Floridians for Lawsuit Reform (FLR) has announced concerns over third-party litigation funding (TPLF), suggesting it could significantly increase insurance costs. According to the group, experts warn that TPLF might add $50 billion to insurance expenses over five years as investor profit-sharing inflates claims and delays cases. FLR urges stronger safeguards to protect consumers.
According to a news post by FLR, TPLF allows outside investors to finance lawsuits in exchange for a portion of settlements. Experts say this can lead to inflated demands and prolonged case resolutions. The organization emphasizes that these legal frictions ultimately result in higher everyday costs for consumers, including increased insurance premiums. While federal policymakers have considered disclosure requirements, many legal observers argue these measures alone will not mitigate the incentives driving profit-oriented litigation strategies.
Insurance Business, citing an Ernst & Young actuarial analysis, reports that TPLF could impose up to $50 billion in additional costs on the U.S. insurance sector over five years—roughly a 4%–5.2% impact on annual loss ratios—due to increased settlement values and extended case durations. EY’s experts describe the projected impact as “very significant,” highlighting opacity and portfolio-style funding as systemic drivers of cost escalation that insurers would need to incorporate into premiums. The article concludes that without policy intervention, the cost burden will fall on policyholders through higher rates and businesses via increased risk costs.
The U.S. Government Accountability Office states that third-party funding markets remain largely opaque, complicating oversight and risk assessment due to difficulties in determining the prevalence and terms of funding in specific cases, particularly patent litigation. Reuters reports that federal lawmakers have proposed the Litigation Transparency Act to require disclosure of TPLF arrangements in civil cases, reflecting bipartisan concern over hidden financial interests. Materials from Representative Darrell Issa’s office and the U.S. Chamber’s Institute for Legal Reform indicate stakeholders are pressing for standardized disclosures nationwide while acknowledging transparency alone may not resolve incentives distorting litigation behavior.
According to its official website, Floridians for Lawsuit Reform is a statewide advocacy organization educating the public about lawsuit abuse and supporting policies aimed at improving Florida’s civil justice climate. FLR aggregates research, news, and commentary linking litigation trends to consumer costs, insurance availability, and economic competitiveness while amplifying perspectives from experts and policymakers. The group’s mission emphasizes preserving reforms it argues protect households and small businesses from rising costs associated with excessive and opaque litigation practices.
