Expert: ‘Unceasing Onslaught’ of Legal Ads Worth Insurance Industry Attention

Often alarming, misleading or just plain annoying — when mass tort lawsuit advertisements pop on a TV screen, many consumers instinctually reach for the remote. An expert believes that the ads are worth your attention.

“Especially for those in the insurance industry, ignore them at your own peril, your own risk,” said Rustin Silverstein, president and founder of X Ante, a legal services company that shares data and insights on the forces driving the increase in mass tort litigation.

An ‘Unceasing Onslaught’

The Travelers Institute, the public policy and education arm of Travelers Insurance, recently hosted a webinar that explored the surge in attorney advertising encouraging consumers to pursue mass tort lawsuits.

During the event, Silverstein shared that last year, an estimated $1.2 billion was spent on TV ads by lawyers and others soliciting clients or offering legal services. More than 16 million advertisements ran last year.

Or, as Silverstein described it, an “unceasing onslaught.”

To put that number in context, about 45,000 TV ads by lawyers and others soliciting legal claims aired across the United States every day. That works out to about 1,900 ads per hour, or about one lawyer ad airing on television every two seconds.

General auto accident, slip and fall, and personal injury advertisements accounted for about $1 billion in spending, while a selection of more specific topics totaled $152.3 million. Some of these specific mass tort ads target prescription drugs, medical devices, specific consumer products, natural disaster insurance claims and more.

“I think one thing to understand about those lawyers and others who solicit these advertisements is that they will always be shifting their topics,” Silverstein said. “They’re always going to look for what is the most likely to bring … the most lucrative cases … . So, they’re constantly shifting the targeting of their advertising, and that’s something that we monitor.”

Advertising Drives Financial Rewards

“There is a lot to be gained by airing these ads,” Silverstein said.

Plaintiff firms that place these advertisements collect between a contingency fee of 25% and 40% from the rewards or settlements they receive, Silverstein said, and in the past 10 years or so, about 2,000 advertisers have sponsored ads related to mass tort.

Only about 15 of those advertisers account for half of all the ad spending, though, and a third of those top-spenders aren’t even law firms — they’re for-profit lead generation companies that exist to generate and sell claims to law firms. Third-party litigation financing is also increasing and has been an attractive proposition, Silverstein said, because returns have been high.

“These advertisers are very sophisticated,” Silverstein said. “They are direct marketers. So, when they see that particular ads will generate what they consider quality leads, quality clients, they will continue to invest in that. They will continue to advertise around it. And then, of course, when they get positive developments in litigation … that will only fuel the fire and the interest in advertising in that particular topic.”

When it comes to verdicts and settlements becoming more expensive in general, Silverstein believes “that a lot of it is driven by this attorney advertising,” he said. “People see these ads, and it drives them to file more claims.”

He added that this advertising not only generates thousands of lawsuits, but it also pressures insurers and defendants into settlements due to the cost of litigation that never ends because of the large volume of cases and the risk of damage to reputations.

Also, when consumers see enough ads about a company, it begins to change their perception, Silverstein said, translating to impacts on bottom lines and stock share prices. It also influences people who sit on juries about what’s a fair outcome, Silverstein said of the ads.

“I’ll just conclude with saying that I think these ads are ignored at your own risk,” he said. “If you are involved in one of these industries that’s targeted, you will probably face greater consequences. And what we argue with our clients is the more you can stay on top of what’s happening with this advertising, the better prepared you can be to address these issues as they come up.”

Practical Steps and Key Takeaways

Silverstein outlined three clear values of tracking mass tort advertisement data for insurance industry professionals. The first is the litigation risk component. From an underwriting perspective, are potential policyholders already vulnerable?

“These legal ads are like the canary in the coal mine,” he said. “You will see them before you’ll see the lawsuits being filed. So, before you write a policy for somebody who has a product in the market or may be vulnerable to potential litigation, you can see, have there already been ads run against them on this topic?”

When it comes to managing claim volumes, the ads can “also be a good proxy for what’s coming,” Silverstein said. “If we’re seeing a lot of lawsuits, is this going to continue for the next year, two years, five years? Well, the lawyer advertising will tell you that. If the ads continue to stay on TV and stay out there, you can expect more lawsuits to follow.”

Monitoring the ads can also be helpful, he said, because studying them can give insurers a sense of who is behind the lawsuits — and who they may face on the other side of the negotiation table. In addition to that, they can help identify parts of the country that are susceptible to advertising and high verdicts and awards.

It’s a bit early to determine the effect of artificial intelligence on ad targeting, Silverstein said, but he believes AI will probably be utilized to streamline the potential client intake process firms have to go through early on in this process. He also sees AI being utilized to develop and tailor their messaging. Because so many of these ads are running, attorneys are constantly competing, Silverstein explained, and they’re “always looking for new technology, [a] new approach to help them in this kind of never-ending competition.”

A Parting Thought

During the webinar, Stef Zielezienski, executive vice president and chief legal officer of the American Property Casualty Insurance Association, pointed to Florida as an example of light at the end of the tunnel.

Last year, Florida Gov. Ron Desantis signed comprehensive legal reforms into law that aimed to “decrease frivolous lawsuits and prevent predatory practices of trial attorneys who prey on hardworking Floridians,” according to a press release shared on the governor’s official website.

The bill “modifies the bad faith framework, eliminates one way attorney’s fees and fee multipliers and ensures that Floridians can’t be held liable for damages if the person suing is more at fault,” the release said.

Zielezienski shared that effectively highlighting the disconnect between the percentage of claims versus a high percentage of lawsuits “was really what opened the eyes of those that were probably skeptical to reform.”