View this article online: https://www.claimsjournal.com/news/national/2024/03/05/322338.htm

Insurer Group, Reinsurer Call for U.S. Legal System Reforms Armed with Survey

An insurer group and a reinsurer are calling for reforms to the U.S. legal system armed with a survey they conducted that shows a majority of Americans are unaware of the impact that plaintiff attorney “tactics” like predatory advertising and the use of third-party litigation funding have on their household.

The American Property Casualty Insurance Association and Munich Reinsurance America Inc. released results from an online survey conducted by The Harris Poll among more than 2,000 U.S. adults from Jan. 11 to 16 among adults ages 18 and older.

The results of the survey include:

• 65% are not aware every household pays an estimated “tort tax” that is an average of $3,621 per American household annually. The “tort tax” impacts consumers through the costs for everyday items like groceries and gasoline.
• 59% do not know that third parties, like hedge funds or foreign entities, often finance litigation in exchange for a share of the jury award or settlement as a return on their investment.
• 47% are not aware a plaintiff lawyer in a civil lawsuit is likely to receive most of the jury award or settlement.
• 88% believe there should be full transparency and disclosure of all who have a financial stake in a civil lawsuit.
• 86% agree state and federal lawmakers should address abuses of the legal system, such as undisclosed third party funding and plaintiff lawyer advertising.

A 2021 study from the Perryman Group shows the impact on the U.S. economy from legal system abuse results includes the loss of 4.24 million jobs, $429.35 billion in output and more than $110 billion in government revenues.

“Legal system abuse is rampant and plaintiff lawyers’ use of predatory advertising tactics and third-party litigation funding have turned the U.S. legal system into an investment market, benefiting secret funders rather than the victim,” Stef Zielezienski, executive vice president and chief legal officer of APCIA, stated. “The survey results are clear – the majority of Americans agree state and federal lawmakers need to address these abuses of the legal system. Common-sense reforms, including full transparency and disclosure of all parties with an interest in the outcome of civil litigation, are needed to restore balance to the civil justice system.”