American Trucking Associations (ATA) recently issued a statement supporting Montana Gov. Greg Gianforte signing into law legislation that reforms lawsuit financing.
The law requires lawsuit lenders register and makes judges, juries, and defendants aware when a third party is financing the litigation.
Third-party litigation financing is when a funder who is not a party to the lawsuit agrees to help fund it. They are usually private firms operating large investment portfolios that expect a payout if the suit is successful. The practice puts pressure on plaintiffs to seek outsized verdicts in order for lenders to receive a return on their investment.
“When third-party financiers profit from the justice system, it drives up the cost of litigation for everyone and reduces the efficiency of the process,” Duane Williams, Montana Trucking Association executive director, said. “This law will help prevent predatory lawsuits that hinder our industry’s ability to serve our state and economy safely and efficiently.”
“This common-sense measure will bring lawsuit lenders out from the shadows and make the fact finders aware that a disinterested third party has a financial stake in any verdict,” ATA President and CEO Chris Spear said.
Florida and Iowa have enacted similar legislation.
ATA’s more than 37,000 members represent the American trucking industry.