The decade-long war between the TPLF sector and the commercial insurance industry reached a turning point when North Carolina became the first state to ban commercial litigation funding on June 22.
Executive Summary
The legislative ban against third-party litigation funding (TPLF) in North Carolina was a major victory for insurers and corporate defendants. But do not bet on TPLF's demise in other states. The resilient plaintiffs' bar is already shifting to private equity workarounds to keep cases financed.
While some legal and business publications framed the law as the start of a nationwide domino effect, that momentum has failed to materialize.
Instead, most states are choosing to build guardrails rather than insurmountable walls. Recent statutes target mandatory transparency, prohibit funder control over strategy and cap investor payouts. According to data compiled by the U.S. Chamber of Commerce, 20 states have enacted laws regulating the industry, including 13 states that passed restrictions within the last two years alone. None of these states sought an outright ban.
