The legal authority of a court to hear and decide a case. Jurisdiction is determined by factors such as geography, the type of claim, and the amount of money at stake. Filing a case in the wrong jurisdiction can result in dismissal.

Jury

A group of citizens selected to hear the evidence in a trial and render a verdict. In personal injury cases that go to trial, a jury evaluates the facts, determines fault, and decides the amount of damages to be awarded, if any.

Lawsuit Loan

Lawsuit loans are a term commonly used to describe pre-settlement funding. However, a lawsuit loan is not a traditional loan in the legal sense because you do not have to repay a lawsuit loan if your case is unsuccessful. With traditional loan types, like personal loans, you must repay your lender regardless of your case circumstances.

Legal Representative

An attorney or other authorized individual who acts on behalf of a party in a legal matter. In personal injury cases, your legal representative advocates for your interests, negotiates with insurance companies, and guides you through every stage of the claims process.

Letter of Protection / Lien

A letter of protection is a document issued by an attorney guaranteeing that a medical provider will be paid from the proceeds of a future settlement or judgment, allowing injured plaintiffs to receive treatment without paying upfront.

A lien is a legal claim against those same settlement proceeds, securing repayment for services rendered.

Letters of protection and liens are closely related: both are tools that allow plaintiffs to access necessary care while their case is pending.

Liability

Legal responsibility for causing harm or damages to another party. Establishing liability is a central objective in personal injury cases, as it determines who is obligated to compensate the injured party for their losses.

Litigation

Litigation is the process of settling your case in court. The attorneys from both sides present information to a judge (and possibly a jury). Ultimately, the court will decide how much, if any, compensation you deserve.

Depending on the details of your case, litigation may drag on for a year or more. Pre-settlement funding can help you pay your bills while you’re out of work, so you don’t have to burn through all your savings or go into debt in the meantime.

Litigation Funding/Financing

Litigation funding, also known as pre-settlement funding, is a financial arrangement where a company like USClaims advances money to a plaintiff involved in a lawsuit. This funding can help the plaintiff cover medical bills and day-to-day living expenses as they wait for their case to settle. The amount the funding company provides is typically a percentage of the settlement the plaintiff expects to receive.

In return, the litigation funding provider receives a portion of the settlement if the case is successful, which repays the advance plus any interest and fees. If the case is lost, the plaintiff typically owes nothing, making litigation funding a non-recourse option.

Litigation funding is often used by individuals or businesses who may not otherwise have the resources to pursue their legal claims or wait for a fair settlement to be reached.

Loss of Consortium

A legal claim brought by the spouse or close family member of an injured plaintiff, seeking compensation for the loss of companionship, support, and intimacy resulting from the injury. Loss of consortium damages recognize that serious injuries affect not just the victim but those closest to them.

Malpractice

Professional negligence committed by a licensed professional, most commonly a doctor, attorney, or accountant, that causes harm to a client or patient. Medical malpractice cases arise when a healthcare provider fails to meet the accepted standard of care and that failure results in injury.

Mediation / Out-of-Court Settlement

Mediation is a confidential process in which a neutral third party helps the disputing parties negotiate a resolution without going to trial.

An out-of-court settlement is the agreement reached through mediation or direct negotiation, allowing both parties to resolve the case on agreed terms. Most personal injury cases are resolved this way, avoiding the time and expense of a trial.

Medical Report / Medical Treatment

A medical report is a formal document prepared by a healthcare provider that details a patient’s diagnosis, treatment, and prognosis following an injury. Medical treatment refers to the care received to address those injuries.

Both are critical in personal injury cases: thorough medical documentation supports your claim by connecting your injuries directly to the accident and establishing the extent of your damages.

Motion

A formal request submitted to a court asking a judge to take specific action, such as dismissing a case or excluding certain evidence.

Negligence

The failure to exercise the level of care that a reasonable person would under similar circumstances, resulting in harm to another party.

Negligence is the foundation of most personal injury claims and takes several forms. Negligence per se occurs when a defendant violates a law or regulation specifically designed to protect people from the type of harm that occurred, such as running a red light. Gross negligence refers to an especially reckless or willful disregard for the safety of others, which may support a claim for punitive damages beyond standard compensation.

No-Fault

A system of insurance coverage in which each party’s own insurer pays for their losses regardless of who caused the accident. No-fault laws, most commonly applied in auto accident cases, are designed to speed up compensation and reduce litigation, though they may limit a plaintiff’s ability to sue the at-fault party unless injuries meet a certain threshold of severity.

Non-Compounded Rates

Generally, when you borrow money, you must pay interest. There are two main types of interest rates: simple (non-compounded) and compounded.

With a non-compounded interest rate, the interest only applies to the initial amount borrowed, known as the principal. On the other hand, with a compounded interest rate, the interest applies to both the principal and the accrued interest. In other words, you pay interest on the interest.

Pre-settlement funding from USClaims features a non-compounded interest rate, which saves our borrowers money. Our fees are transparent, so you know exactly how much you’ll need to repay if you win your case.

Nonrecourse

Pre-settlement funding is non-recourse, which means you don’t have to repay the funds if you don’t win your case. A non-recourse lawsuit loan is a no-risk way to finance your life while you wait for your case to be decided.

Notice to Insurer

A formal notification provided to an insurance company informing them of an accident, injury, or potential claim. Insurance policies typically require prompt notice as a condition of coverage.

Pain and Suffering

A category of damages that compensates a plaintiff for the physical discomfort and emotional distress caused by an injury.

Pain and suffering are an umbrella concept that encompasses several related components:

• Mental pain and suffering, which cover anxiety, depression, and emotional trauma resulting from the injury.

• Loss of enjoyment of life, which compensates for the inability to participate in activities and experiences the plaintiff previously valued.

• Disfigurement, which addresses lasting physical changes such as scars or deformities that affect the plaintiff’s appearance and quality of life.

Permanent Disability

A long-term or lifelong impairment resulting from an injury that limits a person’s ability to work or perform daily activities. In personal injury cases, a permanent disability finding can significantly increase the value of a claim, as it accounts for future lost earnings, ongoing medical care, and the lasting impact on quality of life.

Plaintiff

There are two parties involved in a lawsuit – the plaintiff and the defendant. As the injured party that initiated the lawsuit, you’re the plaintiff. The at-fault party that you’re suing is the defendant.

If you win your case, the defendant (or the defendant’s insurance company) must pay you a court-ordered amount to compensate you for your damages. Pre-settlement funding can help you cover your medical bills and everyday expenses as you wait for your day in court.

Post-Settlement Funding

Post-settlement funding is a cash advance of a percentage of your court-ordered settlement amount. You obtain this lawsuit loan after a settlement agreement has been reached but before the money is disbursed. When your attorney receives the settlement, they’ll repay your post-settlement funder from those proceeds.

Sometimes, there’s a large time gap (potentially months) between getting a favorable decision from the court and receiving your compensation. Post-settlement funding can help you make ends meet in the interim.

Prayer for Relief

The section of a legal complaint in which the plaintiff formally states what they are asking the court to award or order. In personal injury cases, a prayer for relief typically requests monetary damages, but may also seek injunctive relief depending on the circumstances.

Pre-Settlement Funding

Pre-settlement funding is a cash advance of a portion of your anticipated settlement amount. You obtain this lawsuit loan after you file a lawsuit but before a judge decides your case. If you win, your attorney will repay your pre-settlement funder from the settlement proceeds.

Your lawsuit could take a year or more to resolve. Pre-settlement funding can help you pay your bills in the meantime.

Precedent

A prior court decision that serves as a guide or rule for deciding similar cases in the future. Courts are generally expected to follow precedent, a principle known as stare decisis, which promotes consistency and predictability in the law.

Prior Funding

Pre-settlement funding that a plaintiff has already obtained from any funding company before applying for additional funding. Prior funding is a factor in the underwriting process because it affects the total amount that will need to be repaid from a settlement, which in turn influences how much additional funding may be available.

Product Liability

A legal theory that holds manufacturers, distributors, and sellers responsible for injuries caused by defective or unsafe products. A product liability claim may arise from a design defect, a manufacturing flaw, or a failure to provide adequate warnings about the risks of using a product.

Prognosis

A medical assessment of the likely future course and outcome of a patient’s injury or condition. In personal injury cases, a prognosis helps establish the long-term impact of an injury, including anticipated ongoing treatment needs, recovery timelines, and any permanent limitations, all of which factor into the overall value of a claim.

Punitive Damages

Damages awarded in addition to compensatory damages when a defendant’s conduct is found to be especially egregious, malicious, or reckless. Unlike compensatory damages, which are designed to make the plaintiff whole, punitive damages are intended to punish the wrongdoer and deter similar conduct in the future.

Rehabilitation Benefits

Compensation for the costs associated with physical therapy, occupational therapy, vocational training, and other services aimed at helping an injured person recover and return to their prior level of functioning. Rehabilitation benefits may be included in a personal injury settlement or workers’ compensation award.

Res Ipsa Loquitur

A Latin phrase meaning “the thing speaks for itself,” used in negligence law to establish that an accident would not have occurred without someone’s negligence, even without direct proof of how it happened.

For example, if a surgical tool is found inside a patient after an operation, res ipsa loquitur may allow a jury to infer negligence without requiring the plaintiff to pinpoint exactly what went wrong.

Rolling Contracts

A funding arrangement in which a plaintiff obtains additional pre-settlement funding advances over time as their case progresses, rather than receiving one lump sum. Each advance is documented, and all advances are typically repaid together upon settlement. Rolling contracts give plaintiffs flexibility to address ongoing financial needs throughout the life of their case.

Settlement Advance

Settlement advance is another term for pre-settlement funding. A pre-settlement funder will give you a cash advance of your expected settlement amount. You can use the money for any purpose while you wait for your case to be litigated.

If you win your case, your lawyer will repay the pre-settlement funding company from the proceeds. If you lose, you don’t have to repay the cash advance.

Special Damages

Special damages, also referred to as pecuniary or out-of-pocket damages, are the economic component of compensatory damages and cover quantifiable financial losses such as medical expenses, lost wages, and property damage directly resulting from an injury.

Statute of Limitations

The legally mandated deadline by which a plaintiff must file a lawsuit. Statutes of limitations vary by state and by the type of claim. Missing the deadline typically bars the plaintiff from pursuing compensation entirely, regardless of the strength of their case.

If you have been injured, it is important to consult an attorney promptly to understand the statute of limitations that applies to your situation.

Structured Settlement

A settlement arrangement in which the plaintiff receives compensation through a series of periodic payments over time rather than a single lump sum. Structured settlements are often used in cases involving significant long-term needs, such as permanent disability.

Subpoena

A legal order requiring a person to appear in court to testify or to produce documents and other evidence. Failure to comply with a subpoena can result in legal penalties, including contempt of court.

Summons

An official notice issued by a court informing a defendant that a lawsuit has been filed against them and requiring them to respond within a specified timeframe. A summons is typically served alongside the complaint at the outset of a lawsuit.

Third-Party Claims

Claims made against a party other than the plaintiff’s own insurer. In personal injury cases, a third-party claim is typically filed against the at-fault party or their insurance company, seeking compensation for injuries and damages caused by that party’s negligence.

Tort

A civil wrong, other than a breach of contract, that causes harm to another person and gives rise to legal liability. Personal injury claims are a type of tort, and tort law governs how injured parties can seek compensation from those responsible for their harm.

Trial

A formal legal proceeding in which a judge or jury hears evidence and arguments from both sides and renders a verdict.

Underwriting

The process by which a funding company evaluates a pre-settlement funding application to assess the strength of the case and determine how much funding to offer.

Verdict

The formal decision rendered by a judge or jury at the conclusion of a trial. In a personal injury case, a verdict determines whether the defendant is liable and, if so, the amount of damages the plaintiff is entitled to receive.

Vicarious Liability

A legal doctrine that holds one party responsible for the negligent actions of another, typically based on their relationship. A common example is employer liability for the actions of an employee acting within the scope of their job duties, which is why businesses can be sued for harm caused by their workers.

Witness

A person who has firsthand knowledge of relevant facts and is called upon to provide testimony in a legal proceeding. Witnesses may include eyewitnesses to the accident, medical professionals who treated the plaintiff, or expert witnesses who provide specialized opinions.

Workers’ Compensation

A state-mandated insurance program that provides benefits to employees who are injured or become ill as a result of their job. Workers’ compensation typically covers medical expenses and a portion of lost wages.

Wrongful Death

A legal claim brought by the surviving family members or the estate of a person who died as a result of another party’s negligence or wrongful act. Wrongful death cases seek compensation for losses such as funeral expenses, lost financial support, and the surviving family’s loss of companionship.

Still Have Questions?

Legal terminology can be a lot to take in. If you want more in-depth answers to specific questions about your case or the legal process, check out our litigation funding FAQs page. You can also contact us to discuss your specific situation.

Disclaimer: Throughout this website, the term “loan” may be used for convenience to describe pre-settlement funding. However, such transactions are not loans in the legal sense. Repayment is strictly contingent upon the successful resolution of your case. If your case is unsuccessful, no repayment is required. Common terms like “lawsuit loan” are used colloquially but misrepresent the non-recourse nature of pre-settlement funding.