Trial Lawyers, Inc.: Class Actions and Mass Torts

Lawsuits play a major role in the American economy: the direct costs of tort litigation alone are roughly one-tenth the entire health care sector, and that figure excludes various settlements and classes of litigation, as well as forgone research and investment and wasteful practices encouraged by litigation risk, including defensive medicine. “Trial Lawyers, Inc.” behaves like the biggest of businesses, as it generates cash from traditional profit centers (asbestos, tobacco, and insurance), explores potential growth markets (lead paint, mold, and regulated industries), and develops new products (such as suits against the fast-food industry).

The U.S. litigation industry’s top earners are those who represent large numbers of plaintiffs, either through class-action lawsuits or mass-tort product-liability suits. Trial lawyers have become more sophisticated in their strategies: rather than paying individuals to serve as plaintiffs, class-action lawyers now make perfectly legal contributions to politicians who control litigation for public-employee pension funds; rather than chasing ambulances to find clients, mass-tort lawyers have developed sophisticated marketing strategies that take advantage of the Internet and social-media platforms to attract the people whose claims constitute their books of business.

In some respects, things have improved since the Manhattan Institute launched its first Trial Lawyers, Inc. report in 2003: in addition to prosecutors stopping some of the worst frauds, the U.S. Supreme Court and other judicial decision makers have modified some rules for the better; state legislatures have continued to modify laws to deter litigation abuse; and Congress passed the landmark Class Action Fairness Act of 2005, which prevented class-action lawyers from shopping large national cases to the most favorable state courts.

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