Working For Commonsense Reforms to Restore Fairness, Transparency, and Balance to the Legal System.
The Rising Cost of Legal System Abuse
America’s legal system is meant to deliver justice, not windfalls for hedge funds, political activists, or opportunistic trial lawyers. But today, that system is being misused and manipulated, driving up the cost of insurance for families and businesses alike. Consumers are paying the price for a civil justice system increasingly fueled by litigation finance, deceptive advertising, and outsized jury awards.
The American Insurance Competitiveness Coalition (AICC) is advocating for commonsense reforms to restore fairness, transparency, and balance to the legal system. Affordable insurance depends on it.
When Lawsuits Are Weaponized, Consumers Pay the Price
It’s Time to Reform Legal System Abuse
Crucial reforms are needed to reduce costs for policyholders, improve insurance availability, and restore trust in the legal process. Key issues that demand urgent attention include:
Hidden Third-Party Litigation Funding (TPLF)
An unregulated, multi-billion-dollar industry allows hedge funds and foreign entities to secretly fund lawsuits in exchange for a cut of the winnings, often leaving the actual plaintiffs with little. These financiers operate outside usury laws, charge sky-high “interest,” and walk away with untaxed profits.
Sen. Thom Tillis’ Tackling Predatory Litigation Funding Act would close a key loophole, ensuring those who profit from lawsuits pay taxes like everyone else; and reducing the dark money fueling political and activist causes through litigation.
TPLF: A National Security Risk
Foreign adversaries can fund lawsuits and gain access to sensitive corporate information—all without disclosure or oversight. A 2022 report by the U.S. Chamber of Commerce outlined how sovereign wealth funds could weaponize our courts against American companies.
“Nuclear Verdicts” and Runaway Damages
Jury awards in the tens or hundreds of millions, fueled by inflated noneconomic damages and exaggerated medical costs, are becoming the norm, not the exception. These outsized verdicts distort the market, raise premiums, and undermine predictability for everyone.
Medical Financing & Fraud Schemes
Third-party medical financing arrangements and rampant insurance fraud are inflating costs and exploiting the legal process. These practices pad claim values, skew jury outcomes, and burden honest policyholders with higher rates.
Deceptive Legal Advertising
Trial lawyer ads now outspend most major consumer brands ($2.5 billion in 2023 alone) flooding the airwaves with promises of jackpot justice. These ads mislead consumers, drive unnecessary litigation, and normalize excessive payouts.
The Public Wants Action
71%
of voters support restrictions on attorney advertising.
67%
believe lawmakers should act to curb misleading legal ads.
68%
say ads promoting massive jury awards desensitize the public
Florida Is Leading The Way: Other States Should Follow
Florida’s comprehensive tort reforms under Governor DeSantis have shown that legal reform works.
Insurers, policyholders, and taxpayers are all benefitting. It’s time for other states to adopt similar reforms to protect consumers and preserve the integrity of our civil justice system.
Our Policy Recommendations
To fix what’s broken, we must act on several fronts:
Require transparency in third-party litigation funding
Implement reasonable caps on noneconomic damages
Crack down on deceptive legal advertising
Promote alternative dispute resolution to reduce costly court battles
Strengthen oversight of medical financing and prevent fraud
Ensure tax fairness for those profiting from litigation