RIMS, the Risk Management Society, has issued a call for increased transparency and legislative measures to address the influence of third-party litigation funding, particularly by foreign entities. This appeal was made in a statement released on its website on January 23.

According to its website, RIMS said that "it is well-documented that nuclear verdicts continue to have a detrimental impact on businesses nationwide," elevating legal risk as a priority for many organizations. The society urged Congressional leaders to act against foreign entities "financially backing civil litigation in exchange for a share of the settlement or judgment."

The Institute for Legal Reform (ILR) describes third-party litigation funding (TPLF) as a practice where external funders, such as hedge funds or financial institutions, provide financial support to plaintiffs or law firms. In return, these funders receive a percentage of any settlement or judgment.

Insurance Business reports that TPLF contributes to rising auto insurance costs by supporting lawsuits seeking higher settlements. This has led to an 11% increase in average auto premiums over the past year. The practice increases legal expenses for insurers, prompting them to raise premiums to cover escalating payouts. Consequently, consumers face higher rates, especially in states like Florida and Louisiana, where litigation abuse is most prevalent.

According to its website, RIMS was founded in 1950 and supports over 200,000 risk professionals across more than 75 countries through education, certification, advocacy, and events such as RISKWORLD, the largest global risk management conference.