With 2023 concluded, I want to take a moment to wish all of you a Happy New Year! Last year flew by, and the ILR team is ready for an action-packed 2024.
Before we look ahead to this new year, I want to reflect on the legal reform victories we achieved this past year. 2023 marked ILR’s 25th anniversary. We were established in 1998 after the business community banded together and said enough was enough. For a quarter-century, we’ve proven that our work makes a difference—that the thesis on which ILR was founded was and always will be true: when businesses spend less fighting frivolous litigation, they spend more hiring, innovating, and growing.
And since our founding, we’ve continued to fight for a fairer civil justice system. As you’ll read, 2023 was a significant year that demonstrated how we are leading the charge on the most pressing legal reform issues impacting the U.S. business community.
Advancing Reforms in the States
In a historic moment for legal reform, Florida Gov. Ron DeSantis signed into law the biggest legal reform bill in decades. The reforms in the legislation include protecting businesses from paying damages when a plaintiff is primarily at fault for an injury, eliminating most one-way attorneys’ fees for plaintiffs, limiting attorney fee multipliers, requiring medical damages information to be transparent, and curbing abusive “bad faith” claims during the insurance settlement process.
Bringing Third Party Litigation Funding out of the Shadows
Third party litigation funding (TPLF) is a secretive, multibillion-dollar global industry that allows hedge funds and outside financiers to invest in a lawsuit in exchange for a cut of any settlement or award. It is easily one of the biggest contributors to our abusive litigation system. In 2023, we saw an increase in momentum in Washington, across the states, and internationally towards reining in this pernicious practice.
Some highlights include:
- The bipartisan House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party (the Select Committee on China) flagged foreign third party litigation funding as a concern and recommended that Congress determine and establish the guardrails that are needed to prevent foreign adversaries from using third party litigation funding to obtain sensitive intellectual property. It also recommended requiring enhanced disclosures in federal court for foreign adversaries and for the funding received by entities under their control.
- Florida Sens. Marco Rubio (R) and Rick Scott (R) sent letters to the chief judges of Florida’s three federal district courts, asking them to require disclosure of foreign TPLF in the courts they oversee.
- Sens. John Kennedy (R-LA), Joe Manchin (D-WV), and Rep. Mike Johnson (R-LA, now Speaker of the House) introduced The Protecting Our Courts From Foreign Manipulation Act of 2023, which would require transparency to courts, to the parties, and to the Department of Justice when foreign persons and entities invest in U.S. litigation and would prohibit foreign governments and sovereign wealth funds from investing in U.S. litigation.
- The day before the bill was introduced, the House Oversight and Accountability Committee held a first-ever congressional hearing on TPLF.
- Twenty-five companies sent a letter urging the House Committee on Oversight and Accountability to support disclosure of TPLF.
- ILR, along with 34 other groups, submitted a letter to urge the Advisory Committee on Civil Rules (Committee) to amend Rule 26 of the Federal Rules of Civil Procedure to require disclosure of TPLF arrangements in any civil action filed in federal court.
- Montana enacted disclosure requirements.
- In the EU, we also worked to introduce safeguards on TPLF and raise awareness of how gaps in the EU’s regulatory architecture expose the Union to strategic and security risks.
- This year will be critical for the TPLF initiative as the EU is expected to complete its study on this industry and the new Commission will decide what regulatory measures to take.
Expanding Our Efforts Internationally
ILR was also active abroad in jurisdictions where U.S.-style class action features are becoming increasingly popular. In the EU, 2023 was a pivotal year as the Representative Actions Directive (RAD) entered into force. ILR worked in national capitals across the bloc to positively influence the implementation of this monumental Directive and ensure member states added crucial safeguards to their national class action laws.
ILR’s international team also advocated against problematic provisions in the EU’s Product Liability Directive (PLD). For decades, the PLD has successfully provided European consumers with the means to claim compensation for damage caused by defective products, while still giving businesses the room to innovate. The revised proposal, however, could encourage excessive litigation and end up dissuading businesses from advancing new technologies. In addition to working with our allies in Europe on improvements to the proposal, we built new partnerships with U.S.-based trade associations and had both sides of the Atlantic business community advocating in Brussels.
Looking beyond our progress in Brussels, ILR also fostered an international partnership with Fair Civil Justice (FCJ), the new UK organization supported by the British Chamber of Commerce and other British and European trade groups dedicated to limiting lawsuit abuse in the UK.
Publishing Eight Cutting-Edge Research Papers
ILR released eight new research papers: from examining how America’s small businesses shoulder the high costs of our legal system to uncovering how trucking companies face a rising tide of lawsuits that causes real harm to a vital industry.
I’m proud of our accomplishments in 2023 and look forward to our progress in this new year. May 2024 bring us a renewed sense of energy to work together on the opportunities that lie ahead.