America’s personal injury system is broken. 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.

This is how the system works, from start to finish.

• Aggressive Advertising: 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. Their goal is to maximize profit. 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.

• Preferred Providers, Conflicts of Interest: Billboard attorneys instruct victims not to use their own insurance and instead direct them to medical providers or clinics which the lawyers have a preexisting relationship with. These conflicts of interest negatively impact victims, who are then pushed toward unnecessary medical treatments with higher bills from these medical providers, 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.”

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.”

Dr. Scott Lederhaus, a retired California neurosurgeon who has reviewed personal injury cases for the defense, said some patients argue in depositions that under an LOP they never saw bills, so they had no idea of the extent of the medical costs they were incurring over time.

• Victim Exploitation: 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, the 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.’”

• Doctors Profit, Victims Suffer: 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. While this arrangement can boost damage awards (benefiting both the lawyers and doctors), it leaves patients financially vulnerable if the lawsuit does not succeed.

In a prime example, a plaintiff in a case in Florida slipped and fell in a grocery store, injuring both knees, requiring identical surgeries on each knee. For the first knee surgery, the plaintiff used health insurance, was billed $19,000 by the doctor and the total cost was $3,400. However, the second knee surgery was performed under a “letter of protection,” resulting in $59,000 billed by and owed to the surgery center.

Medical financing and utilizing letters of protection are similar in that the patient still finds themselves liable for the full amount billed even if they do not recover in the lawsuit. Patients don’t benefit from insurers’ price negotiations and are responsible for inflated medical costs.

• High Interest Debt, Hidden Costs, and Conflicts of Interest: Billboard attorneys push victims into largely unregulated lien arrangements to cover everything from legal fees to medical costs, prescriptions, and transportation to and from appointments. 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. One investigation found that dozens of victims “were later sued for payment of excessive fees” by doctors. 

Such was the case for a young mother from the Bronx, who worked hard during her pregnancy to ensure her twins’ needs would be met when they were born. Yet, despite all the preparations and precautions she took, one baby was injured during birth, resulting in severe brain damage. The mother filed a medical malpractice case, and the bills piled up. Her attorney directed her to a lender who gave her a loan with a 65% interest rate, which compounded by 1.5% every month.

Adding insult to injury, the mother later discovered that the firm her lawyer recommended was owned by the attorney’s brother. The court ultimately determined that the lack of knowledge of this relationship could be interpreted as a conflict of interest, since the attorney could have influenced his client’s acceptance of a settlement to his brother’s benefit.

Doctor Benjamin Chavis, writing in AfricanAmericanVoice.net

• Surprise Settlements and Mounting Debts: After attorney fees, interest on liens, and inflated medical bills, many victims only receive a fraction of the payout they were promised. One study showed that there were “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. They often are left with varying levels of debt, alongside ongoing financial and medical burdens.

• Victims Sue: 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.