Big I NY’s Lounsbury Calls For Mandatory Disclosure of ‘TPLF’ Arrangements
New York has taken an important first step toward regulating third-party litigation funding (TPLF) arrangements, but more needs to be done, Big I New York argued recently in a Connecticut newspaper. President and CEO Lisa Lounsbury called for action in a column published in the July 28, 2026 edition of the New Haven Register. Big I New York provides management services to Big I Connecticut.
Under a TPLF arrangement, a person or company who is not one of the parties to the lawsuit provides some or all of its funding. If their side wins a judgment, they collect a portion of the awarded damages. If it does not, they collect nothing.
As these arrangements are largely unregulated, funders can set their fees as high as they want. There is also no requirement that a party suing someone else disclose in court that a third party is paying the cost of the legal action.
Lounsbury wrote, “The result is a system where plaintiffs can be harmed further, lawsuits multiply, and the public pays the price through increased insurance premiums due to higher legal costs and inflated awards.”
Lounsbury noted that New York and other states have begun to regulate these arrangements and North Carolina banned them earlier this year. New York’s law capped the fees funders can charge, required mandatory disclosures in the financing agreements, and gave plaintiffs a grace period in which to change their minds. However, it stopped short of requiring litigants to disclose TPLF arrangements in court. Big I New York has urged the state legislature to enact that requirement.
“Congress … and other states can and should tackle the growing use of TPLF agreements before they do more damage to the legal system and add more cost to the insurance industry,” Lounsbury argued, pointing to a study estimating $50 billion or more in added insurance costs over the next five years. “Lawmakers need to require registration of funders, set limits on fees and recoveries, and demand full disclosure in court.”
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