The American Tort Reform Association (ATRA), an organization dedicated to the reform of the civil justice system, has released a report outlining the tactics employed by trial lawyers in mass tort litigation. According to the report, these practices often involve third-party litigation financing (TPLF), reliance on questionable scientific evidence, and extensive advertising campaigns.
According to ATRA's report, TPLF is a practice where third-party investors, such as private equity firms and hedge funds, buy into the potential outcome of a lawsuit. The report indicates that TPLF has grown into a multi-billion-dollar industry. These investors supply the necessary capital for law firms in return for a share of any settlement. "The presence of an unknown third-party with a stake in the outcome of a lawsuit can change what is essentially a two-party negotiation into a multi-party process with a 'behind-the-scenes' influencer," said the report.
ATRA's document also revealed that some of this funding is channeled into advertising campaigns intended to draw more plaintiffs to class action lawsuits. It stated that over 77 million legal ads featuring law firms and mass tort were broadcast between 2017 and 2021 at an expense of $6.8 billion. "The reason trial lawyers pump significant money into these ad buys is because, armed with more clients, they can boost settlements and payouts when they go after large corporations," ATRA explained. "This leads to larger contingency fees for themselves." Moreover, according to a survey conducted by Trial Partners Inc., cited in the report, these extensive ad campaigns can sway juries.
The ATRA report also noted that these advertising campaigns sometimes propagate "junk science" which disseminates misinformation about product safety or efficacy. "Trial lawyers sometimes partner with so-called experts to provide misleading scientific evidence to support their claims both inside and outside the courtroom," it said. In certain instances, this kind of "evidence" has convinced consumers to discontinue medication due to fear incited by alarming advertisements. A 2019 FDA study found that some patients, after viewing a legal advertisement about blood thinner medications, stopped taking the medication, resulting in 66 adverse events, including seven deaths and 33 strokes.
ATRA is a nationwide network of state-based legal reform groups, as stated on its website. The American Council of Engineering Companies established ATRA in 1986 and was soon joined by the American Medical Association. ATRA operates at both state and federal levels to ensure fairness in the civil justice system.