Trial Lawyers Are Wrecking the Bankruptcy System

Mass tort exposure has created an epidemic of bankruptcies, affecting organizations from Johnson & Johnson (talcum powder) to the Boy Scouts (sexual abuse). The way this process has unfolded is causing the federal bankruptcy system to come apart, harming the plaintiffs and bankrupt entities alike. Nobody benefits but the plaintiff lawyers.

Trial lawyers have found an opportunity to exploit the traditional bankruptcy claims process through the use of well-honed mass tort shakedown strategies. The scheme is simple but damaging. Plaintiff lawyers invest in a flurry of marketing through social media, TV and radio ads, often using professional “lead generation” companies, to identify the maximum number of potential tort claimants.