Plus, the head of this online electronic investment platform recommends that only personal-injury lawyers, or investors who have such lawyers helping them evaluate cases, plunk down their money at this early stage.

PlaintiffsNeed to pay rent, they need to buy food,” says Mighty board member Roger Ehrenberg of IA Ventures, one of ten investors that last September pumped $5.25 million into Mighty.

Is lending to plaintiffs at high rates really doing them a service? Schwadron answers that Mighty does its best for plaintiffs by running an electronic Dutch auction, where the bidder who is willing to accept the lowest rate wins thedeal, which Mighty refers to as an investment, not a loan.

The Colorado Supreme Court ruled last November that lawsuit loans must comply with the state’s consumer lending laws, potentially limiting returns.

In one Pennsylvania case, Oasis Legal Finance, a Chicago lender, extended $60,000 to an injured worker only to find out he’d borrowed $67,500 from five other companies against the same case, with all six loans ballooning to more than $400,000 with interest, barely payable after subtracting fees from his $600,000 settlement.

Los Angeles-based Vinson Litigation Finance, launched in 2012, uses the predictive software of Donald Vinson, a pioneer in the technique of jury research, to handicap commercial cases for investment.

Those include a $25 million investment that returned $61 million last year, fora $36 million profit.