There is growing concern that many lawsuits filed in our nation’s courts are unsupported, involve manufactured or exaggerated injuries, or stem from outright fraud. These concerns arise primarily in two contexts: personal injury claims alleging injuries from automobile accidents or falls and mass tort litigation. Both are examined in this report. Unwarranted lawsuits reduce the public’s faith in the civil justice system while also causing concrete harm to litigants, businesses, and everyday people. As a result, drivers, homeowners, and businesses face higher insurance costs. And individuals who may have legitimate cases may see their compensation delayed or depleted when settlement money is siphoned by unsupported mass tort claims.
Personal injury claims alleging injuries from automobile accidents or falls often seek recovery for difficult-to-verify soft-tissue injuries. Some allegedly involve staged accidents. In both instances, claimants (sometimes at the direction of attorneys or with the participation of healthcare providers) reportedly ran up medical bills through unnecessary testing, physical therapy, and even surgeries, then demanded that businesses and insurers pay inflated amounts.
Evidence also suggests that mass tort litigation, in which many people claim injuries from the same product or practice, is beset with thousands of unsupported claims. That occurs because plaintiffs’ attorneys have an incentive to stockpile as many claims as quickly as possible. Doing so maximizes pressure on a defendant to settle the cases en masse—regardless of whether individual cases have merit—rather than litigate a never-ending number of trials, which is a costly and risky proposition. “Lead generating” companies and the plaintiffs’ bar spend hundreds of millions of dollars on television ads and social media to recruit plaintiffs. There is little screening, however, to verify that the person responding to an invitation to “call right now” for “substantial compensation” has a valid claim. Overwhelmed defendants and courts are incapable of examining the individual merits of each case.
This report highlights recent examples of such cases. Extreme cases, such as those involving staged accidents, have resulted in criminal prosecutions. An increasing number of companies are taking matters into their own hands, bringing civil racketeering actions against those who have allegedly colluded to bring fraudulent claims. In other instances, defendants are using the tools available to them in litigation to expose suspicious claims and seek sanctions or other judicial action.
More needs to be done. Legislatures and courts should strengthen rules that are intended to stop unsupported and frivolous claims, but are ineffective. Stronger safeguards are needed in mass tort litigation to ensure that when thousands of claims are filed, they have evidentiary support. And federal and local law enforcement should be more aggressive about investigating and prosecuting those who participate in making fraudulent claims.
