NAMIC Commends Passage of Indiana Litigation Funding Transparency Law

The National Association of Mutual Insurance Companies commends Indiana Gov. Eric Holcomb and Rep. Matt Lehman for successfully passing a new law requiring litigation funding transparency. This collaborative effort between businesses and policymakers is a significant first step toward reducing legal system abuse by enforcing open and honest disclosure of funding agreements.

“As a lifelong Hoosier, I’m pleased to see Indiana has taken a leadership role on this critical issue of transparency in the legal process,” said Neil Alldredge, president and CEO of NAMIC. “Litigation funding is a multi-billion dollar industry that for years has driven up the length and cost of civil cases. While there is much more that needs to be done to address this issue, this law represents important progress.”

Lehman sponsored the original bill, HB 1124, to require consumer claimants to disclose any agreements made for advance payments, or third-party litigation funds, in advance of a court proceeding. It further makes the written notice not admissible as evidence.

“Exposing this type of contractual relationship prior to a civil proceeding is a positive step toward closing the gap on social inflation,” Alldredge said. “It will help thwart opportunistic investors from promoting return on investment over client interests and siphoning value from clients away from policyholders, claimants, and insurers. NAMIC believes the Indiana law is a strong beginning in addressing the many issues raised by litigation funding and hopes it and other reforms are considered elsewhere.”

Article Posted: 04.25.23
Last Updated: 04.25.23