While liability insurance claims professionals are very familiar with the terms “third-party litigation funding” and “jury anchoring,” there aren’t many average Americans who recognize those phrases, a new online survey reveals.

The American Property Casualty Insurance Association (APCIA) and Munich Reinsurance America Inc. (Munich Re U.S.) released survey results on consumer knowledge and attitudes about certain plaintiff lawyer strategies, including excessive lawyer advertising, third-party litigation funding (TPLF) and jury anchoring.

The online survey, conducted by The Harris Poll among more than 2,000 U.S. adults, revealed that “jury anchoring” was a foreign term to three-quarters of the respondents, and 70 percent were in the dark about TPLF. On the flip side, 25 percent were familiar with anchoring and 30 percent recognized the TPLF concept.

Read more about jury anchoring, TPLF and insurance carrier best practices to stem the tide of rising claims severity in the Carrier Management collection of articles, “Unite and Conquer: Industry Battles Social Inflation.“

In addition, the plaintiffs side has its say in these articles: “How Legal Finance Adds Value to Judgment Preservation Insurance; Commercial Litigation Funding and Social Inflation: A Non-Sequitur

APCIA and Munich Re define TPLF as funding from investors not directly involved in a lawsuit in return for a portion of the jury award, and described “jury anchoring” as the suggestion of “exorbitant award amount that is often unsubstantiated” by lawyers to serve as a baseline amount for a jury award.

Whether they understood these concepts or not, once they were brought up to speed, 69 percent of survey respondents said they believed the two practices would increase the overall cost of home, auto and business insurance for all Americans. In addition, two-thirds agreed that the practices will also increase the cost of consumer goods and others everyday items.

Summarizing other key survey findings, APCIA and Munich Re U.S. reported:

• 84 percent agree that plaintiff lawyers should support their suggested damage awards with factual evidence.
• 75 percent agree that the practice of jury anchoring will increase the size of jury awards.
• 68 percent agree that the advertising of verdicts with “purported” large payouts desensitizes people to high jury awards, and 67 percent agree that state and federal lawmakers should put restrictions on lawyer advertising to ensure that they’re not misleading consumers.

Respondents were also asked about the participation of foreign investors — outside the U.S. — in litigation funding, with 77 percent agreeing that such participation could present a threat to national security.

The latest survey follows an early 2024 survey released by the same groups, finding that nearly 90 percent of respondents wanted legal reforms and 88 percent said there should be transparency of all parties involved in a civil lawsuit.

Related article: Most Americans Want Legal Reforms Against Practices Like Litigation Funding: Survey

In a media statement, Bonnie Guth, head of Government Affairs, Munich Re America Services, stressed the importance of raising awareness about how these legal practices the survey asked about impact the insurance industry and consumers. Allowing them to continue unchecked sends “improper signals to jurors, judges and defendants about the value of damages,” she said, going on to noted that ultimate consequences include putting a “financial strain on insurers and reinsurers, depletion of municipal resources, and disincentives for businesses to take risks.”

Stef Zielezienski, executive vice president and chief legal officer, APCIA, added that the two practices, and misleading legal advertising, “have promoted a litigious culture…”

“We need state and federal policymakers to address legal system abuse to restore fairness and predictability of justice in the United States,” he stated.

Sources: APCIA, Munich Re America