Americans are desperate for relief from rising prices. The November 2025 elections made that clear, as “affordability” dominated every focus group, every poll, and every concession speech. If Republicans plan to regain voter trust, they need to address one of the most under-recognized drivers of higher costs: the exploding litigation finance industry.
Fortunately, a bill pending in Congress was created to tackle this.
Third-party litigation funding allows outside investors to bankroll lawsuits in exchange for a share of the payout. With deep-pocketed funders behind them, trial lawyers can push cases to court, reject reasonable settlements, and demand huge jury awards. The result has been a sharp rise in so-called “nuclear verdicts” — awards exceeding $10 million.
Third-party litigation funding (TPLF) has become a multibillion-dollar engine powering these types of verdicts, which have skyrocketed in the past decade.
According to the U.S. Chamber of Commerce’s Institute for Legal Reform, from 2013 through 2022, the number of nuclear verdicts over $10 million was up 28%, over $20 million was up 45%, over $50 million was up 120% and, shockingly, over $100 million or more was up 400%. And, as usual, the cost of those astronomical judgments is passed onto consumers in the form of rising prices on everything from groceries to insurance.
Take trucking, for example. An American Transportation Research Institute analysis of trucking litigation between 2013 and 2022 found that the median nuclear verdict in tractor-trailer tort cases reached $36 million in 2022—approximately 50% higher than the median nuclear verdict in 2013. That, in turn, has led to skyrocketing insurance premiums. Trucking auto liability premiums rose by 36% per mile in the past eight years, even as truck crashes declined in the past four years.
Those costs are passed on to consumers across the entire U.S. economy through businesses small and large, from retailers and doctors to the hospitality, energy, and agricultural sectors. As litigation financiers pump capital into the legal system, lawsuits become longer, more aggressive, and more expensive. Costs spike. Consumers pay.
Meanwhile, foreign-owned, multi-billion-dollar litigation funds reap the windfall…all while paying zero tax on their U.S. profits. That’s right: because they claim that TPLF is a “passive investment,” offshore funds receive a de facto subsidy from U.S. taxpayers to raid the American public’s wealth while simultaneously raising costs for families.
At the same time, American plaintiffs and their lawyers who actually fight these cases pay taxes at rates up to 37%.
Let’s call this out for what it is. It’s a giveaway to wealthy foreign speculators at the expense of American workers and taxpayers.
Unfortunately, a legislative proposal that would end this unfair subsidy and make sure everyone pays their fair share has stalled against opposition from a small handful of conservative activists who falsely claim it would prevent them from suing so-called “woke corporations.”
Nonsense. Litigation funders should have never been subsidized by American taxpayers in the first place, irrespective of how meritorious their lawsuits may or may not be. It would not in any way impact the ability to file a lawsuit, especially one based on ideological principles. Many individuals and small businesses have to learn to survive and thrive while paying the top ordinary income tax rate – litigation funders can too.
The question is this: Why is this small handful of conservative activists fighting to protect foreign litigation financiers who are exploiting our legal system and our tax code when they should be fighting to lower costs for American families? The conservative legal movement has every right to challenge corporate and government misconduct. But it doesn’t need to preserve a broken litigation model that hands foreign litigation funds hundreds of millions of dollars on the backs of hardworking Americans.
The economic stakes could not be clearer. If Republicans want to address affordability, they must tackle the litigation pressures that inflate premiums, discourage investment, and burden small businesses. Tax reforms that end offshore subsidies, restore fairness to the system, and lower costs for American consumers are a necessary – and relatively simple – first step. With affordability sure to be a critical factor in this year’s mid-terms, the time to act is now.
Lynn Westmoreland is a former member of Congress who served on the Financial Services Committee.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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