2025 Legislative efforts to reform legal system underway

While manipulation of the legal system is not new, it has grown exponentially in recent years, influencing outcomes of lawsuits and playing a hefty role in jury awards of $10 million or more. A myriad of plaintiffs’ tactics and third-party litigation funding are among the factors that can lead to these ‘nuclear verdicts.’

The U.S. Chamber of Commerce's Institute for Legal Reform estimates that in 2022, the tort system cost the U.S. economy $529 billion, and over $4,200 per U.S. household. 

Tort cases arise in personal injury, wrongful death or civil cases when one party a – plaintiff – seeks remedies for harm caused by another party’s – a defendant’s – harmful act, whether intentional or unintentional.  And it’s the abuse of the tort system that is having such a major impact on businesses, due to the significant role it can play in increasing claims and litigation costs.

"The current litigation environment is costing consumers,” said Deirdre Manna, Head of Government & Regulatory Relations for Zurich North America. “By flooding our courts with litigation and using tactics designed to inflate damages, legal system abuse threatens businesses big and small, hurts our economy and increases costs for everyday people.”

Zurich's Commitment to Combatting Legal System Abuse

Zurich is committed to finding solutions to legal system abuse and is a founding member of the legal system abuse coalition. 

In the past few years, this growing multi-industry coalition of insurers, brokers, businesses and trade and civil justice associations has spearheaded education and advocacy efforts to change the mindset and perspective of policymakers. These efforts are designed to create a fair and balanced legal system and educate stakeholders on the impact on the various plaintiffs’ attorney trial tactics that manipulate the system. And in 2025, this effort is just getting stronger.   

“Legal and legislative efforts to reform the litigation environment have a dedicated focus, one step at a time and state-by-state,” Manna added. 

Legislative Focus and Advocacy Efforts in 2025

Priority issues across the country in 2025 are disclosure of third-party litigation funding (TPLF), prevention of new causes of action, phantom damages, attorney advertising, and defending against liability expansions. TPLF, for example, has become an overreaching problem. One of the most sought-after pieces of legislation at the state level, as well as federally, requires disclosure of the existence of a third-party funder and access to the funding agreement.

Common to all issues, advocacy requires proactive and defensive action,” Manna added.

Top priority states for the 2025 legislative session include Georgia, Louisiana, Texas, South Carolina, and Alabama. In Georgia, the Governor, Lt. Governor and Insurance Commissioner have introduced their legislative package and are urging the General Assembly to enact the reforms it contains including jury anchoring and third-party litigation funding.

In Louisiana, the Insurance Commissioner is touting the need for additional reforms to include an amendment to the collateral source rule on dealing with damages. Third-party litigation funding is a key effort in Texas, along with the curtailment of attorney advertising and phantom damages. South Carolina will look to reform the ‘joint and several’ liability law. Alabama is an opportunity state, and a priority for TPLF, attorney advertising and phantom damage legislation to be advanced.

Coalition building continues to be an important part of state reform efforts. Other focus areas include efforts to curb jury anchoring in Missouri and preventing an expansion of damages caps in Maryland. 

Defensively, the industry will continue to guard against new causes of action introduced by the trial bar in both Colorado and Virginia and defend 2023 reforms that occurred in Florida.

Reformation requires advocacy and action, and both require individual voices to come together to share in the development of a message and a coherent strategy, a focus and dedication to what is often a multi-year effort and a commitment to involvement.  

Across the country, coalition organizations have been advocating for reform for years. American Tort Reform Association (ATRA), the U.S. Chamber of Commerce Institute for Legal Reform (ILR) and American Property and Casualty Insurance Association (APCIA) continue to be key leaders in the effort.

“It’s a very ambitious and complicated legislative strategy,” Manna added. “But the coalition has grown tremendously. Every major insurance carrier is involved. All the major corporate Fortune 100 companies are either aware of it, are working on it, or have joined.”

In the months ahead, stakeholders will be watching the dynamics play out in statehouses across the country as legislation is introduced, debated and decided. One thing for certain, whatever the outcomes, they will have significant impacts.