It is riddled with predatory actors and practices that take advantage of victims and drive up costs for consumers, families, and businesses. A combination of aggressive advertising, referral networks, and profit-seeking has created a badly distorted system where the victim can end up in more debt with worse pain than when they first called their lawyer.
The pipeline begins on the side of the road — and ends in someone's mailbox, weeks later, as a stack of bills they never agreed to.
The American legal system was designed to protect victims. In too many corners of the country today, it has been turned into a high-volume business model that prioritizes advertising spend over outcomes and turns vulnerable accident victims into customers for a downstream network of preferred medical providers and litigation financiers.
This is how the system works, from start to finish.
The journey begins with a flood of TV, digital, print, and billboard ads — totaling $2.4 billion in 2023 — professionally designed to attract as many potential clients as possible. These ads lure victims, often in a highly vulnerable state, into the system. Studies have shown these ads target low-income groups and minorities, and that plaintiffs who hire billboard attorneys often end up with smaller net payouts and delayed settlements.
Billboard attorneys instruct victims not to use their own insurance and instead direct them to medical providers or clinics the lawyers have a preexisting relationship with. Victims are pushed toward unnecessary medical treatments with higher bills, resulting in larger settlements to increase profits for lawyers and doctors. According to the American Tort Reform Association, “in some cases, lawyers will even recommend clients to doctors the lawyer has a relationship with, and those doctors often charge a much higher amount than a typical doctor might charge.”
A LexisNexis survey conducted in August 2023 found that 71% of personal-injury victims reported billboard attorneys encouraged additional and often unnecessary treatments. According to an investigation by KFF Health News, in one lawsuit a victim’s doctor “persuaded him to have multiple operations and during one tore a 1-centimeter hole through a nerve root, leaving him in extreme agony and excruciating pain.”
A Wall Street Journal investigation exposed the role that “lien doctors” play in the tort system. Billboard attorneys commonly steer victims to these lien doctors, who agree to treat patients without upfront payment, waiting until a lawsuit concludes to get paid. These arrangements often prohibit using insurance and saddle victims with inflated medical bills, even if they lose their case.
The ethics of doctors wheeling and dealing in patient bills and having a financial stake in the outcome of litigation has been questioned. An American Medical Association policy says such deals are unethical because ‘there is the ever-present danger that the physician may become less of a healer and more of an advocate or partisan in the proceedings.’
Billboard attorneys push victims into largely unregulated lien arrangements that cover everything from legal fees to medical costs, prescriptions, and transportation. Because these liens are largely unregulated, providers often inflate their charges. In extreme cases, the lien totals are greater than the settlement, leaving victims with crushing debt. Worst of all, there are examples of attorneys sharing ownership with the lending companies and lien providers, ensuring guaranteed profits while victims rack up debt.
In Florida, a plaintiff slipped and fell in a grocery store, requiring identical surgeries on each knee. For the first surgery, the plaintiff used health insurance: billed $19,000, total cost $3,400. The second surgery was performed under a ‘letter of protection,’ resulting in $59,000 billed and owed to the surgery center. Patients don’t benefit from insurers’ price negotiations and are responsible for inflated medical costs.
After attorney fees, interest on liens, and inflated medical bills, many victims only receive a fraction of the payout they were promised. One Sedgwick study showed “lower average net settlement payments among claimants who hired attorneys versus those who did not.” Victims can end this process with new injuries from unnecessary medical procedures and varying levels of debt, alongside ongoing financial and medical burdens.
A young mother from the Bronx filed a medical-malpractice case after her newborn was injured at birth. Her attorney directed her to a lender who gave her a loan with a 65% interest rate, compounded by 1.5% every month. She later discovered the firm her lawyer recommended was owned by the attorney’s brother.
Many individuals victimized by these predatory practices have sued their lawyers, doctors, and financing firms for malpractice and billing fraud. Their lawsuits detail how these practices worsened their injuries, both financially and physically.
Annual per-household cost
of America's broken U.S. legal system, paid by every family.
Source: Institute for Legal Reform (ILR), 11/24
Total cost to the U.S. economy
of America's broken legal system in 2022 — 2.1% of total GDP.
Source: Institute for Legal Reform (ILR), 11/24
Billboard-lawyer ad spend
spent in 2023 on 26 million+ TV, radio, print, and billboard ads across the U.S.
Source: American Tort Reform Association (ATRA), 3/24
Staged crashes, captive clinics, and the country's highest auto premiums — the full pipeline, documented in one state.
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