Originally published on Responsible Advertising for Patient Safety
Exposing the Litigation Financing, Advertising and Gaming Techniques that Are Threatening American Health Care
Medical device manufacturers are increasingly targeted by a mass tort generation machine of unprecedented size and scope. A too hidden network of financiers and claim generators fund TV, radio, internet, and social media ads to recruit large numbers of potential plaintiffs. The lawyers then leverage the sheer number of filings, regardless of the merit of each claim, into consolidated proceedings and pressure companies into mass “inventory settlements.” They are manufactured purely to feed a business model that takes advantage of the civil justice system.
This piece shines light on this mass tort generation machine against medical device manufacturers, explaining how it works and cautioning against the impact it is having on American healthcare.
Investment Capital Funds the Generation of Mass Tort Litigation
As the New York Times exposé How Profiteers Lure Women into Often-Unneeded Surgery found, mass tort litigation, particularly against medical device manufacturers, is now “fueled by banks, private equity firms and hedge funds.” These financiers inject huge amounts of investment capital into generating litigation, a new phenomenon that is responsible for the recent explosion of lawsuits over many medical devices and prescription drugs. They generate “immense” profits by funding mass marketing campaigns to recruit plaintiffs and lawyers to litigate the claims.
Third Party Litigation Financing, as this new financial sector is called, is a multi-billion dollar industry that is growing exponentially. There are now at least 30 firms dedicated to litigation financing, with start-ups regularly entering the market to finance personal injury, class actions, business disputes and other types of cases.