Issue Brief by Senior Policy Analyst, Cody Allen | callen@csg.org

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“Tort (from Latin: torquere, to twist; tortus, twisted, wrested aside). A tort is 1) a private or civil wrong or injury, independent of contract. 2) A violation of a duty imposed by general law or otherwise upon all persons occupying the relation to each other which is involved in a given transaction. 3) There must always be a violation of some duty owing to the plaintiff, and generally, such duty must arise by operation of law and not by mere agreement of the parties.” — Black’s Law Dictionary.¹

Unlike the delicious dessert that is its homophone, a tort – or cases involving tortious conduct – is a broad label for cases entailing disputes over a civil wrong or injury. Put simply, a tort case is designed to compensate a plaintiff – the person or entity filing the lawsuit – for an injury resulting from the unreasonable conduct or malfeasance of another.²

Tort reform—or attempts to limit what is sometimes viewed as frivolous or “nuclear” lawsuits—is a widespread reform that has received proposals across the country and been mentioned as a priority by leaders—including a bipartisan coalition of states—across the country.* Among the pending measures, three primary issues involved in the tort reform debate appear to be the focus of lawmakers’ attempts to get reforms across the finish line:

1. Phantom damages, a common tactic of calculating damages at the treatment amount charged or billed – referred to as the “chargemaster” rate – which can often exceed the actual amount paid for treatment or services.
2. Anchoring, which is the process of presenting unreasonably high damage estimates to juries to argue for more considerable pain and suffering or other noneconomic damage computations that may contribute to excessive verdicts.
3. Third-party litigation funding (TPLF), when entities advance funds to a litigant and/or law firm to assist with litigation or other costs contingent on victory in the case and the receipt of a portion thereof.³
   
   *Nuclear lawsuits refer to cases where the amount awarded in damages, particularly for non-economic or non-medical care costs, exceeds the perceived actual damages to the plaintiff.

Debates regarding the results or benefits of tort reform have been fierce in state capitals nationwide. Opponents or skeptics of the reform argue that tort reform has little to no impact on lowering insurance premiums for individuals or businesses – a key pro-tort reform claim. The Center of Democracy and Justice at New York University reports that industry experts and insurers do not claim that tort reform will reduce insurance rates, according to quotes from the American Tort Reform Association and American Insurance Association.⁴

The Consumer Liaison Committee of the National Association of Insurance Commissioners also featured a presentation at the Summer 2022 National Meeting that emphasized the need to better distinguish between litigation – a neutral dispute with evidence – from the reformers’ claim of “frivolous” litigation. Instead, the committee argued that the rise in lawsuits and verdicts against insurers is primarily due to increased denial of claims, which leaves consumers with no choice but to take disputes to the courts.⁵

Meanwhile, tort reform supporters highlight the astronomical impact of these “nuclear verdicts,” which they argue will cost nearly 2.1 percent of the national gross domestic product – or $529 billion – in economic impacts in 2022 alone.† Proponents of comprehensive reforms, such as the U.S. Chamber of Commerce’s Institute for Litigation Reform, estimate this cost could increase to more than $900 billion by 2030 as the average annual growth of tort costs is around 7.1 percent.⁶ They also argue that these reforms will result in lower insurance costs, protect consumers, and create a more business-friendly environment.⁷,⁸

States are taking heed regardless of the burgeoning support or opposition to this legal reform. As such, this CSG South Issue Brief highlights a selection of recently enacted – and currently pending – measures across the country that may be relevant to Southern state lawmakers.

FIGURE 1. Balancing Justice and Liability: Framing the Tort Reform Debate

† To put this into perspective, this is the equivalent of $4,207 annually in costs for every household in the U.S.

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Tort Reform in the States

FIGURE 2. Estimated Costs of Tort Cases in Households in the U.S.

Colorado

During the 2023 legislation session, lawmakers enacted the “Colorado Consumer Legal Funding Act,” which defined a consumer legal funding transaction as when a consumer legal funding company purchases up to $500,000 of an interest in an individual‘s associated legal claim. The money provided by the company must be repaid from the proceeds, if any, resulting from the settlement or judgment of the consumer‘s associated legal claim. The company may also receive a funding fee as part of the contract, but the fee may not exceed 36 percent of the funded amount.⁹

As enacted, the law also provides the requirements for a consumer legal funding contract, which is satisfied when a consumer‘s associated legal claim has been resolved or settled. The consumer must pay the company a predetermined amount, as specified in the contract, and the amount may not be calculated as a percentage of the judgment or settlement. The consumer is not required to repay the company if they do not prevail on or settle the associated legal claim. The bill also required specific disclosures for a consumer legal funding contract.¹⁰

The act assigned regulatory authority to the state attorney general‘s office, including over registration requirements and associated registration fees and surcharges. The fees are credited to a new consumer legal funding cash fund and used to pay the state’s costs to implement and administer the new law. The surcharges are credited to the Colorado Identity Theft and Financial Fraud Fund for use in enforcement. The attorney general may fine a company, suspend or revoke a company‘s license, or prohibit a company from recovering funding fees for violating the law. It also permits the adoption of rules regarding certain consumer credit transactions secured by the potential proceeds from a settlement or judgment obtained in an associated legal claim.¹¹

The following year, a bipartisan measure—House Bill 1472 (2024)—established a cap on wrongful death damages of $2.125 million, increased the cap on noneconomic damages recoverable for civil actions regarding any noneconomic loss or injury from $250,000 to $1.5 million, and incrementally increased the medical malpractice wrongful death damages limit to $1.575 million over a five-year period. Beginning in 2028 and every two years thereafter, the wrongful death and noneconomic damages award caps will be adjusted to match inflation.¹²

Proponents claim this bill represents a compromise between healthcare providers, insurance, trial attorneys, and patient advocates to avoid any drastic changes that may benefit one party. They also claim it will provide much-needed stability to the state’s healthcare and insurance markets, given the biennial adjustments and schedule of incremental increases.¹³

In opposition, critics argue that the measure—explicitly designed to head off dueling ballot measures—does not do enough to deter “bad actors” in the healthcare industry who can pay out limited damages and avoid costly punitive measures. Others also argue that the new caps are too high and do too little to assist business owners or medical providers afford insurance at ever-increasing premium rates.¹⁴

Florida

Perhaps the most referenced tort reform in our CSG South region came from the Sunshine State during the 2023 legislative session. As enacted, House Bill 837 (2023) addressed several tort reform issues, including preventing phantom damages by creating more transparency surrounding actual damages, uniform processes for the admissibility of evidence, and reforming the calculation of medical damages in personal injury or wrongful death actions.¹⁵ It also eliminated contingency fee multipliers in attorney’s fees and one-way attorney fee provisions – those that allowed for an award of attorney’s fees to prevailing parties in an insurance dispute – and lowered the statute of limitations for general negligence suits.¹⁶

Notably, the bill also made clear that mere negligence in the handling of a policy limits demand is not sufficient to establish a bad faith claim, cemented the use of the lodestar method of calculating attorney’s fees, and updated laws governing the admissibility of evidence for medical claims. It also established interpleader and binding arbitration as mechanisms for resolving competing claims in cases with insufficient limits to limit extracontractual recovery. Under the new law, insurers also now have a 90-day “Safe Harbor” provision during which they may tender policy limits after receiving notice and proof of a third-party claim.¹⁷

FIGURE 3. Example of Rise in Tort-Related Motor Vehicle Suits Prior to HB 837 Taking Effect

Additionally, the bill created a rebuttable presumption that attorney fees calculated using the lodestar method are sufficient and reasonable in most civil actions; reduced the statute of limitations for negligence actions; provided standards for bad faith actions; provided for distribution of proceeds when two or more third-party claims arise out of a single occurrence exceeding policy limits; limited the applicability of provisions relating to attorney fees in specific actions against insurers; provided standards for evidence to prove damages for medical expenses in specific civil actions; required certain disclosures with respect to claims for medical expenses for treatment rendered under letters of protection; required the trier of fact to consider the fault of certain persons who contribute to an injury; provided that the owner or principal operator of multifamily residential property which substantially implements specified security measures on that property has presumption against liability in connection with certain criminal acts that occur on premises; revised provisions relating to immunity from liability for injury to trespassers on real property; and specified the applicability of these new laws relating to offers of judgment and demands for judgment.¹⁸

The bill further defined admissible evidence for medical treatment expenses in personal injury or wrongful death actions, specifying the types of evidence that can be used to prove the damages for past and future medical treatment. It also outlined specific requirements for disclosing letters of protection and itemized medical billings in personal injury or wrongful death actions. The bill included additional provisions for disclosing medical billing practices, including selling accounts receivable to third parties. It mandated the consideration of all parties‘ fault in any premises liability cases involving criminal acts by third parties. The bill also defined “crime prevention through environmental design” and set specific security measures for multifamily residential properties to gain liability protections. The bill further mandated employee training on security measures, required periodic review and updates of the training curriculum, and specified that the burden of proof for liability protection lies with the property owner or operator.¹⁹

Proponents of the measure state that the bill struck the right balance between ensuring “good actors” receive fair and speedy compensation while removing the incentives for “bad actors” to engage in frivolous litigation and excessive attorney fees.²⁰ Opponents, meanwhile, argued that the bill takes away the incentive for businesses to protect customers and makes it more complex and less affordable for the average citizen to sue their insurance company in a dispute.²¹,²²

At this stage, the impacts of this law are still under study, with accurate gauging of its impact “thrown off” due to the rush of plaintiff’s attorneys to file cases immediately before the law took effect.²³ According to the Insurance Journal and the Florida Bar, more than 25,000 lawsuits and claims against insurance companies were filed before the tort reform bill was signed into law and enacted by only a single firm, with more than 130,000 total lawsuits filed before the deadline.²⁴ As such, the passage of tort reform proposals in other states may lead to a short-term spike in filings and claims, which could delay the realization of any benefits anticipated by this tort reform measure and overwhelm the courts.

In short, reactions to the Sunshine State’s reforms have been mixed, with an upward trajectory for the state-run insurer of last resort – Citizens Property Insurance Corporation – but little to no impact on the average Florida policyholder. The affordability of property insurance does not yet appear to have benefited from the reforms, and further study of the long-term trends is likely to be needed before an accurate report card can be published.²⁵

Illinois

During the 2024 legislative session, the Illinois Legislature enacted two measures aimed at litigation reform. The first amended the state’s Consumer Legal Funding Act to more stringently regulate the fees, disclosures, licensing, and disciplinary actions for legal funding entities operating in the state, focusing on refinancing and enhanced consumer protections. Primarily, the bill defined terms such as “consumer legal funding,” “funded amount,” and “consumer legal funding company” and set forth the fees and charges that can be imposed. Specifically, the fee charged to consumers is capped at 18 percent of the funded amount, assessed every six months, and limits any additional document preparation fee not to exceed $75. The legislation also stipulated that no charges may accrue on consumer legal funding for more than 42 months after the funding date, and it allows for refinancing of consumer legal funding as authorized by administrative rules of the Illinois Department of Financial and Professional Regulation.²⁶

The Act also mandated detailed disclosures in consumer legal funding contracts, including the funded amount, itemized charges, maximum total amount payable, and a payment schedule. It also gave consumers the right to cancel the contract within 14 business days without penalty. It emphasized that the consumer legal funding company cannot influence the legal claim‘s settlement and must be notified of the claim‘s outcome. Additionally, the Act required consumer legal funding companies to be licensed, with specific application processes and conditions for license issuance, suspension, and revocation. The Illinois Department of Financial and Professional Regulation secretary was granted authority to investigate applicants and impose conditions on licenses if necessary. The law introduced new rules for refinancing consumer legal funding and outlined the disciplinary actions that can be taken against licensees, including fines of up to $25,000 per offense or $75,000 for specific violations and the conditions under which licenses can be suspended or revoked. The Department is empowered to adopt rules for the protection of consumers and the proper conduct of the third-party litigation funder.²⁷

The second measure amended the state’s Financial Institutions Code to enhance the administration and enforcement of laws governing financial institutions. It also expanded the scope of financial institutions to include consumer legal funding companies and collection agencies.²⁸

Indiana

Similarly, the Hoosier State filed two proposed tort reform measures; however, only one made it across the finish line and was enacted into law. Indiana House Bill 134 (2024), which died without a hearing in the House, would have attempted to address concerns over anchoring leading to excess jury awards by limiting what evidence can be used or presented for noneconomic damages. The bill would have prohibited the presentation of a specific dollar amount, dollar range, mathematical formula, or units of time to calculate noneconomic damages in litigation involving a personal injury or wrongful death claim.²⁹

The second measure, House Bill 1160 (2024), was successfully signed into law. This measure was enacted to add regulatory oversight and consumer transparency standards to third-party litigation funding. More specifically, the new restrictions require litigants to disclose any TPLF monies received and make such agreements subject to discovery during litigation, prohibit access to or use of proprietary data by a funder to influence – directly or indirectly – any aspect of the case or a plaintiff’s decision-making, protects any information or document under seal or privilege from being disclosed to a funder, and bar TPLF agreements in commercial funding litigation involving a foreign entity of concern.³⁰

Iowa

A medical liability reform, this Iowa measure established a $250,000 limit on noneconomic damages. Additionally, language is added to the statute that limits the amount recoverable in cases where a jury determines that there is a substantial or permanent impairment or disability that may not exceed $1 million or $2 million if the action includes malfeasance by a hospital. The new law also includes a provision allowing for an annual 2.1 percent increase beginning in 2028 to the damage awards cap. The bill did not establish any limit for actual economic damages or punitive damages in the event of willful and wanton disregard for a patient’s health and safety.³¹

Proponents argued that this reform is a lifeline for rural medical providers who cannot afford the continually rising insurance rates and the difficulty of retaining medical providers in the state who may be scared off by these “nuclear” verdicts. In contrast, opponents argued that by placing a cap on damages, patients who are disabled or harmed, as well as families who lose a loved one to malfeasance, will not be protected or receive just compensation. They also disputed the claim that tort reform will assist with the state’s physician shortage, arguing that there are more effective ways to improve the recruitment and retention of healthcare providers. The bill received bipartisan opposition, despite its passage.³²,³³

Louisiana

As enacted, House Bill 337 (2023) amended and reenacted certain provisions pertaining to direct actions against insurers. Specifically, it outlined the allowable conditions under which an injured party can directly sue an insurer, such as the insured’s bankruptcy, insolvency, or death, and when the insurer is an uninsured motorist carrier. It also stipulated that lawsuits against insurers should not include the insurer in the case caption and restrict the disclosure of insurance coverage to juries.³⁴

Additionally, the bill allowed for the interruption of prescriptions against all insurers providing coverage when an action is filed against the insured. It permits the joinder of a liability insurer as a party defendant for final judgment or settlement purposes under certain conditions. The bill further specified procedures for insurers denying coverage, including timely notice of reservation of rights and independent counsel provision—to be added to an updated evidence code. The law also ensured that a plaintiff could resolve a claim against one insurer while preserving claims against other insurers of the same defendant.³⁵

The same session saw lawmakers enact an omnibus tort reform measure. Senate Bill 355 (2024) introduced significant regulations concerning foreign third-party litigation funding in Louisiana. The legislation established two new chapters in the Louisiana Revised Statutes, specifically aimed at enhancing transparency and imposing limitations on foreign entities involved in third-party litigation funding. It mandates detailed disclosures from foreign third-party litigation funders, including the names, addresses, and citizenship or country of incorporation of any foreign entities involved. These disclosures must be submitted to the Attorney General within 30 days of the execution of any relevant agreement or the filing of a civil action. Additionally, the legislation prohibited foreign third-party litigation funders from making decisions regarding the course of civil actions they fund, such as appointing or changing counsel, selecting expert witnesses, or influencing litigation strategy and settlements.³⁶

The bill also introduced the “Litigation Financing Disclosure Act,” which requires the disclosure of litigation financing agreements and ensures that such contracts are subject to discovery in civil actions. Violations of these provisions are deemed deceptive and unfair trade practices, actionable under state law, and any agreements violating the act are rendered null and void. The Attorney General is empowered to enforce compliance, impose fines, and prohibit violators from operating within the state. The law also mandated annual reports from the Attorney General to the President of the Senate and the Speaker of the House of Representatives, detailing foreign involvement in litigation financing agreements and any enforcement actions taken. These reports must maintain the confidentiality of the parties involved in the litigation. The legislation also includes specific exemptions for certain entities, such as nonprofit legal organizations and health insurers. It clarifies that funds provided solely for personal needs are not considered litigation financing.³⁷

Montana

In Big Sky Country, lawmakers enacted the Litigation Financing Transparency and Consumer Protection Act of 2023 to enhance and implement regulations governing TPLFs. Specifically, the measure requires the disclosure of any funding agreements in all civil cases in the state, mandates registration requirements for funders with the Secretary of State, prohibits any referral or commission fees for connecting TPLFs with litigants via attorneys or medical providers, limits funders’ recovery to no more than 25 percent of the total amount awarded via settlement or judgment, confines any interest charged in such an agreement to no more than 15 percent or 6 percentage points greater than the Federal Reserve Systems’ prime rate, and bans any involvement by a TPLF in any case settlement or decisions.³⁸,³⁹

Missouri

In 2023, the Show-Me State enacted the Consumer Legal Funding Act, establishing provisions relating to contracts for consumer legal funding – a nonrecourse contractual transaction in which a consumer legal funding company purchases and a consumer assigns to the company a contingent right to receive potential proceeds from a settlement, judgment, award, or verdict obtained in the consumer’s legal claim so long as certain elements apply.⁴⁰

The act also provided requirements that must be included in any such contract and required a company to give the consumer’s attorney a written notice of the contract within three business days of the funding date. The contract may only be entered into if an existing legal claim in which an attorney represents the consumer is active and shall not be valid if its terms exceed 48 months. Additionally, no consumer legal funding contract shall be automatically renewed. Additionally, all consumer legal funding contracts shall contain disclosures regarding the contract’s material terms. The act provided that only attorney’s liens related to the legal claim, Medicare, or other statutory liens associated with the legal claim will take priority over claims to proceeds from the consumer legal funding company. Additionally, no consumer legal funding company shall report a consumer to a credit reporting agency if insufficient funds remain from the net proceeds to repay the lender.⁴¹

The law also prohibited any consumer legal funding company from engaging in business in the state without obtaining a license from the state Division of Finance of the Department of Commerce and Insurance. The initial or renewal license applications must be in writing, made under oath, and on the form provided by the department. They also require the payment of any approved fees associated with licensing. If the Director of the Division of Finance determines that any consumer legal funding company fails to meet its obligations under this law or any provisions relating to consumer legal funding, the Director may issue an order to cease and desist, which is enforceable by a civil penalty of no more than $1,000 per day for each day a violation occurs. Furthermore, if any consumer legal funding company fails to comply with the provision of this act or any laws relating to consumer legal funding, its license may be suspended or revoked by the division. The division may also investigate and examine each consumer funding company as necessary to carry out this act. Finally, it also makes a consumer legal funding contract subject to the rules of discovery.⁴²

Less successfully, lawmakers in Missouri also attempted to pass legislation in 2024 limiting what parties or attorneys can use in a civil action before a jury trial. As written, referencing a specific dollar amount or range in any argument for noneconomic damages would have been prohibited. The proposal died in the Senate Judiciary and Civil and Criminal Jurisprudence Committee upon sine die.⁴³

Oklahoma

While it died in the House, the Oklahoma Senate passed a measure in 2024 that would have targeted excessive anchoring of charges and damages in litigation. Expressly, the bill would have prohibited any party or counsel in a civil tort action from seeking or referring to a specific amount or range for the jury to consider when awarding noneconomic damages. ¹⁴ Business interests across the state supported the measure as a way to avoid nuclear verdicts and avoid the harmful fallout of such awards on small businesses and employers across the state. However, consumer advocates and trial lawyers criticized the measure as an attempt to “gag” one side of the case before the jury unfairly and make it harder for injured parties to get the relief appropriate for their losses. ¹⁵

Utah

The Beehive State’s 2024 tort reform measure was more targeted at a specific litigation issue. As enacted, it modified provisions related to uninsured and underinsured motorist coverage, aiming to clarify that benefits related to the Utah Labor Commission do not need to be exhausted before such coverage can be paid. Specifically, the bill amends state code, stipulating that uninsured motorist coverage does not cover any benefits under the Workers’ Compensation Act, the Utah Occupational Disease Act, the Uninsured Employers Fund, or the Employers’ Reinsurance Fund provided by various funds and carriers to avoid “double recovery.” These benefits do not need to be paid before an uninsured motorist claim can be pursued and resolved. The bill also prohibited subrogation by workers’ compensation insurance carriers and ensured any benefits provided by these entities did not reduce that uninsured motorist coverage. Additionally, the legislation addressed interpolicy stacking, prohibiting it for underinsured motorist coverage. The bill also outlined that a workers’ compensation insurance carrier may not subrogate underinsured motorist coverage and may not be reduced by benefits provided by these entities. It further specifies conditions under which underinsured motorist coverage may be reduced by health insurance subrogation and detailed exclusions for coverage in cases involving certain illegal activities.⁴⁶

The new law established a comprehensive process for arbitration and litigation of claims, including timelines for responses, handling of costs and fees, and specific rules governing arbitration proceedings. It mandates that an action on a written policy or contract for underinsured motorist coverage must be commenced within four years after the inception of loss, defined as the date of the settlement check representing the last liability policy payment. The bill also specifies that an underinsured motorist insurer does not have a right of reimbursement against a person liable for damages if the person’s liability insurer has tendered the policy limit and the claimant has accepted the limits.⁴⁷

Washington

In the Pacific Northwest, lawmakers also passed a tort reform measure aimed at workers’ compensation and medical malpractice civil cases. The bill defined the “attending provider” role in workers’ compensation claims and included psychologists for mental health-only claims. Effective July 1, 2025, the bill amended several sections of state code to clarify provider functions, mandates that health service providers testify in related hearings, and prohibits employers from engaging in claim suppression. It outlines the rights of workers to choose their health service providers and specifies procedures for handling claims, including determinations of permanent disability and requirements for medical examinations.⁴⁸

Additionally, it detailed the process for closing claims by self-insurers, including specific conditions and notification requirements for workers. Self-insurers must obtain a supplemental medical opinion if there is a disagreement on the worker’s condition and notify workers of claim closure with an option to protest within 60 days. If protested, the Department of Labor and Industries will review the closure. The department can also require corrections within two years if errors or violations are found. The bill also addresses correcting benefits paid due to clerical errors or misrepresentation. It defines “comparable wages and benefits” as at least 95 percent of the worker’s pre-injury wages and benefits.⁴⁹

To encourage employers to maintain employment for injured workers and limit excessive claims, the bill provides wage subsidies and reimbursement for training, clothing, and tools necessary for light duty or transitional work. Employers can receive wage subsidies for up to 66 days of work within a 24-month period, provided they submit reimbursement requests within one year and comply with specific conditions. The bill also established a Washington stay-at-work account funded by employer assessments to cover these costs. The bill further clarified that the first 14 days following an injury do not break the continuity of the disability period if it continues beyond that period. It also specified that workers receiving full wages from their employer during temporary total disability are not eligible for additional payments and set limits on monthly payments based on state average wages.⁵⁰

The legislation prioritized the importance of vocational rehabilitation services to assist injured workers in returning to employment. These services focus particularly on retaining their previous roles and implementing necessary job modifications. It also extends vital support to those facing severe disabilities while providing attractive incentives for employers, including premium reductions and wage reimbursements. Additionally, vocational rehabilitation benefits will assist with essential costs such as tuition and transportation, with a generous cap of $3,000 during any 52-week period and up to $5,000 for necessary accommodations. The bill emphasizes the importance of monitoring the effectiveness of these rehabilitation services and promotes collaboration with the state employment department for successful job placements. A dedicated provider network for injured workers will be established to enhance support further, ensuring adherence to evidence-based guidelines. Network providers will facilitate ongoing care, with the department overseeing network development and utilization reviews for self-insurers. The department will cover initial prescription medications related to injury claims and permit authorized treatment for pain management and specific occupational illnesses.⁵¹

The Department of Labor and Industries will establish additional occupational health and education centers to expand access to best practices and prevent preventable disability, with certification criteria and quality benchmarks for providers. Providers failing to meet network standards may be removed, and those exhibiting patterns of low-quality care may be permanently removed. The department will assist workers in finding new providers if their current provider is terminated from the network. The department will report annually on the implementation of the provider network and the expansion of centers for occupational health and education. The bill also clarifies the process and standards for residence modification assistance for workers with catastrophic injuries, including the process for accessing benefits, considering individual needs and preferences, and basing rules on nationally accepted guidelines for adaptive housing.⁵²

West Virginia

West Virginia lawmakers also examined the much-maligned non-realized damage awards during the 2023 session before passing a bill to address such non-economic damages in workers’ compensation cases. The enacted measure established a cap on the maximum amount recoverable for noneconomic loss via compensatory damages to an amount not to exceed the higher of $500,000 per person or two times the economic damages. Like the Iowa bill, this law also establishes a regular process of increasing the awards limit tied to the Consumer Price Index as published by the U.S. Department of Labor. This took effect on January 1, 2024, and is to be reviewed each January 1 thereafter.⁵³

Given the tight insurance market, proponents celebrated the bill’s passage and argued that it is good for employers and makes it easier for employers of all sizes to obtain and afford comprehensive insurance coverage. On the other hand, opponents decried the measure’s passage – primarily due to the heavy lobbying of a business in the state that was a repeat offender in safety code violations – claiming that the measure will reward “bad actors” and erode protections for workers, particularly in dangerous lines of work. Notably, the bill became law without the governor’s signature.⁵⁴

The following year, lawmakers updated the Business Liability Protection Act regarding adverse actions relating to lawful firearm possession in locked vehicles and limiting civil liability. The bill delineated the circumstances under which an employer may not terminate or take adverse action against an employee for lawful firearm possession. It also stipulated that property owners may prohibit the carrying of firearms on their premises but cannot prevent employees, customers, or invitees from storing legally owned firearms in locked vehicles in parking lots.⁵⁵

As enacted, the new law also prohibits property owners from searching vehicles to ascertain the presence of firearms, except by on-duty law enforcement personnel. Additionally, it restricted employers from conditioning employment on firearm possession status or agreements prohibiting lawful firearm storage in vehicles. The bill provided immunity from civil liability for employers and property owners complying with these provisions and limited their duty of care. Enforcement authority is granted to the Attorney General, who may seek injunctive relief, civil penalties, or both. Aggrieved individuals may also bring actions in their respective circuit courts, with potential awards for court costs and attorney fees to prevailing parties.⁵⁶

Not to be outdone, in the same session, Senators amended and reenacted specific sections of state code related to consumer litigation financing, aiming to regulate the practices of litigation financiers and protect consumers involved in legal claims. The primary provisions included defining key terms such as “consumer,” “litigation financier,” and “litigation financing” and excluding certain entities and transactions from classification as litigation financing. The bill also prohibited litigation financiers from engaging in specific practices, such as paying or receiving referral fees, advertising misleading information, and influencing the conduct of the consumer’s legal claim. It mandates the disclosure of third-party litigation financing agreements to all parties involved in the legal claim. It establishes a cap on the annual fee that litigation financiers can charge consumers, set at 18 percent of the original amount provided. The legislation also stipulates that fees may compound semiannually and cannot be charged for more than 42 months from the contract date. Additionally, it prohibited the assignment of litigation financing contracts to third parties under certain conditions and ensured that consumers’ obligations from the original transaction were not incorporated into subsequent transactions. Violations of these provisions render the litigation financing contract unenforceable, and the state attorney general retains authority to enforce the regulations under the Consumer Credit and Protection Act.⁵⁷

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Other State Tort Reform Proposals in 2025

Connecticut

Lawmakers have filed a proposal addressing a plaintiff’s rejection of an offer of compromise or settlement to promote more efficient litigation, reduce the number of frivolous lawsuits filed, and encourage reasonable settlements. Notably, the bill would require plaintiffs to cover all reasonable attorney fees incurred by defendants if they reject an offer of compromise and fail to recover more than the offered amount by a judge or jury decision. It would also require plaintiffs to provide a bond or enter into a recognizance to cover all litigation costs when rejecting any offers. As of February 28, 2025, the measure is pending before the Joint Committee on the Judiciary.⁵⁸

Georgia

In the Peach State, lawmakers are working on two significant tort reform issues, which propose substantial changes to civil practice, tort law, and damages to limit liability and control litigation costs. Members are also debating comprehensive third-party litigation financing regulations, requiring registration, disclosures, and establishing prohibitions. These bills represent a concerted effort to reshape the legal landscape of Georgia, potentially impacting both plaintiffs and defendants in civil lawsuits.

• Senate Bill 68 (2025) would primarily limit noneconomic damages, modify specific trial procedures, establish a new cause of action for negligent security, limit the liability of owners or occupants, amend existing admissions of evidence, and cap attorney fee recovery to control litigation costs.⁵⁹

• Senate Bill 69 (2025) aims to better regulate litigation financiers by requiring their registration with the Department of Banking and Finance, prohibiting referral fees and limiting recovery, mandating certain contractual obligations between third-party financiers and customers, and allowing access to any litigation finance agreements during the discovery period of litigation.⁶⁰

The first measure, Senate Bill 68, passed both chambers on March 21, 2025, and is now pending the governor’s signature. As currently written, the bill would prohibit attorneys from arguing for specific monetary amounts or ranges for non-economic or “phantom” damages (such as pain and suffering) before the jury, prevent the “double recovery” of attorney fees, court costs, or litigation expenses, excluding contingency fee agreements from use to prove the reasonableness of attorney fees, permits the admission of seat belt use to diminish recovery for damages, adds protections for property owners by requiring plaintiffs to establish claims for negligent security were reasonably foreseeable, and requires the judge or jury to apportion fault to any third-parties involved in the incident and not just the property or business owner.⁶¹

It also would limit the amount of damages recoverable for medical expenses to only the amount paid, not the amount billed, which is often significantly higher. However, the substituted version of the measure that passed the chamber addressed concerns over the “phantom damages” portion by allowing juries or judges to be presented with the actual paid medical costs and the amount billed or “sticker price.” Another change in the law would create a process for voluntary trial bifurcation wherein the first phase would address the parties‘ liability, and the second phase would then determine compensation and damages.⁶²

Less controversially, the second measure – Senate Bill 69 – unanimously passed the Senate on February 27, 2025, and is awaiting its third reading in the House. Designed to regulate litigation financing, it would establish comprehensive rules for the individuals or entities serving as TPLFs, require such funders to register with the Georgia Department of Banking and Finance, prohibit TPLFs from influencing or directing any portion of the litigation as well as the offering of any commissions or referral fees. The bill would also require extensive consumer protections to be written into any third-party funding contract, such as the right of a consumer to cancel the agreement within five days of signing or receiving funds, disclosing specific terms regarding interest or fees, requiring the consumer’s signature on any TPLF agreement or contract, and permitting the discovery of such contracts or funding agreements during discovery. Additionally, TPLF agents must indemnify the consumer and their attorneys from any adverse costs, fees, damages, or sanctions. Any funder or their agents who violate any of these new registration, transparency, and consumer protection provisions may be charged with a felony punishable by imprisonment of no less than one but not to exceed five years and/or a fine of up to $10,000.⁶³

These linked measures would significantly change the legal landscape in the Peach State by significantly reducing payouts in tort litigation and regulating a previously unregulated industry. However, there is significant debate surrounding Senate Bill 68 about whether it would lower litigation costs or insurance premiums for individuals and businesses and whether it shifts the scales of justice too far in the defendant’s favor.⁶⁴

Regardless of the arguments for one or both bills, there is no debate that their enactment would significantly affect the civil justice system in Georgia.

Missouri

Referred to the Senate Committee on General Laws on February 27, 2025, lawmakers proposed a bill to address “double recovery” concerns.⁶⁵ Specifically, this proposal would introduce significant changes to state law concerning payments for tort liability to insurers, including:

• Making evidence of collateral sources or certain payments not admissible in court, which could alter how damages are claimed and compensated within the legal and insurance industries.

• Prohibiting the recovery of special damages if a defendant or insurer pays any portion of a plaintiff’s special recovery demands before trial.

• Limiting recoverable claims for reimbursements made by defendants or insurers to a plaintiff‘s insurer for deductibles and damages.

• Permitting the introduction of evidence regarding the actual costs of medical care if such costs are deemed reasonable and medically necessary.⁶⁶

Texas

Meanwhile, in the Lone Star State, a proposal filed before the start of the 2025 session would establish liability limits for noneconomic damages in personal injury claims in the state’s Civil Practice and Remedies Code. Specifically, it would note that a defendant‘s civil liability for noneconomic damages is limited to an amount for each claimant that does not exceed the greater of five times the economic or actual damages or $5 million. As of February 28, 2025, the measure is awaiting committee assignment.⁶⁷

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Conclusion

While there is widespread agreement on the need for greater transparency in third-party litigation funding, other aspects of reform – such as caps on damages, evidentiary rules, and limitations on legal fees – continue to generate debate. The varying outcomes of state-level measures highlight the challenge of crafting policies that mitigate excessive litigation costs and preserve access to justice for injured parties. As more data becomes available on the long-term effects of recent reforms, policymakers may refine their approaches to ensure fair and effective legal systems that serve all stakeholders. As such, given polling showing that more than 90 percent of citizens want stricter regulations on TPLFs, and nearly 60 percent did not even know that such a commercial industry even existed, lawmakers across the region may wish to pursue TPLF reforms separate from the more controversial or debated aspects of tort reform such as limits to non-economic damages, negligence, and fault limitations, or attorney fee restrictions.⁶⁸

Tort reform remains a complex and nuanced issue with significant implications for the legal system, businesses, insurers, and individuals. While states continue to explore various approaches to addressing litigation challenges or concerns, the debate centers on balancing fair compensation for plaintiffs with preventing high legal costs and frivolous lawsuits. The ongoing legislative efforts nationwide continue a debate that has existed for decades. From the infamous “hot coffee” Liebeck v. McDonald’s case in 1992 or even the Brown v. Kendall case in 1850, ample evidence exists that public perception regarding “excessive verdicts” or “frivolous lawsuits” may not always match the contextual reality.⁶⁹,⁷⁰ As states navigate these legal frontiers, lawmakers continue to focus on creating a legal system that deters frivolous litigation and ensures equitable access to justice for all. At the same time, some states may sprint toward immediate and drastic changes. Still, like the tortoise in the age-old race, a measured and persistent approach to tort reform focused on transparency and limiting “bad actors” may prove more effective in the stated goals of tort reform.

References

1. Henry Campbell Black, Black’s Law Dictionary, Revised Fourth Edition, June 1968, pp. 1660-1661, latestlaws.com/wp-content/uploads/2015/04/Blacks-Law-Dictionery.pdf.
2. Dennis Neilander, “Background Paper: Tort Reform,” Research Division, Legislative Counsel Bureau, Nevada Legislature, leg.state.nv.us/Division/Research/Publications/Bkground/BP95-11.pdf.
3. “TPLF Glossary,” Institute for Legal Reform, U.S. Chamber of Commerce, June 7, 2024, instituteforlegalreform.com/what-youneed-to-know-about-third-party-litigation-funding.
4. “Limiting Lawsuits (“Tort Reform”) Will Not Lower Insurance Premiums,” Center for Justice Democracy at New York Law School, 2024 Update, centerjd.org/system/files/InsuranceBackgrounder2024F.pdf.
5. Ken Klein, “Unpacking ‘Social Inflation’,” Presentation to the Consumer Liaison Committee, National Association of Insurance Commissioners 2022 National Meeting, August 12, 2022, content.naic.org/sites/default/files/national_meeting/AttmtFive_Consumer_Social%20Inflation_kenklein.pdf.
6. Nicholas C. Lucas, “The Hidden Costs of Lawsuits Continue to Grow,” Institute for Legal Reform, U.S. Chamber of Commerce, November 20, 2024, uschamber.com/lawsuits/hidden-costs-lawsuits-grow.
7. “Judicial Hellholes 2024-2025,” American Tort Reform Foundation, 2024, judicialhellholes.org/wp-content/uploads/2025/01/ATRA_JH24_text_04b_smaller.pdf.
8. Cary Silverman and Christopher E. Appel, “Nuclear Verdicts: An Update on Trends, Causes, and Solutions,” U.S. Chamber, May 2024, instituteforlegalreform.com/wp-content/uploads/2024/05/ILR-May-2024-Nuclear-Verdicts-Study.pdf.
9. Colorado House Bill 1162 (2023), leg.colorado.gov/sites/default/files/2023a_1162_signed.pdf.
10. Ibid.
11. Ibid.
12. Colorado House Bill 1472 (2024), leg.colorado.gov/sites/default/files/2024a_1472_signed.pdf.
13. Seth Klamann, “Colorado Gov. Jared Polis signs law raising damages cap for medical malpractice claims,” The Denver Post, June 3, 2024, denverpost.com/2024/06/03/colorado-medical-malpractice-damages-cap-lawsuits-jared-polis.
14. Ibid.
15. William Rabb, “Fla. Tort Bill Brings It: Limits Damages, Ends Fee Multipliers, Discloses LOPs – and more,” Insurance Journal, February 16, 2023, insurancejournal.com/news/southeast/2023/02/16/708217.htm.
16. Florida House Bill 837 (2023), laws.flrules.org/2023/15.
17. Ibid.
18. Ibid.
19. Ibid.
20. Christopher S. Branton, et al., “Florida Enacts Significant Tort Reform,” The National Law Review, March 24, 2023, natlawreview.com/article/florida-enacts-significant-tort-reform.
21. Patrick R. Fargason, “Comprehensive Tort Reform Spurs Record Filings,” Florida Bar Association, April 6, 2023, floridabar.org/theflorida-bar-news/comprehensive-tort-reform-spurs-record-filings.
22. John Divine, “The Verdict on Florida’s Tort Reforms,” Actuarial Review, Casualty Actuarial Society, July 26, 2024, ar.casact.org/theverdict-on-floridas-tort-reforms.
23. Fargason, “Comprehensive Tort Reform Spurs Record Filings,” Florida Bar Association.
24. William Rabb, “25,000 Lawsuits by Today? Florida Plaintiff Firms Rushing to File Before Tort-Reform Bill Signed into Law,” Insurance Journal, March 23, 2023, insurancejournal.com/news/southeast/2023/03/23/713579.htm.
25. John Divine, “The Verdict on Florida’s Tort Reforms,” Actuarial Review.
26. Illinois Senate Bill 3314 (2024), ilga.gov/legislation/BillStatus.asp?DocNum=3314&GAID=17&DocTypeID=SB&LegId=152717&SessionID=112&GA=103.
27. IL SB 3314 (2024).
28. Illinois Senate Bill 3550 (2024), ilga.gov/legislation/BillStatus.asp?DocNum=3550&GAID=17&DocTypeID=SB&LegId=153265&SessionID=112&GA=103.
29. Indiana Senate Bill 134 (2024), iga.in.gov/pdf-documents/123/2024/senate/bills/SB0134/SB0134.01.INTR.pdf.
30. IN HB 1160 (2024), iga.in.gov/legislative/2024/bills/house/1160/details.
31. Iowa House File 161 (2023), legis.iowa.gov/docs/publications/iactc/90.1/CH0004.pdf.
32. Jennifer Acton and Justus Thompson, “HF 161 – Fiscal Note,” Fiscal Services Division, Legislative Services Agency, Iowa Legislature, May 12, 2023, legis.iowa.gov/docs/publications/FN/1371828.pdf.
33. Stephen Gruber-Miller, “Iowa Legislature passes $2M cap on medical malpractice damages. Here’s the likely impact,” The Des Moines Register, February 9, 2023, desmoinesregister.com/story/news/politics/2023/02/08/iowa-house-votes-to-limit-medicalmalpractice-damages-a-gop-priority/69866480007.
34. Louisiana House Bill 337 (2024), legis.la.gov/legis/ViewDocument.aspx?d=1380478.
35. Ibid.
36. LA SB 355 (2024), legis.la.gov/legis/BillInfo.aspx?s=24RS&b=SB355.
37. Ibid.
38. Montana Senate Bill 269 (2023), archive.legmt.gov/bills/2023/billpdf/SB0269.pdf.
39. Montana Code Annotated § 31-1-107, archive.legmt.gov/bills/mca/title_0310/chapter_0010/part_0010/section_0070/0310-0010-0010-0070.html.
40. Missouri Senate Bill 103 (2023), senate.mo.gov/23info/pdf-bill/tat/SB103.pdf.
41. Ibid.
42. Ibid.
43. MO SB 987 (2024), senate.mo.gov/24info/pdf-bill/intro/SB987.pdf.
44. Oklahoma Senate Bill 1523 (2024), oklegislature.gov/cf_pdf/2023-24%20ENGR/SB/SB1523%20ENGR.PDF.
45. Ibid.
46. Utah House Bill 231 (2024), le.utah.gov/~2024/bills/hbillenr/HB0231.pdf.
47. Ibid.
48. Washington House Bill 1197 (2023), app.leg.wa.gov/billsummary?BillNumber=1197&Year=2023.
49. Ibid.
50. Ibid.
51. Ibid.
52. Ibid.
53. West Virginia House Bill 3270 (2023), wvlegislature.gov/bill_status/bills_text.cfm?billdoc=hb3270%20sub%20enr.htm&yr=2023&sesstype=RS&billtype=B&houseorig=H&i=3270.
54. Ibid.
55. WV HB 5232 (2024), wvlegislature.gov/bill_status/bills_history.cfm?input=5232&year=2024&sessiontype=rs&btype=bill.
56. Ibid.
57. WV SB 850 (2024), wvlegislature.gov/bill_status/bills_history.cfm?input=850&year=2024&sessiontype=rs&btype=bill.
58. Connecticut Senate Bill 762 (2025), cga.ct.gov/2025/TOB/S/PDF/2025SB-00762-R00-SB.PDF.
59. Georgia Senate Bill 68 (2025), legis.ga.gov/legislation/69756.
60. GA SB 69 (2025), legis.ga.gov/legislation/69757.
61. GA SB 68 (2025).
62. Ibid.
63. GA SB 69 (2025).
64. Maya Homan, “Georgia Senate Republicans pass bill to limit lawsuit awards after Kemp blessed concessions,” Georgia Recorder, February 21, 2025, georgiarecorder.com/2025/02/21/georgia-senate-republicans-pass-bill-to-limit-lawsuit-awards-after-kempblessed-concessions.
65. Missouri Senate Bill 553 (2025), senate.mo.gov/25info/pdf-bill/intro/SB553.pdf.
66. Ibid.
67. Texas House Bill 939 (2025), capitol.texas.gov/tlodocs/89R/billtext/html/HB00939I.htm.
68. Michael Silvestri, “More States Pushing Back on Third-Party Litigation Funding,” The Claims and Litigation Management Alliance Magazine, April 23, 2024, theclm.org/Magazine/articles/more-states-moving-to-regulate-third-party-litigation-funding-of-plaintiffs-lawsuits/2923.
69. Allison Torres Burtka, “Liebeck v. McDonald’s: The Hot Coffee Case,” American Museum of Tort Law, tortmuseum.org/liebeck-v-mcdonalds.
70. “Precedent Setting Cases,” American Museum of Tort Law, tortmuseum.org/online-tour/precedent-setting-cases.