2022 has been a very busy year for the ILR team. We have achieved amazing things on the state, federal, and international levels. Although we faced challenges, ILR’s enthusiasm and dedication to legal reform helped us end the year strong. Before we ring in 2023, I would like to take a step back and share some of ILR’s top legal reform achievements of the past year.
1. Preserving Arbitration
The trial bar has attempted time and again in Congress to prohibit arbitration. ILR has opposed H.R. 963, the Forced Arbitration Injustice Repeal Act (FAIR Act), which would have effectively banned arbitration agreements to resolve a wide variety of disputes. This would have resulted in an increase in expensive and time-consuming class action litigation that primarily benefits plaintiffs’ attorneys, who take a large chunk of money before employees or consumers see one cent. Fortunately, this legislation received significant opposition in the House this year and was not considered in the Senate.
More recently, the trial bar tried to use must-pass legislation, the annual National Defense Authorization Act (NDAA), to ban arbitration as a form of alternative dispute resolution for servicemembers. ILR worked with our allies in the Senate to prevent anti-arbitration language from being included in the NDAA. This month, the House and Senate agreed upon final text for the NDAA that does not include any anti-arbitration provisions. It should be signed by President Biden soon.
This is important because arbitration provides a more equitable and efficient path for consumers and employees to resolve disputes than litigation. ILR’s economic research released this past March, Fairer, Faster, Better III: An Empirical Assessment of Consumer and Employment Arbitration, found that consumers and employees win more money, more often, and more quickly through arbitration than through litigation.
2. Advancing Landmark TPLF Reforms in the EU
In September, the European Parliament adopted a landmark report calling for EU-wide safeguards on third party litigation funding (TPLF). This vote was the culmination of ILR’s multi-year advocacy campaign in Parliament. The report was adopted by an 80% majority in the Plenary, with 504 votes in favor, 57 against, and 65 abstentions.
And on December 1st, the European Commission sent its official response to the Parliament’s resolution on recommendations for responsible private funding of litigation. In a letter to Parliament President Roberta Metsola, the Commission stated that it plans to “launch a mapping exercise to collect information on relevant regulations and practices in the Member States” and conduct an external study and stakeholder consultation—commonly the first steps in the legislative process. The Commission also said that “all proposals contained in the resolution of the European Parliament and annexed draft directive will be taken into account.”
This is a huge victory for EU consumers and the business community and could bring transparency to the multibillion-euro litigation funding industry.
3. Releasing Cutting Edge Research
2022 was a big year for ILR’s research program. You may already know that we conduct groundbreaking research on pressing issues to support our advocacy efforts. This year we released 16 research publications, significantly exceeding average production to meet the demands of an exceptional year.
One of our standout releases this year was Nuclear Verdicts: Trends, Causes, and Solutions. The paper shows that nuclear verdicts are on the rise and dives into the factors driving this trend. In addition, the paper makes the point that because of their massive size and unpredictability, nuclear verdicts can threaten the existence of a defendant’s business and raise costs for consumers.
We also recently released Tort Costs in America, An Empirical Analysis of Costs and Compensation of the U.S. Tort System, which reveals the costs of the tort system grew at an average annual rate of 6% a year from 2016 to 2020. This outpaces the growth of inflation and GDP over that same period. The report was referenced in an article in the Wall Street Journal titled How Lawsuits Cost You $3,600 a Year. Clearly America’s runaway lawsuit problem urgently needs fixing and ILR’s research provides an empirical look into this critical issue.
4. Reining in Misleading Trial Lawyer Ads
This year we witnessed several victories against trial lawyer advertising. For example, Louisiana—a state with some of the most prolific misleading trial lawyer ads—enacted two bills to help protect the public.
One bill requires any attorney advertising referencing past successes to disclose that “results may vary.” It also requires depicted scenes or client portrayals to feature a disclaimer if they are not actual scenes or clients. The second bill prohibits common misleading legal advertising tactics, such as dubbing an advertisement a “public service announcement” or a “medical alert.” It also requires advertisers to warn patients to consult with their doctor before discontinuing medication.
Kansas passed Senate Bill 150 into law. The law prevents lead aggregators, who harvest and sell individuals’ information to lawyers, from using common misleading legal advertising tactics and from selling or disclosing protected health information they gather without getting clear, written consent from the patient.
In addition to legislative victories, trial lawyer advertising reform also achieved a significant court victory in Recht v. Morrisey, a case challenging a trial lawyer advertising law in West Virginia. The Fourth Circuit Court of Appeals unanimously upheld that law in April, and just this month the Supreme Court of the United States denied cert for the case, signaling that they agree with the Fourth Circuit’s holding in Recht. As other states consider similar laws, they can do so knowing that our nation’s highest court has accepted reasonable limits on ads for legal services.
5. ILR’s First In-Person Summit Since 2018
On November 2, ILR hosted an in-person Summit titled Summit 2022: Law, Policy, & Politics. The last time we were able to convene in person for the Summit was 2018—four years ago. The pandemic may have prevented us from collaborating in person, but it did not affect our focus on advocating for a fair and balanced legal system.
At Summit 2022, I moderated a panel that explored how private rights of action and shareholder activism are changing the legal landscape. We also hosted two state attorneys general, Jason Miyares, attorney general of the Commonwealth of Virginia, and Brian E. Frosh, attorney general of the state of Maryland, who discussed their priorities and perspectives regarding enforcement, consumer protection, and other areas important to the business community.
Other panels discussed government enforcement overreach at federal agencies, litigation trends businesses face, the U.S. national security ramifications of TPLF, the burgeoning class action and litigation funding industries in the UK, and the impending creation of class action regimes across the European Union.
You can find the recordings on our website if you weren’t able to join us in person or virtually.
As you can see, the legal reform community made great strides in 2022. These five legal reform achievements are only a small glimpse into the work the ILR team has accomplished this year. You may think that with such a busy year behind us, we won’t be able to keep up the pace in 2023. But I am here to tell you we are only more focused, more organized, and ready to make even more change happen.