The American Property Casualty Insurance Association (APCIA) has issued a statement in support of the Protecting Third Party Litigation Funding From Abuse Act, a bill introduced by Rep. Darrell Issa (R-CA).
The House Judiciary Committee is scheduled to hold a full committee markup on the legislation later this week.
The bill seeks to establish disclosure requirements for contractual funding arrangements between third-party financiers and plaintiffs' attorneys. Proponents argue that undisclosed litigation funding can increase costs and reduce transparency in court proceedings.
Sam Whitfield (pictured above), APCIA's senior vice president of federal government relations and political engagement, said the trade group views the legislation as a step toward greater clarity in the legal system.
"This legislation is a positive step forward to ensure that all parties that have contractual funding arrangements with plaintiffs' attorneys are visible to the court," Whitfield said. "Undisclosed third party litigation funding can inflate costs and shrouds court proceedings in secrecy, eroding confidence in the civil justice system."
Whitfield added that APCIA intends to continue working with Issa and other stakeholders as the bill progresses.
"We will continue working with Representative Issa, the bill's sponsors, and other stakeholders as the legislation evolves to ensure it delivers disclosure requirements for parties who engage in for profit investing though our courts," he said.
The federal push comes as state legislatures also examine litigation funding practices. In Florida, Rep. Fabian Basabe (R-District 106) introduced House Bill 1157, which would impose restrictions on litigation financing agreements and require courts to assess whether such arrangements could affect legal counsel's ability to represent parties in lawsuits.
The Florida bill follows an earlier attempt to regulate third-party litigation financing in the state. A prior measure, H.B. 1179 and S.B. 1276, which contained similar provisions, stalled in the state House during a previous session.
Third-party litigation funding has drawn increased attention from insurers and industry groups, who contend that undisclosed financing arrangements can contribute to larger settlements and verdicts. Supporters of litigation funding argue that it provides access to the legal system for plaintiffs who might otherwise lack resources to pursue claims.
