fter Texas trial attorney Tony Buzbee took to a podium in October to reveal he had gathered 120 victims to sue Sean “Puff Daddy” Combs, it unleashed a flood of more allegations against the billionaire rapper and record executive. There are now close to two dozen civil lawsuits pending against Combs in both federal and state courts, along with his criminal indictment for sex trafficking, assault, and a host of other charges that could land him in jail for life.
While the criminal trial will take some time, the civil lawsuits by alleged victims and rockstar lawyer Buzbee will likely bankrupt the “Diddy” empire, owing to their severity and the sheer number of cases making their way through the court system. The blow to Combs will only worsen once a court grants class status to the victims. Rightfully so.
The speed and efficiency by which Buzbee was able to recruit plaintiffs and alleged victims for these cases hinged on an elaborate advertising campaign using targeted Instagram ads and chatbots across the Internet to get more people to come forward. This method of seeking plaintiffs for civil litigation is not new by any means, but it is becoming exponentially more effective in cases brought by lawyers representing those who have been allegedly harmed by companies or individuals. These cases tend to be more categorically frivolous, unlike what’s happening with Diddy
Entire websites and newsletters exist to alert subscribers to dozens of class action lawsuits they can sign up for if they believe they’ve been wronged. One example is a mass tort lawsuit filed against the fintech firm Cash App, after it was revealed a former employee accessed certain accounts without permission.
Rather than adjudicate claims in court, the company chose to offer a settlement of $15 million to anyone who may have been affected. Ads are claiming participants can “automatically” receive up to $2,500 without much proof they were harmed at all, while the attorneys will get 25 percent of the final settlement. The lawyers’ cut could reach $5 million if the court also grants “remedial” relief.
These kinds of cases are the bread and butter of a select class of mass tort litigation lawyers who purposefully seek out high-profile cases. Because lawsuits are routinely expensive and drain the reputations of firms that may or may not have done anything wrong, many companies choose to offer settlements and skip a trial.
And because the United States does not impose a “loser pays” principle on attorneys and parties who file cases, as in other countries, the incentives for cases that go far beyond negligence or any wrongdoing are ripe. Matters are made worse by deceptive advertising claims that artificially increase the size of affected “classes” of victims.
This rigamarole has the effect of elevating many frivolous cases at the expense of ones with real documented harms, forcing companies to beef up legal departments and raise prices to accommodate the threat of future litigation. We all pay a price for this culture where mass tort litigators are also mass advertisers for back-to-back ads on late-night TV.
Between 2017 and 2021, 77 million ads for legal services aired on television to try to recruit potential plaintiffs for cases, costing a total of $6.8 billion.
Much of the seed money that pays for this advertising comes from outside, third-party financiers who have no involvement in the legal issues surrounding the cases. They are hedge funds, university endowments, or other types of money managers who are simply looking for a good return on their investment. In 2021, more than $10 billion in financing capital was distributed from investors to law firms for this very purpose.
This third-party litigation finance boon offers investors a slice of the pie of America’s highly litigious court system, all without checks or balances. And even more so if our airwaves and social media feeds are filled with legal ads.
Luckily, there are some reasonable measures U.S. lawmakers could implement to help slow the runaway train of lawsuits and deceptive ads recruiting for weak cases.
In Florida, West Virginia, and Tennessee, states have clamped down on lawyers making unsubstantiated medical claims in their legal ads, while Louisiana has mandated that lawyers be upfront about the fees they’ll collect from settlements.
In Congress, Rep. Darrell Issa (R-CA) has introduced the Litigation Transparency Act to force disclosure of any third party who stands to financially gain from an outcome in civil trials.
The Federal Trade Commission, for its part, could also refocus its efforts on protecting consumers from deceptive legal advertising, as they have done for fake reviews and scam crypto influencers.
America has a justice system that is the envy of much of the world, so we need to ensure there are safeguards in place to protect us when legitimate harm is done while keeping bad actors at bay. Putting reasonable limits on ads would go a long way.
Originally published here
