Gary LaBranche, CEO of the Risk Management Society (RIMS), expressed concerns about third-party litigation funding (TPLF) and its implications for legality and national security. He made these remarks during an episode of the RIMScast podcast on January 14.
In the podcast, LaBranche said that nuclear verdicts, which are awards exceeding $10 million, contribute to rising insurance premiums and business costs. He also voiced concerns regarding TPLF, emphasizing that the lack of transparency in funding sources could allow illegal or foreign entities to manipulate the U.S. legal system for excessive payouts.
TPLF involves a third party financing a plaintiff's legal case in exchange for a portion of the settlement or award if successful. While this model addresses increasing litigation costs and complexities and enhances access to justice, it has raised concerns about potential conflicts of interest and misuse in encouraging frivolous lawsuits, as noted by Baker Botts.
According to Insurance Business, TPLF contributes to higher auto insurance costs by funding lawsuits that increase settlements, resulting in an 11% rise in premiums over the past year. Insurers pass these higher legal expenses onto consumers, with states like Florida and Louisiana being most affected by litigation abuse.
According to his LinkedIn profile, Gary LaBranche is the CEO of RIMS with over 40 years of association leadership experience. He is a recipient of multiple prestigious awards, author of more than 300 articles, and a graduate of The Ohio State University.