#United States #Washington #Washington Health Innovation Council #Third-Party Litigation Funding #American Patients

Washington Health Innovation Council Unveils Urgent Report

On February 28, 2025, the Washington Health Innovation Council (WHIC) released an eye-opening report titled "A Look Beneath The Surface: The Dark Money and Misleading Tactics Harming American Patients." In this comprehensive study, WHIC delves into a complex issue affecting patients across the nation—third-party litigation funding (TPLF). This multibillion-dollar global industry underpins numerous mass tort lawsuits and poses a significant threat to the wellbeing of American patients.

Understanding Third-Party Litigation Funding

TPLF is a type of funding wherein investors, including foreign companies and governments, provide financial backing for lawsuits in exchange for a share of any settlement or verdict awarded. By enticing patients, especially those minimally informed about legal processes, to join these suits over medical device-related injuries, the industry surrounds itself with a veil of misleading information.

WHIC’s report poses five crucial questions to address this issue:
1. What is the scope of the TPLF problem?
2. How does it function?
3. Who are the main players involved?
4. What impacts does it have on patients and healthcare costs?
5. What federal and state policies are being proposed to address these challenges?

As pointed out in the report, financing for mass tort litigation today largely derives from banks, private equity firms, and hedge funds, which inject vast amounts of capital into lawsuits. Unfortunately, this influx of money is frequently at odds with the interests of patients and taxpayers. The influx of litigation financed by foreign actors raises urgent national security concerns, as it allows these entities to wage legal battles against American companies, often leading to detrimental consequences for healthcare innovation.

Insights into the Current Legal Landscape

The report sheds light on how TPLF raises healthcare costs and undermines the efforts of innovators striving to bring new treatments to market. In a troublesome convergence, the legal tactics employed by these funders often lead to public allegations against medical companies, distracting them from genuine research and development.

WHIC emphasizes the importance of educating policymakers and judiciary members, along with consumers, about the risks associated with TPLF. To that end, it provides a guide for consumers titled "Tips for Protecting Yourself from False Claims," aimed at empowering patients to navigate this complicated landscape more safely.

The potential threats posed by foreign financing are particularly alarming. There are currently no barriers preventing foreign investors from funding lawsuits against U.S.-based companies, which can result in significant exploitation of the U.S. court system, ultimately harming American intellectual property and technology vital to national security.

Legislative Solutions and Recommendations

The WHIC report also discusses various legislative actions seeking to mitigate the impacts of TPLF. It highlights three pertinent areas for potential change:

• - Revisions to the Federal Rules of Practice and Procedure (FRCP)
• - Introduction of new federal legislation, such as a bill proposed by Rep. Darrell Issa (R-CA)
• - State-level bills aimed at increasing the transparency of TPLF through mandatory registration or licensure, regulating fees, and clarifying financial interests to the public

The call to action embedded in the report urges policymakers to recognize the breadth of this issue and explore avenues for regulation. It invites the public to become informed, engage in advocacy, and take charge in protecting their interests in the face of TPLF abuses.

Learn More

For those looking to understand this critical issue further and take action, the full report is available on the WHIC's website at www.proinnovation.net.

About WHIC

The Washington Health Innovation Council operates as an exclusive forum for leaders to discuss pressing regulatory challenges. Regular meetings involve essential interactions with significant figures from legislative and healthcare sectors, aiming to foster innovation while confronting legislative hurdles. The council’s core policy pillars prioritize free-market principles, protection of intellectual property, patient advocacy, and enhanced transparency around litigation funding.