On Oct. 7, the chairman of the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet, Rep. Darrell Issa (R-California), and Rep. Scott Fitzgerald (R-Wisconsin) introduced H.R. 9922, the “Litigation Transparency Act of 2024" into the U.S. House of Representatives, which would require the disclosure of parties receiving payment in civil lawsuits. 

Specifically, the legislation would require the disclosure of investors who have a right to receive payment based on the outcome of a case, as well as the disclosure of the financing agreement between investors and plaintiffs.

Many factors are fueling the current property insurance crisis. Among them is the abuse of the legal system. It is a significant problem and adds considerable costs to the insurance industry and the price that consumers pay for property insurance. While consumers are feeling the pinch on premiums in the hard market, third-party litigation financiers are generating significant financial returns from the American legal system. 

Third-party litigation funding (TPLF) involves a third party providing funding to a plaintiff in exchange for a share of any financial recovery from a lawsuit. Proponents argue that it can help plaintiffs pursue legal action when they might otherwise lack financial resources. Opponents argue that TPLF contributes to higher awards, longer cases and greater legal expenses. 

The insurance industry is united on Capitol Hill and strongly supports reforms to require disclosure of TPLF to all parties and the courts. The Big “I" and other industry trade associations along with insurance carriers have had numerous discussions with members of Congress and their staff expressing concerns over TPLF. 

The Big “I" will continue to advocate for litigation reform, particularly more transparency from those funding litigation, while advocating for independent insurance agents. Look out for updates in the News & Views e-newsletter. 

Raaed Haddad is Big “I" director of federal government affairs.