New research shows that unexamined bogus lawsuits raise costs for all Americans and undermine confidence in justice.
Washington – A new report released by the American Tort Reform Association reveals the alarming prevalence of fraud plaguing the nation’s civil courts and outlines solutions to combat the abuse.
“Frozen litigation and fraud in the courts undermines trust in the civil justice system and hurts litigants, small businesses and everyday Americans,” said Tiger Joyce, president of ETRA. “Litigation overreach leads to higher costs for everyone, while those with legitimate cases may see justice delayed or compensation lost when settlement amounts are affected by unsupported mass tort claims.”
The cost of additional litigation in the United States is $367.8 billion annually and results in a “tour tax” of $1,666 per person, or $5,215 per family.
The report categorizes questionable litigation files into two main buckets:
- Personal injury claims from auto accidents or falls. and,
- Massive torturing litigation.
Massive torturing litigation
The number of mass tort cases in federal courts has nearly doubled over the past 10 to 15 years, with multidistrict litigation accounting for 65-71 percent of all federal civil cases. This increase has been fueled in part by litration studies and, in some cases, the MDL has accused the drug of outright fabrication of evidence. This flood of filings has been further fueled by aggressive legal advertising campaigns urging individuals to “call now” despite limited or no screening to ensure the validity of claims.
Similarly, after junk science reports and legal advertising linked disorders linked to prenatal Tylenol use, a massive MDL was created, a case pending in the Second Circuit.
A Federal Advisory Committee on Civil Rules has estimated that 20-50% of claims in the MDL are ultimately “unverified,” meaning there is no documentation that the plaintiff used a particular product or developed a medical condition or other injury that is the subject of the litigation.
Regardless of whether the claims have merit, defendants spend millions trying to get cases reviewed, despite the pressure to resolve vast inventories of filings. en mrs. Sometimes, it is only during the process of distributing settlement funds that it is revealed that many plaintiffs do not have valid claims.
Personal Injury Claims
In addition to mass torts, personal injury lawsuits alleging vague “soft tissue” injuries — such as sprains, strains, or muscle strains — are particularly susceptible to exaggeration and outright fabrication.
ETRA’s report highlights numerous examples of widespread, organized fraud schemes in states such as New York, California, Florida, Pennsylvania, Louisiana, and New Jersey. The schemes involve a variety of staging accidents and often expensive and unnecessary medical treatments with inflated bills to run up insurance claims, settlement demands, and damage awards. In some instances, vulnerable people are recruited to participate in the schemes by pretending to be involved in accidents and undergoing painful procedures, lured by the promise of a large payout.
Enforcement, accountability, and reform
The report outlines a number of solutions and recommends a multi-pronged approach. In recent years, some businesses have combated fraud using civil actions under the Racketeer Influenced and Corrupt Organizations Act.
However, ETRA notes that RICO actions, false claims actions, and other civil claims brought by businesses are a last resort and indicate a complete failure of the system. In which civil procedure, the attorney disciplinary system, and even law enforcement rules have failed.
Instead, a combination of enforcement by U.S. attorneys, disciplinary actions by judges, and strengthening civil rules could reduce the rise in fraudulent filings.
The full report, titled “Acceptable,” is available at atra.org.
About the American Tort Reform Association
Founded in 1986, ATRA is a non-profit, non-profit organization and the first organization in the country exclusively dedicated to reforming the civil justice system through education and legislation. ATRA serves as a nationwide network of state-based accountability reform coalitions supported by 154,000 grassroots advocates. ATRA works to bring greater fairness, predictability, and efficiency to America’s civil justice system. These efforts have resulted in the enactment of state and federal laws that make the system better for everyone.
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