Concerns Over Rising Costs in America
Americans are feeling the pressure of increasing prices, a sentiment that resonated throughout the November 2025 elections. Affordability became a main topic in discussions, polls, and even speeches. For Republicans to regain voter confidence, addressing a lesser-known contributor to these high costs—the growing litigation finance industry—could be crucial.
There’s a bill currently before Congress that aims to tackle this issue.
In third-party litigation funding, outside investors finance legal battles in exchange for a share of the winnings. With substantial backing from wealthy investors, trial lawyers can pursue cases in court, reject fair settlements, or demand exorbitant amounts from juries. This has led to a surge in “nuclear verdicts,” where awards exceed $10 million.
The U.S. Chamber of Commerce reports that from 2013 to 2022, nuclear judgments over $10 million rose by 28%, over $20 million by 45%, and remarkably, those over $100 million surged by a staggering 400%. These massive judgments ultimately impact consumers, resulting in higher prices for various goods and services, from groceries to insurance.
Take trucking, for instance. A study analyzing tractor-trailer tort cases from 2013 to 2022 revealed that the median nuclear verdict in 2022 reached $36 million, a 50% increase from 2013. This sharp rise contributes to soaring insurance costs. Interestingly, truck accidents have decreased in recent years, yet trucking liability premiums have gone up by 36% per mile over the last eight years.
These inflated costs trickle down to consumers across all sectors, affecting everyone from retailers to healthcare providers, and beyond. As litigation funding becomes more prevalent, the legal process stretches on, becoming increasingly aggressive and expensive. Strikingly, consumers are the ones left to bear these costs.
Meanwhile, foreign litigation funds are profiting immensely while not paying a dime in taxes on their earnings in the U.S. They categorize third-party litigation funding as a “passive investment,” essentially receiving a subsidy from American taxpayers, all while benefiting from the struggles of everyday citizens.
On the other hand, American plaintiffs and their attorneys, the ones pursuing these cases, face tax rates of up to 37%.
This situation is concerning. It’s essentially a bailout for wealthy foreign investors, to the detriment of American workers and taxpayers.
Unfortunately, efforts to eliminate this inequity and ensure that all parties contribute their fair share have encountered obstacles. Some conservative activists, who claim that this legislation could inhibit lawsuits by “woke corporations,” have pushed back against these changes.
This argument seems off base. These litigation funders shouldn’t have benefitted from taxpayer subsidies in the first place, irrespective of the lawsuits’ merits. The ability to bring forth litigation, especially for ideological reasons, isn’t impacted. It’s absurd that individuals and small businesses strive to thrive while footing the highest ordinary income tax rates, while litigation funders do not face the same burden.
The question arises: why are some conservative activists defending foreign litigation funders who exploit our legal system? Shouldn’t the focus be on reducing costs for American families? The conservative legal movement has valid concerns about corporate and government misconduct, but the existing litigation model is flawed and allows millions to flow to foreign entities at the expense of hardworking Americans.
The economic stakes are undeniably high. If Republicans are serious about addressing affordability, they must confront the litigation pressures that drive up costs, deter investment, and challenge small businesses. Tax reforms should aim to eliminate offshore subsidies, bring fairness back to the system, and lower costs for American consumers. Affordability will clearly play a significant role in future elections, and now is the crucial moment for action.
