Indiana's New Law Sheds Light on Third-Party Litigation Funding: A Step Towards Transparency

Indiana Joins the Transparency Movement

Indiana has recently joined the ranks of states requiring disclosure of third-party litigation funding in civil lawsuits. This new legislation, signed into law by Governor Eric Holcomb on April 20, mandates that each party in a civil proceeding and each insurer that has a duty to defend a party in court be notified of any litigation funding agreement before the case begins.

Understanding Third-Party Litigation Funding

Third-party litigation funding, as defined by the U.S. Government Accountability Office, is an arrangement where a funder who is not a party to the lawsuit agrees to fund it. This practice has seen significant growth, with global multi-billion-dollar investing firms making it their primary business. According to Swiss Re, more than half of the $17 billion invested into litigation funding globally in 2020 was deployed in the United States, with an estimated market size of $30 billion by 2028.

The Impact and Future of Litigation Funding

The lack of transparency in litigation funding has raised concerns about its impact on the judicial process and insurance affordability. While several states have taken steps to increase transparency, more comprehensive regulation is needed. For readers, it's crucial to stay informed about these developments and consider the potential implications for their own legal and insurance needs.