When a personal injury victim signs a litigation funding agreement, they’re often told it’s a lifeline. What they’re rarely told is what it will cost them. Court documents show plaintiffs who won millions walking away with nothing; their settlements consumed by litigation loans accruing interest at rates approaching 100% annually.

This is third-party litigation funding, a $15.2 billion industry operating with virtually no consumer protections, no transparency requirements, and no meaningful oversight. And state officials are taking notice.

At a recent New Hampshire House Commerce & Consumer Affairs Committee meeting, Insurance Commissioner DJ Bettencourt testified:

“And I want to emphasize a point that Representative Hunt just made so when you talk to industry about this particular problem and we’ve been at it five years what they tell you is we need some version of tort reform. So we need liability caps we need perhaps a ban on third party litigation funding what I’ve been a proponent of is third party litigation disclosure which was in fact a piece of legislation that you all had before you last year or excuse me the last session it was refiled it did not come to this committee this time around it went to House Judiciary it didn’t fare terribly well because what you have and what you have had in the past is a battle between the entities that are struggling to find this coverage at an affordable price versus the plaintiff’s attorneys who represent these victims.”

That battle is playing out in statehouses nationwide. Georgia passed Senate Bill 69 unanimously, establishing that a funder’s recovery cannot exceed the plaintiff’s own. Oklahoma passed the Foreign Litigation Funding Prevention Act 88-2, requiring disclosure of foreign-backed litigation finance. Senator Thom Tillis introduced federal legislation to close the tax loophole that allows funders to walk away with untaxed profits while plaintiffs pay taxes on their awards.

The reform argument is simple: access to justice and predatory lending are not the same thing. Disclosure is the floor. Consumers deserve to know when outside financial interests have a stake in the outcome of their case, and lawmakers have a responsibility to make sure they do.