APCIA Supports Federal Bills Targeting Legal System Abuse to Reduce Insurance Costs
The American Property Casualty Insurance Association (APCIA) has expressed support for two significant federal bills targeting legal system abuses that contribute to rising insurance costs and affect the broader economy. The Lawsuit Abuse Reduction Act of 2025 (H.R. 5258) proposes amendments to Rule 11 of the Federal Rules of Civil Procedure to implement mandatory sanctions for frivolous lawsuits and eliminate the 'safe harbor' provision that currently allows attorneys to withdraw meritless claims without penalties. APCIA highlights that such legal system abuses increase costs for both consumers and businesses, often burdening small businesses with unnecessary legal expenses.
APCIA President and CEO David A. Sampson has noted the growing prevalence and expense of litigation, exacerbated by third-party litigation funding, which reduces the injured parties' recovery percentage by involving outside financiers. The association advocates for increased transparency and disclosure of litigation financing to prevent judicial outcomes from being influenced by profit motives. APCIA's 2025 advocacy priorities include addressing these issues along with promoting pricing innovation, risk-based pricing, and fostering insurance market innovation.
Supporting legislative efforts also includes backing the Forum Accountability and Integrity in Roadway (FAIR) Trucking Act (H.R. 5268), which aims to tackle forum shopping and staged accidents that escalate liability costs and contribute to increased nuclear verdicts against commercial carriers. This bill seeks to ensure that cases are heard in appropriate jurisdictions and to deter abusive legal practices within the trucking sector.
Beyond litigation reform, APCIA's 2025 agenda emphasizes resilience and sustainability initiatives to mitigate risks from natural catastrophes and address cost drivers in auto insurance. It also supports innovation in emerging areas such as artificial intelligence and cybersecurity under suitable regulatory oversight to encourage private market growth.
Overall, APCIA underscores the need for reforming legal procedures and increasing transparency in litigation financing as essential steps to uphold fairness in the judicial system, protect insurance consumers, and stabilize market costs associated with litigation and claim liabilities. These measures are positioned to bring greater accountability, predictability, and cost control to the property and casualty insurance landscape.