Lawmakers are being urged to advance disclosure rules for third-party litigation funding after a joint analysis by the National Insurance Crime Bureau (NICB) and 4WARN reported that 74% of 783 insurance companies reviewed from June through August 2025 were targeted by litigation-related marketing campaigns linked to outside funders.
Federal proposals aimed at increasing visibility into funding arrangements have gained renewed attention as the assessment’s findings circulate. The Protecting Our Courts from Foreign Manipulation Act passed the House Judiciary Committee in a 15–11 partisan vote, while the Litigation Transparency Act was scheduled for committee consideration the same week but did not receive a vote during that markup session.
POCFMA would bar foreign states and sovereign wealth funds from acting as funders and require disclosure in federal court, while the LTA focuses on disclosure for all funders, foreign or domestic.
NICB and 4WARN said digital tactics used to attract potential claimants included search engine diversion, cloned portals, misleading domains, and AI-generated content. Of the companies assessed, 585 were targeted. The review also noted that a single funder supported 13 law firms that pursued claims involving 66 insurers, illustrating how coordinated campaigns can increase litigation volume.
TPLF involves outside investors providing financial backing to claimants or law firms in exchange for a share of settlements. The organizations said this support can influence case selection, litigation strategy, and settlement posture. NICB referenced its involvement in the United States v. Constantine case, a $31 million trip-and-fall fraud operation that relied on litigation funding to support staged claims involving vulnerable individuals. The report also described networks of lawyers, medical providers, runners, and digital marketers coordinating activity across multiple claims.
Industry groups have pointed to the financial impact of litigation funding on consumers. The American Property Casualty Insurance Association cited an analysis by the Perryman Group estimating that excess tort costs impose an annual economic burden of nearly $368 billion and add approximately $2,437 in yearly expenses for the average US household.
States have taken similar steps toward transparency, with Georgia, Arizona, Maryland, New Hampshire, and Ohio advancing or proposing measures requiring registration, disclosure, or limits on funder involvement, according to publicly reported legislative actions.
NICB president and CEO David J. Glawe said outside funding has had a larger influence on insurance-related litigation than previously understood. Todd Kozikowski, CEO of 4WARN, said digital campaigns backed by funders continue to initiate questionable lawsuits.
The assessment calls for further transparency reforms at the state and federal levels and encourages insurers to monitor digital activity, examine patterns in opportunistic litigation, support disclosure measures, and report suspected fraud to 1-800-TEL-NICB.
