Litigation Funding Tied to Abusive Lawsuits?

Litigation Funding Tied to Abusive Lawsuits?

October 27, 2022

It is becoming evident that the recent surge in court cases in Florida is from lawsuit financing that is becoming increasingly popular. Also known as "litigation funding," this practice allows litigants to receive an advance on their expected settlement or jury award. In theory, this can be a helpful way for cash-strapped individuals to access the resources they need to pursue a legitimate legal claim.

However, there is growing concern that lawsuit funding is contributing to an increase in frivolous litigation and abusive lawsuits.

Because lending companies are typically only paid if the litigant prevails, they have a strong financial incentive to encourage claims until some kind of positive settlement is reached, often prolonging cases.

This, in turn, clogs up the court system. And, because insurance companies are the ones who typically pay the settlements, this drives up the cost of insurance for everyone. In some ways, you can think of this added cost as a type of inflation or tax on everyday consumers.

Some lawmakers are now calling for regulations on the lawsuit funding industry, in order to protect consumers and bring down the number of frivolous lawsuits. Whether or not such regulations are enacted, it is clear that lawsuit financing is having a major impact on the legal landscape in Florida.

The question now is will lawmakers step up and do their job. Let’s hope the answer is yes.

Charles Johnson

1501 Shepherd Rd. #99

Lakeland, Florida  33811

(561) 989-4951

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Opinions are published by some Floridian reporters and lawmakers, and political pundits, and operatives

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