A file variety of payments concentrating on third-party litigation funding are into account throughout the USA, with Georgia and Kansas already passing disclosure measures, based on an evaluation by Insurance coverage Insider.
The U.S. Authorities Accountability Workplace defines third-party litigation funding as “an association during which a funder who just isn’t a celebration to the lawsuit agrees to assist fund it.” World multi-billion-dollar investing companies have made it their sole or major enterprise and are experiencing sturdy progress. As a result of the market lacks transparency, estimates on its dimension can range however, based on Swiss Re, greater than half of the $17 billion invested into litigation funding globally in 2020 was deployed in the USA. Swiss Re estimates the market might be as excessive as $30 billion by 2028.
In the meantime, affordability of insurance coverage protection – particularly for business auto merchandise – has come below menace from will increase in litigation and declare prices. The nationwide surge in laws in search of to rein on this follow displays rising considerations about its lack of transparency and undue affect of litigation financing by dark-money traders – lots of them outdoors the USA.
Thirty-five separate payments have been launched in U.S. statehouses thus far this yr. The Kansas invoice was signed into legislation by Gov. Laura Kelly, and the Georgia invoice is predicted to be signed by Gov. Brian Kemp. Comparable laws is advancing by way of varied committees in Arizona, California, Massachusetts, New Jersey, and Oklahoma and have been proposed in additional than two dozen different states.
The efforts aren’t 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 court docket instances. 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 problem 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
Louisiana Litigation Funding Reform Vetoed; AOB Ban, Insurer Incentive Enhance Make It Into Legislation
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 Pricey Authorized System Abuse
Georgia Targets Authorized System Abuse
Louisiana Reforms: Progress, However Extra Is Wanted to Stem Authorized System Abuse
