Third-party litigation funding is changing the economics of every commercial liability claim above a certain threshold.
When institutional investors fund plaintiff litigation in exchange for a share of the settlement, the plaintiff's willingness to hold out for a larger award increases dramatically. Defendants -- and their insurers -- face an adversary with effectively unlimited resources and no urgency to settle at traditional values.
The downstream impact on commercial general liability, commercial auto, and excess lines is measurable: higher average severity, longer claim duration, and loss development patterns that diverge from historical triangles.
Carriers are responding with more aggressive early defense postures, pre-litigation intervention programs, and -- increasingly -- policy language addressing litigation funding disclosure as a condition of cooperation.
#LitigationFunding #SocialInflation #LiabilityInsurance #CommercialLines #ClaimsManagement
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