Floridians for Lawsuit Reform has announced concerns regarding investor-backed litigation funding, claiming it allows financiers to profit from lawsuits and increases insurance costs. The organization is urging lawmakers to revive transparency reforms after Senate Bill 1276 stalled in 2024.
According to Floridians for Lawsuit Reform’s post on X, the group warned that third-party litigation funding (TPLF) has transformed Florida’s legal system into an investment marketplace, where financiers profit at the expense of consumers. The post explains that Senate Bill 1276, introduced in 2024, sought to require disclosure of third-party funding in lawsuits to prevent secret investor influence on settlement decisions but ultimately stalled in committee. The group said that without transparency, ordinary Floridians face rising insurance premiums and reduced affordability as investor-backed lawsuits inflate claim values and prolong litigation.
According to the organization's detailed analysis published on its website, litigation funding has added an estimated $25 billion in costs to Florida’s insurance and healthcare sectors over the past five years. The report states that investors backing lawsuits often demand higher settlements to secure larger returns, pressuring insurers to raise premiums to offset mounting legal costs. It further emphasizes that these financial arrangements can encourage unnecessary litigation, drive medical malpractice premiums upward, and disproportionately burden working families and small businesses with higher coverage expenses.
Bloomberg Law reports that third-party litigation financing has grown into a $13 billion global industry, with the United States representing the largest and fastest-growing market. The report explains that such funding allows hedge funds and private equity firms to invest in lawsuits, creating financial incentives to prolong or escalate litigation to maximize investor returns. Bloomberg Law further notes that states like Florida are considering new legislation to regulate this opaque industry, following evidence that undisclosed funding deals can distort settlement outcomes and inflate costs for insurers and policyholders alike.
According to the official Floridians for Lawsuit Reform website, the organization is a nonprofit coalition dedicated to ensuring fairness, transparency, and accountability in Florida’s civil justice system. It advocates for reforms to curb excessive verdicts, prevent lawsuit abuse, and protect consumers from hidden legal costs that drive up insurance rates. The organization’s mission is "to advance policies that safeguard Florida families and businesses from the financial harm caused by exploitative litigation practices."