The Growth Of Litigation Funding And Its Potential Effects On Commercial Auto Insurance

It started in Australia, made its way to Europe, and has been growing in the United States. In fact, litigation funding has grown 414 percent in this country from 2013 to 2017, according to a 2017 report by Burford Capital.

It’s now a multi-billion-dollar business.

Generally, in litigation funding, third-party investors provide funds to plaintiffs to pursue lawsuits against large companies, oftentimes insurers. It’s become a hot emerging issue and can significantly impact the insurance industry.

This is especially prevalent in commercial auto insurance, where the use of litigation funding could be helping to drive up claim severity, according to an article last year in Carrier Management.