Introduction

1. The U.S. tort system has historically been regarded as a central mechanism for civil accountability within the American legal framework. Its design enabled individuals to seek redress against more powerful entities, with the jury system functioning as an institutional check on potential abuses of judicial authority. Contingency fees allowed individual plaintiffs of limited means to sue even if they could not afford legal fees up front.
2. But over time, rather than being a tool to deter dangerous behavior by corporations with doctrines such as strict liability and class actions, it has become a business in which plaintiffs’ law firms enrich themselves because of the inequitable system of incentives that have emerged. In effect it has become a monstrous taxation upon the vitality of American business.
3. The downside risks of taking a meritless case to trial versus settling, the increasing frequency of so-called nuclear verdicts, the advent of litigation funding as an “alternative asset class” especially from abroad, ubiquitous advertising by plaintiffs, and questionable behavior by both plaintiffs’ lawyers and courts in certain jurisdictions, have created a perfect storm overrunning much of corporate America.
4. It can be said that the modern U.S. tort system is more akin to game theory, or “the prisoner's dilemma”, in which the downside risk of being the last man standing at trial is enormous relative to the cost of a settlement. The tort system, rather than being a place where justice and the law are close siblings, has become one in which they can be more likened to distant cousins, not really on speaking terms.

Dynamics of the Tort System

5. The general dynamics of the tort system involve a relatively small number of plaintiffs’ firms operating in a relatively small number of jurisdictions, suing a large and increasing number of corporate defendants. Based on KCIC’s 2024 asbestos data, 48% of all filings were in one of three jurisdictions in the state of Illinois (Madison, St. Clair and Cook counties) and the top five jurisdictions received 63% of all complaints. The top five plaintiffs’ firms filed 51% of the complaints, with the Gori firm alone responsible for 20% of the total.  On average, 75 defendant corporations were named on the complaints with some complaints naming over 400 defendants.  And over 12,000 defendants were named on asbestos complaints in 2024, over 2,000 of them for the first time.
6. Most complaints are dismissed for no value or settled prior to trial. Very few even start trial, and even fewer go to a verdict. Most plaintiffs, most of the time, retain counsel on a contingency fee basis agreeing to share a percentage of any settlements or awards, with the plaintiff absorbing all litigation-related expenses.
7. The mitigating effect of paying the costs of litigation should have a dampening effect on the propensity of plaintiffs’ firms to file frivolous lawsuits and to name companies that have only a tenuous nexus to the injured plaintiff. The emergence of litigation funding as an alternative asset class in recent years has significantly altered this calculus by sharing the downside risks with plaintiffs’ law firms albeit at a reduction in the upside.  The wash of plaintiff advertising over the airwaves in recent years is a result of the abundance of private equity money chasing new plaintiffs to enroll with their partner law firms.

Over Naming

8. The Federal Rules of Civil Procedure such as Rule 11 and their state court analogs ought to prevent frivolous filings, require a plausible factual nexus from the defendant to the claimed harm, provide an early opportunity to dismiss improper suits, and exact sanctions upon lawyers who fail in their ethical duties as attorneys. This does not describe the realities of the modern U.S. tort system.
9. Asbestos litigation, even 25 years ago, was described as “the energizer bunny of toxic torts”, continues to exact a toll on American businesses. In 2024 over 12,000 individual corporate entities were named on asbestos lawsuits according to KCIC’s data, over 2,000 of these were named for the first time, as plaintiffs’ law firms cast ever wider nets in their search for solvent pockets and their insurance policies to pay for their business model.[1]
10. KCIC processed 3,551 asbestos-related complaints filed in 2024 by plaintiffs who were diagnosed with mesothelioma or lung cancer. The average number of individual defendants named on these lawsuits was 75. The numbers vary a lot by jurisdiction and by plaintiff firm.  We have processed complaints with over 400 defendants.  But simple math, using the overall average of 75 and the total lawsuits filed computes to over a quarter million defendant actions.  In other words, defendant corporations in 2024 had to instruct defense counsel to initiate a defense over approximately 266 thousand times.  At minimum, this means that a defense firm in the relevant jurisdiction must open a claims file, make an appearance, and at the very least, move to dismiss the case. The defense costs alone for a target defendant who is dismissed 100% of the time are considerable.

High Dismissal Rates

11. The corollary of over-naming is the high dismissal rates experienced by most defendants. A dismissal, for this purpose, is defined as a case that is dismissed for zero payment versus a settlement where it is dismissed for a payment. While there are no publicly available data tracking dismissal rates by plaintiff, from personal experience with KCIC clients, I can state that most defendants achieve dismissal rates above 50% most of the time.  Higher dismissal rates than those are also common.
12. The most common reasons for dismissals are factual ones, the product was not present at the site of the claimed exposure, or the defendant never manufactured a product of the type named as the cause of exposure. This is a reason why defendant companies are well advised to work up their factual defenses as soon as they begin being named.
13. Many defendant companies negotiate administrative agreements with plaintiffs’ firms in certain jurisdictions to keep their names out of filings and to mitigate legal fees. Under these agreements, plaintiffs’ firms may agree to no longer name a defendant under the circumstances that always give rise to a dismissal, but to a negotiated settlement number for other cases that would survive motions to dismiss, either in the aggregate or individually.
14. While dismissing a claim for zero payment may appear to be a pleasing outcome for a defendant, the only good that can be said is that it is better than paying a settlement or taking a verdict. The simple naming of the defendant will encourage other firms to name the defendant. It is well accepted by plaintiffs’ firms that a certain number of dismissals are to be expected if they are doing their jobs properly.  There is also the downside that these meritless cases and dismissals are often bundled together as leverage in larger settlements, enabling plaintiffs to secure more favorable outcomes than they otherwise would. But a dismissed claim costs the defendant thousands of dollars in legal fees to obtain the dismissal.  It is certainly no species of victory.

The Rise of Nuclear Verdicts

15. The reality for any defendant in the dysfunctional mass-tort jurisdictions of this country is that it is the outlier cases that drive behavior in the tort system. A defendant that goes to trial and suffers a plaintiff’s verdict is forever on the map as a target defendant. The magnitude of the verdict may prove inflationary to their settlement values and ability to obtain dismissals in other cases. It is all very well that a verdict may be reversed or reduced on appeal, but by then the damage is done (as it costs companies millions in defense costs to reach that point).  Regardless of the strength of medical causation or other defense arguments, only a small percentage of mass tort complaints are in fact litigated to verdict.  It is a fact that plaintiffs' counsel put their strongest cases forward for trial.  That is only logical. Even though those cases may not be representative of the plaintiffs’ firm’s inventory, they set a precedent for how the remaining cases will be treated.
16. Plaintiffs’ verdicts in excess of $10 million have become referred to as “nuclear verdicts” and have an outsize effect on the dynamics of the tort system. In fact, their effect is hard to exaggerate. Verdicts of this size are on the rise. Some truly mega verdicts such as the $4.7 billion Ingham talc case against Johnson & Johnson by a group of 22 plaintiffs (later reduced to $2.2 billion after appeals were exhausted) play an outsized role in the civil justice system and can have a devastating impact on business, entire industries, and society at large.  Even when a verdict is later thrown out or substantially reduced upon appeal, the headline verdict from the court of first instance remains motivating to plaintiffs’ lawyers, resulting in increased filings and higher settlement values.
17. The footnoted article from the Institute for Legal Reform provides excellent additional analysis and references. [2]

Litigation Funding

18. In the typical dynamic, plaintiffs’ lawyers are compensated on a contingency fee basis. This means that they absorb the full costs of litigation on behalf of their client and only paid in the event of a verdict or settlement. Typical percentages of the settlement or verdict dollars that are taxed by the law firm are in the 25-40% range.  Very few cases are actually tried to verdict, and the law firms may achieve a payout with only relatively modest outlays.
19. Fairly obviously, this dynamic introduces an incentive to plaintiffs’ lawyers to recruit as many plaintiffs as possible, to demand and settle for the highest figures they can get away with, and to name every potential corporate defendant that might conceivably offer a dollar settlement. These incentives are somewhat dampened by the necessity of initiating litigation and potentially pursuing it and even reaching a defense verdict in which they are paid nothing after considerable litigation expenses.
20. The downside risks to the plaintiff lawyer are relatively modest relative to the prospect of a nuclear verdict. But they do nevertheless require a not insignificant capital investment proportionate to the size of their practices. The presence of litigation funding completely alters these dynamics and effectively removes or mitigates the downside risks.  Litigation funding has emerged over recent years as an alternative asset class in which private equity investors commit a small portion of their portfolios to funding such litigation.
21. Third party litigation funding by private equity, in which investors such as hedge funds and family offices finance legal action against corporations, was estimated at $17.0 billion in 2021 and forecasted to reach $31 billion by 2028.[3] Approximately 66% of this capital is invested in portfolio litigation, primarily mass tort cases.[4] The U.S. is the world’s largest third-party litigation funding market, which is a strong contributing factor to the growth in mass tort litigation and to social inflation in verdicts. The downside risk of unreimbursed costs of litigation for plaintiffs’ firms is significantly mitigated by risk sharing with such investors. 
22. Recent reporting by the Wall Street Journal opinion page draws attention to the significant presence of non-domestic funding of litigation and the inequitable tax treatment for overseas investors. [5] The editorial notes that average returns on litigation financing averages 25%. But litigation funders pay tax on these returns at the capital gains rate of 23.8%, while the actual plaintiffs pay at their ordinary income rate.  However, foreign investors are exempted from paying even capital gains tax—and, as reported by Bloomberg Law, they may be an investment vehicle by which Russian oligarchs dodged sanctions while harming American business interests. Despite its scale, litigation financing remains largely unregulated, with investments often hidden from courts and opposing parties, which is an issue that should raise significant concerns among regulators and stakeholders.

Plaintiff Advertising

23. One direct consequence of third-party funding is the increasing plaintiff advertising which has, in recent years, become ubiquitous in mass media. [6] The public is inundated with advertisements on television and the internet soliciting them to file lawsuits.  The American Tort Reform Association (“ATRA”) estimated that more than $2.5 billion was spend on advertising across all mediums in 2024 alone, a total of $26.9 million individual advertisements.  They go on to estimate a 39% increase in spending between 2020 and 2024. [7]
24. A review of plaintiff firm TV advertising by lawyers and other solicitors shows a dramatic rise in spending, which reached an estimated $1.2 billion in 2023. The volume of ads has similarly surged, with more than 16 million ads aired in 2023 (up from just 3 million in 2005). Among all types of legal advertising, asbestos/mesothelioma claim the top the list, accounting for approximately $50.6 million in TV ad spending in 2023 alone.[8]
25. The Cost Per Click (“CPC”) prices on Google have long provided an insight with “mesothelioma” being the bellwether word. It was historically the top-priced Google Ad term, commanding close to $100 all the way back in 2009 and averaging $185-$216 from 2014-2018. [9]
26. The following table shows that in 2025 “mesothelioma” has lost its top spot in the Google keyword charts but is still in a solid second place.

“Judicial Hellholes”

27. One of the most troubling aspects of the American tort system is the emergence of so-called “judicial hellholes”—jurisdictions where courts are perceived to systematically favor plaintiffs, particularly in high-stakes civil litigation. According to the American Tort Reform Association (ATRA), these venues are characterized by plaintiff-friendly judges, excessive jury awards, lax evidentiary standards, and a pattern of forum shopping that attracts lawsuits with little or no connection to the jurisdiction. ATRA, through its regular reporting, in particular draws attention to the political donations from plaintiffs’ firms to Illinois politicians and judges, over $35 million over a 15-year period. [10]
28. As noted earlier, counties such as Madison and St. Clair in Illinois have become national magnets for mass tort claims, especially asbestos litigation, drawing thousands of cases annually due to their reputations for generous verdicts. The problem is further aggravated by the practice of over-naming defendants, where plaintiff firms routinely include parties with tenuous connections to the jurisdiction in order to manufacture a basis for venue and personal jurisdiction. Compounding the problem is the outsized political influence of the plaintiffs’ bar, which often makes substantial campaign contributions to judicial candidates in these same venues, raising serious concerns about impartiality and judicial independence. This dynamic undermines public confidence in the fairness of the civil justice system and distorts the intended purpose of tort law: to provide just compensation and deter wrongful conduct, not to facilitate litigation tourism or distorted justice.

The Broken Trust System

29. A parallel system of justice exists in post-bankruptcy 524(g) trusts. The plaintiffs’ bar, having broken multiple defendant companies, gets a second crack of the whip with the reorganization of the bankrupt company under section 524(g) of the federal bankruptcy code.
30. In the wake of the bankruptcy of Johns Manville and the wave of asbestos litigation that followed, Congress enacted these special provisions of the bankruptcy code to enable a reorganization of the debtor that preserved assets for the benefit of future claimants for which their asbestos-related diseased was not manifest at the time of the bankruptcy. It was a recognition of the nature of the long latency periods of so called “longtail” claims for asbestos-related disease, especially mesothelioma.
31. Under section 524(g) plaintiffs’ firms play an outside role in the debtor’s reorganization, plan design, and voting process. They then go on to oversee the administration of section 524(g) post-bankruptcy trusts in that the boards charged with their oversight are populated entirely with plaintiffs’ counsel. For years, courts, scholars, and law enforcement authorities have lamented the lack of transparency and oversight over these trusts, which operate in the shadows.
32. There is a basic bargain struck between debtors and claimants in the use of section 524(g):
    1. Efficiency. Claims processing resulting in the compensation of plaintiffs is significantly faster than can be obtained in the tort system, which may be a lengthy, intrusive and stressful process.
    2. Different Evidentiary Standards. Section 524(g) trusts receive and pay claims according to evidentiary standards that may differ from those which apply in the tort system – although evidentiary standards in the tort system themselves are often in dispute by litigants and may be applied inconsistently from court to court.
    3. Legal costs. Parties save significant legal defense fees that would have been incurred in the tort system.
    4. Certainty. Once the automatic stay is operational and later, when a channeling injunction is in place, the debtor (and other protected parties) no longer faces the ongoing risk of massive jury verdicts and potentially ruinous punitive damages awards.
33. While these are laudable characteristics of the trusts, particularly the sharply lower costs of litigation, they have led to unwelcome results:
    1. Vastly higher volumes of claims are processed in the trust system than in the tort system due to lower friction costs and easier evidentiary standards.
    2. Many trusts can afford to only pay small percentages of their scheduled values.
    3. Proportionally much less money goes to claimants with the most serious diseases than those who are in the tort system.
    4. Inadvertently designed incentives have encouraged fraudulent behavior by plaintiffs’ firms.
    5. Unfavorable tax treatment means that a low long-term return on invested assets prejudices the treatment of all claimants, especially futures.
34. The contrast between the two parallel systems is stark. Combustion Engineering, a major maker of industrial equipment, filed for bankruptcy due to overwhelming asbestos-related liabilities and established a trust in 2006. Since then the trust has continued to receive and process claims. In 2024, the trust received 28,869 new claims—more than seven times the filings observed in the tort system. This can be further segmented into 9,924 Category A Claims (malignancy claims and severe asbestosis) and 18,945 Category B Claims (other non-malignancy claims).[11] Meanwhile, in 2024, the tort system observed 3,627 malignant filings and 304 non-malignant/unknown filings.[12] While Combustion Engineering has established valuations (scheduled values) for validated claims, the trust has a payout percentage of 20%. For example, a validated mesothelioma claim would be valued at $75,000, but the resulting payout would be $15,000.
35. The systems are parallel yet intertwined. When defendants exit the tort system and move to the bankruptcy trust system, there is a shift impacting the entire ecosystem. Bankrupt companies begin to fade from evidence in the tort system, further concentrating litigation volumes and costs on the remaining solvent defendants and pulling in new entrant defendants. In the bankruptcy system a greater percentage of trust assets are paid out to non-malignants due to the lower evidentiary standards and transactional costs provided by the trusts. These claims would have an uphill battle to receive any compensation in the tort system.
36. Further challenging the balance, it is well-documented that claimants will make assertions of exposure in their trust claims that are contradictory with their previous claims in the tort system.[13] This is why many states have instituted transparency laws that require asbestos plaintiffs to disclose their trust claims in discovery in the tort system.[14] In addition, it is also why the DOJ has sometimes intervened in the formation of trusts to ensure there are protections in place. However, in recent developments, a group of 10 trusts have indicated that they plan to destroy all claims records more than a year old post-relief.[15] Some interpret this to be a transparent attempt to bury the evidence that could be used against the claimants in their parallel tort litigations.

Conclusion

37. The American tort system has lost its way. The behavior of plaintiffs’ lawyers is best understood through an examination of the incentives under which they operate. Likewise, the behavior of defendant corporations can be best understood through the incentives under which they operate.  The result is a gross miscarriage of justice best described as a business, a corrupt business, for which the Racketeer Influenced and Corrupt Organizations Act of 1970 may be the most effective remedy.

[1] KCIC reports the number of defendants based on the number of unique entities named on each complaint. For example, Company A as successor in interest to Company B and Company C would be counted as three unique defendant entities for purposes of this table.

[2] Nuclear Verdicts - Institute for Legal Reform

[3] Swiss Re Litigation Funding

[4] WestfleetInsider2023-Litigation-Finance-Market-Report.pdf

[5] WSJ Litigation Funding

[6] Institute for Legal Reform Plaintiff Advertising

[7] ATRA Legal Services 2020-2024

[8] Unpacking the Surge in Mass Tort Legal Advertising | Travelers Institute

[9] Kantar Google Keywords

[10] https://www.kcic.com/trending/feed/report-trial-lawyer-contributions-topped-35-million-in-15-years/

[11] https://www.cetrust.org/assets/uploadedFiles/57166627-13dd-4490-83d9-ccb527fbcd10.pdf

[12] In drawing a comparison between the tort system and Combustion Engineering, it is important to note that Category A claims include severe asbestosis claims, which would not be included in KCIC’s malignant claim counts.

[13] https://www.wsj.com/articles/the-double-dipping-legal-scam-1419535915

[14] Watching it Work: The Impact of Ohio's Asbestos Trust Transparency Law on Tort Litigation in the State - ILR

[15] https://www.wsj.com/articles/asbestos-defendants-seek-to-prevent-deletion-of-claim-records-33181b68