The Economic Drain of Mass Tort Litigation: How All Americans Are Paying the Price

New York, NY – Mass tort lawsuits in the United States are having a significant economic impact on Americans, regardless of their knowledge or involvement in such litigation. These profit-driven legal maneuvers often benefit attorneys while draining the economic resources of the general public.

Mass tort litigations involve multiple plaintiffs, sometimes numbering in the thousands, seeking damages from corporations for alleged harm caused by their products. While some cases may be valid, many are initiated by attorneys through extensive advertising campaigns to locate individuals who can be convinced they have suffered harm. This process flips the usual legal dynamic, with attorneys actively seeking out potential clients instead of clients seeking legal assistance.

Major manufacturers and healthcare businesses are often targeted in well-known mass tort cases. These cases frequently rely on questionable scientific evidence that may not fully support the claims of damage. However, the vagueness of the evidence is often enough to initiate the litigation process.

Once a mass tort case is initiated, the outcomes can be unpredictable. Even innocent companies may choose to settle rather than face a costly and lengthy legal battle, knowing that their public image and reputation could suffer from baseless but widely publicized allegations.

The growth of mass tort litigation is largely fueled by the increasing involvement of third-party funders. These investors provide the upfront funds necessary for advertising on various media platforms, engaging lead generation companies, and covering other costs associated with legal actions. From 2017 to 2021, Wall Street funding for this type of litigation more than doubled, resulting in a staggering $6.8 billion spent on 77 million television ads.

These substantial investments and the corresponding massive advertising campaigns help lawyers identify potential claimants and generate publicity for their cases. This can sway jury opinions and put additional pressure on defendant companies to settle. As a result, lawyers and investors often receive millions of dollars, while the individuals who should benefit from the lawsuits may only receive a few dollars each.

The economic burden of mass tort litigation is shouldered by the public at large, leading to inflated prices across various industries. Companies that provide consumers with products, including medicine, automotive manufacturing, and agriculture, must factor in potential liability damages when determining the cost of their goods. These costs add up, with annual tort expenses estimated to be nearly $500 billion, equivalent to over 2% of the US GDP.

The unregulated nature of the tort system enables unchecked abuses, with annual growth rates of 6% between 2016 and 2020. This results in a “tort tax” of approximately $1,300 per year for every American. The lack of accountability, particularly regarding anonymous third-party funders who manipulate cases, contributes to the unchecked growth of mass tort litigation.

Until lawmakers and regulators at both the state and federal levels recognize the significant economic impact caused by mass tort litigation and take action to address it, the financial burden will continue to be borne by all Americans.

In summary, mass tort lawsuits in the United States are becoming increasingly pervasive and financially burdensome. Despite some legitimate cases, many are driven by profit-seeking attorneys and rely on questionable evidence. The involvement of third-party funders and massive advertising campaigns further exacerbate the issue, resulting in inflated prices for consumers. A comprehensive review of the regulations governing the tort system is urgently needed to curb this economic drain on the public.