A report variety of payments focusing on third-party litigation funding are into consideration throughout america, with Georgia and Kansas already passing disclosure measures, in line with an evaluation by Insurance coverage Insider.
The U.S. Authorities Accountability Workplace defines third-party litigation funding as “an association through which a funder who just isn’t a celebration to the lawsuit agrees to assist fund it.” International multi-billion-dollar investing companies have made it their sole or main enterprise and are experiencing sturdy development. As a result of the market lacks transparency, estimates on its dimension can range however, in line with Swiss Re, greater than half of the $17 billion invested into litigation funding globally in 2020 was deployed in america. Swiss Re estimates the market shall be as excessive as $30 billion by 2028.
In the meantime, affordability of insurance coverage protection – particularly for business auto merchandise – has come underneath risk from will increase in litigation and declare prices. The nationwide surge in laws in search of to rein on this observe displays rising considerations about its lack of transparency and undue affect of litigation financing by dark-money buyers – a lot of them outdoors america.
Thirty-five separate payments have been launched in U.S. statehouses up to now this 12 months. The Kansas invoice was signed into legislation by Gov. Laura Kelly, and the Georgia invoice is anticipated to be signed by Gov. Brian Kemp. Related laws is advancing via varied committees in Arizona, California, Massachusetts, New Jersey, and Oklahoma and have been proposed in additional than two dozen different states.
The efforts should not solely progressing on the state degree. The U.S. Home of Representatives is advancing HR 1109 – The Litigation Transparency Act of 2025 – which might regulate third-party litigation funding in federal courtroom circumstances. The same invoice was launched in 2024 however didn’t advance out of committee.
Third-party litigation funding is only one facet of the bigger problem of authorized system abuse that contributes to challenges associated to property/casualty insurance coverage availability and affordability.
Study Extra:
Indiana Joins March Towards Disclosure of Third-Occasion Litigation Funding Offers
U.S. Research of Third-Occasion Litigation Funding Cites Market Progress and Scarce Transparency
IRC Research: Public Perceives Affect of Litigation on Auto Insurance coverage Claims
Florida Payments Would Reverse Progress on Expensive Authorized System Abuse
Georgia Targets Authorized System Abuse
Louisiana Reforms: Progress, However Extra Is Wanted to Stem Authorized System Abuse