Fear and greed.
These are the two emotions that can create the utmost unpredictability and volatility in the marketplace. We saw this play out in the panic buying and black market selling of toilet paper, hand sanitizer, medical-grade gloves, and sterilizing wipes during the early days of the Covid-19 pandemic. More recently, we’ve seen fear of inflation-fueled interest rates roil Wall Street.
But the pervasive effects of fear and greed aren’t limited to financial markets. They are the coin of the realm for the small segment of the plaintiff’s bar that specializes in mass torts—the enormous lawsuits that operate like an elaborate extortion enterprise that can bankrupt corporations and generate incredible revenue for the attorneys that engineer them (while the actual plaintiffs see little to none of the financial award).
These classic characteristics of the mass tort playbook were recently detailed by the Wall Street Journal. The Boy Scouts of America (BSA) filed for bankruptcy last year based on its potential liability for hundreds of legitimate claims of sexual abuse by some Scout leaders. At that time, the BSA was a defendant in 275 cases and had been notified of a potential 1,400 more.
That’s where the mass tort machine took over. The trial bar ran aggressive marketing recruitment campaigns—no doubt you saw them on TV, heard them on the radio, and were bombarded with them on social media—and invested in professional plaintiff aggregator firms (yes, there are actually companies that do this) to recruit plaintiffs. The ads followed a predictable and successful pattern: allegations of abuses or misdeeds, promises of generous payouts without ever stepping into a courtroom, and reminders that the clock is ticking and your time to join is limited so file your claim now.
The result: as of today, insurers working to settle the claims are now facing a collection of 95,000 plaintiffs and counting. Unfortunately, we will never know how many of those claims are legitimate—an important caveat because people that suffered incalculable damage are entitled to be compensated for that loss—and those merely trying to hop on the trial bar gravy train.
As we have seen time and time again, the quantity of the claims matter when it comes to negotiating these large settlements, not the quality or validity of them. Attorneys in mass tort cases only need one or two “winnable” cases to get organizations or corporations to the settlement table—and this is especially true when dealing with the so-called “toxic torts” on which the Center for Truth in Science has focused for the last year.
In our follow-up, we dig deeper into how the mass tort machine harnesses fear and greed to achieve its goals.