A report variety of payments focusing on third-party litigation funding are into account throughout the US, with Georgia and Kansas already passing disclosure measures, in keeping 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 will not be a celebration to the lawsuit agrees to assist fund it.” International multi-billion-dollar investing corporations have made it their sole or major enterprise and are experiencing robust development. As a result of the market lacks transparency, estimates on its measurement can differ however, in keeping with Swiss Re, greater than half of the $17 billion invested into litigation funding globally in 2020 was deployed in the US. Swiss Re estimates the market will likely be as excessive as $30 billion by 2028.
In the meantime, affordability of insurance coverage protection – particularly for business auto merchandise – has come underneath menace from will increase in litigation and declare prices. The nationwide surge in laws in search of to rein on this apply displays rising issues about its lack of transparency and undue affect of litigation financing by dark-money buyers – lots of them outdoors the US.
Thirty-five separate payments have been launched in U.S. statehouses to this point this yr. The Kansas invoice was signed into regulation by Gov. Laura Kelly, and the Georgia invoice is anticipated to be signed by Gov. Brian Kemp. Related laws is advancing by 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 stage. 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 court docket circumstances. An identical invoice was launched in 2024 however didn’t advance out of committee.
Third-party litigation funding is only one facet of the bigger difficulty of authorized system abuse that contributes to challenges associated to property/casualty insurance coverage availability and affordability.
Be taught 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
