Unpacking the Surge in Mass Tort Legal Advertising

(SPEECH)
[MUSIC PLAYING] 

(DESCRIPTION)
A laptop appears with a title on its screen: Wednesdays with Woodward (registered trademark) Webinar Series. To the right of the laptop, a red mug features a Travelers umbrella logo. 

(SPEECH)
JOAN WOODWARD: Hi, good afternoon, everyone, and thanks so much for joining us. I'm Joan Woodward, President of the Travelers Institute, which is the public policy and educational arm of Travelers. Today we're going to do a deep dive into the world of attorney advertising.

Over the past two decades, advertising on television, radio, social media encouraging consumers to pursue mass tort law-- lawsuits really has surged. So for the next hour, we're going to explore the correlations between the rise of attorney mass tort advertising and increases in litigation and insurance claims and ultimately, really what it means for you as an agent or broker or a consumer. 

Before we get started, let's briefly review our disclaimer about today's webinar. 

(DESCRIPTION)
Text: About Travelers Institute (registered trademark) Webinars. The Wednesdays with Woodward (registered trademark) educational webinar series is presented by the Travelers Institute, the public policy division of Travelers. This program is offered for informational and educational purposes only. You should consult with your financial, legal, insurance or other advisors about any practices suggested by this program. Please note that this session is being recorded and may be used as Travelers deems appropriate. Wednesdays with Woodward (registered trademark) Webinar Series. Unpacking the Surge in Mass Tort Legal Advertising. Logos: Connecticut Business & Industry Association (C.B.I.A.), Center for Risk and Uncertainty Management at the University of South Carolina's Darla Moore School of Business. Travelers Institute (registered trademark), National Association of Professional Insurance Agents, TrustedChoice.com, MetroHartford Alliance, Insurance Association of Connecticut, American Property Casualty Insurance Association. 

(SPEECH)
I also want to give a huge thanks to our cohosting organizations today, and there's a lot of them. The National Association of Professional Insurance Agents, the Insurance Association of Connecticut, the Center for Risk and Uncertainty Management at the University of South Carolina Darla School of Business, the Connecticut Business and Industry Association, the MetroHartford Alliance, TrustedChoice.com, and the American Property and Casualty Insurance Association. So, thank you all to our wonderful partners. 

We're going to kick things off today with a fascinating opening presentation followed by a moderated discussion, then, of course, your questions. So please pop those in the Q&A feature at the bottom of your screen throughout the program.

(DESCRIPTION)
Text: Speakers. Joan Woodward, Executive Vice President, Public Policy, President, Travelers Institute, Travelers. Rustin Silverstein, -- President and Founder, X Ante. Stef Zielezienski, -- Executive Vice President and Chief Legal Officer, A.P.C.I.A. 

(SPEECH)
So for today's conversation, I'm joined by Rustin Silverstein, the President and Founder of X Ante, a leading source on awareness of mass-- a leading source on advertising, marketing and public awareness of mass tort litigation. 

Prior to founding the company, Rustin practiced law at a multinational law firm and worked for a global management consulting company. He also spent time on Capitol Hill with me working as a congressional press secretary and television news producer. I heard Rustin's presentation a few months back, and I just thought it was so fascinating that I wanted to bring it to our viewers here on our Wednesday session.

Also joining us today is Stef Zielezienski. He's Executive Vice President and Chief Legal Officer at the American Property Casualty Insurance Association or the APCIA. In this capacity, he oversees policy advocacy, legal communications, and really it's a holistic approach to public policy and thought leadership. They really are a powerhouse in Washington, D.C. He's also the staff lead on the association's most important policy goal, addressing and reforming the legal system abuse. Early in his career, he also practiced law at a national law firm, held clerkships at the U.S. Circuit Court of Appeals.

And now I'm really going to turn the floor over to Rustin for an opening presentation. And then Stef is going to join both of us for a moderated discussion. It's fascinating, folks. I hope you enjoy it. Rustin, take it away.

(DESCRIPTION)
Wednesdays with Woodward (registered trademark) Webinar Series, Travelers Institute (registered trademark), Travelers, X Ante Mass Tort Intelligence. Unpacking the Surge in Mass Tort Legal Advertising, March 13, 2024. Rustin Silverstein, X Ante, RS@x dash a n t e dot com. 2 0 2. 9 3 0. A N T E (2 6 8 3). www.x dash ante.com. Copyright 2024 X Ante LLC. All Rights Reserved. Copyright 2021 X Ante LLC. All Rights Reserved. 

(SPEECH)
RUSTIN SILVERSTEIN: Thank you, Joan. It's a pleasure to join you and your audience today. I'm always happy to present on this topic and share this-- our information with a new group of people. 

(DESCRIPTION)
Six lawyer ads read: "I.V.C. Filter Placed to Prevent Blood Clots?," "Knee Replacement Patients," "Hernia Mesh Warning!," "Stryker (registered trademark) Orthopaedics Suffered Complications," "Important News: Birth Control," and "Pelvic Mesh Victims 11 million dollar Jury Award." 

(SPEECH)
So today we are, of course, talking about lawyer ads, which I think all of our instincts when these come on the air is to reach for the clicker and change the channel as quickly as possible. It is no surprise that these ads are often alarming, misleading and always annoying. But what I hope to communicate today and share with you is why, although that may be the case, it is worth paying attention to them. And especially for those in the insurance industry, it is-- ignore them at your own peril, your own risk. 

(DESCRIPTION)
Logo: X Ante, The source for comprehensive data and analysis on litigation advertising and marketing. 

(SPEECH)
So first by way of background, as Joan mentioned, my company X Ante is the source for data and analysis on all mass tort litigation advertising and marketing. We've been doing this for about 10 years now. We've worked with all the corporate defendants and major mass tort litigation as well as investment firms, insurance companies, many others who have become interested in tracking this topic. 

(DESCRIPTION)
Text: What we cover. Television: 12 National Broadcast Networks, 80+ National Cable Networks, 8 Spanish-Language Networks, 210 Local Broadcast Networks. Online. Google: Search Advertising Pricing, Top Search Results, Number of Searches. Social Media: Facebook, Instagram, Twitter. Radio. Newspapers. 

(SPEECH)
We capture all the TV advertising on mass tort litigation advertising across the United States, across both national and local TV, cable and broadcast. We cover radio advertising, newspaper advertising. And of course, in the world we're living in, we're also tracking what's happening online, digital. That's Google search advertising pricing, search results, social media, Facebook, Instagram, Twitter. Trying to capture it all. 

(DESCRIPTION)
What you're up against: The unceasing onslaught. 

(SPEECH)
So before I get into why you should pay attention to this, let me give you a bit of context of what's going on out there. So it is, in fact, an unceasing onslaught. 

(DESCRIPTION)
A graph titled Total Legal Services TV Advertising features bars that represent the number of ads in 2005 through 2023 and an upward trending line that represents estimated ad spending. To the left, a table includes columns for Estimated Ad Spending and Number of Ads. In 2005, an estimated 393 million dollars was spent on 3.4 million ads. In 2023, an estimated 1.2 billion dollars was spent on 16.4 million ads, a 205% increase in estimated ad spending and a 382% increase in number of ads. Note: TV advertising data covers all airings of television advertisements on local broadcast networks in 210 media markets, nationally syndicated broadcast programming and on 11 national broadcast networks and more than 80 national cable networks. Estimated ad spending is estimated based on publicly available ad rates provided by media sellers and, since January 2019, transaction data from ad agencies and media buyers. Data are estimates and may vary over time. Our system reviews the database over time and edits it to account for duplicates or errors. Source: X Ante analysis provided by Vivvix C.M.A.G. 

(SPEECH)
Over the past nearly 20 years, as you can see, the estimated spending on this advertising has tripled to last year we estimate about $1.2 billion was spent on TV ads by lawyers and others soliciting clients or offering legal services. The number of ads has quintupled to over 16 million ads ran last year compared to over just about 3 million in 2005. And 16 million is a hard number to wrap your head around.

So to put that in context, that works out to across the U.S. there's about 45,000 TV ads by lawyers and others soliciting legal claims airing across the United States every day.

(DESCRIPTION)
Average Frequency of Legal Services TV Advertisements, 2023. 45,000 ads per day, 1,876 ads per hour, 1 Ad every 2 seconds. 

(SPEECH)
That works out to about 1,900 ads per hour, or about one lawyer ad is airing on TV every two seconds 24 hours a day, 7 days a week, somewhere across the United States. 

(DESCRIPTION)
What are the targets of the advertising? More topics across more media. Legal Services Ad Topics, 2023. General/accident/personal injury/other, includes auto accidents, slip-and-falls, medical malpractice, premises liability, and other personal injury, 1,012 million dollars. Environmental contamination, 59 million dollars, Asbestos, 51 million dollars, Consumer products, 22 million dollars, Agricultural products,

13 million dollars, Rx drugs, 12 million dollars, Medical devices, 8 million dollars, Insurance claims (natural disasters), 3 million dollars. 

(SPEECH)
And what are these lawyers going after? What are the targets of the advertising? So, the great majority of these ads are kind of the ads that we're all familiar with that we've seen. These are the general auto accidents, slip-and-fall, personal injury type claims. That accounts for about $1 billion in the TV ad spending. But then, and this is really what my company focuses on, is we also see a lot of advertising on particular topics. 

So in the last few years I'm sure you've all seen the Camp Lejeune ads. It's been a huge topic, and those are in the environmental contamination bucket. Of course, asbestos mesothelioma ads have been around for years. Increasingly, we're seeing ads on consumer products, agricultural products. Of course, prescription drugs, medical devices, and then perhaps of relevance to the audience today, a number of ads dealing with insurance claims largely surrounding natural disasters.

(DESCRIPTION)
Top Targets of Mass Tort TV Ads, 2023. Asbestos/Mesothelioma, 50.6 million dollars, Camp Lejeune water contamination, 46.7 million dollars, Firefighting foam (A.F.F.F.)/PFC contamination, 12.2 million dollars, Talcum powder, 9.4 million dollars, Roundup weed killer (glyphosate), 9.1 million dollars, Hair straighteners, 9 million dollars, Acetominophen, 5.1 million dollars, Pelvic mesh, 3.7 million dollars, Paraquat herbicide, 3.4 million dollars, Insurance claims (natural disasters), 3.1 million dollars. 

(SPEECH)
Just the last year, you can kind of see how it breaks down with all the different topics. These are particular topics of the mass tort ads. And I'm sure you're familiar with all of these. If you've watched any TV any time over the last year, I'm sure you've seen some of these ads. Just gives you a sense of the scope of what is out there and the diversity.

And I think one thing to understand about those lawyers and others who solicit these advertisements is that they will always be shifting their topics. They're always going to look for what is the most likely to bring us the most lucrative cases for us. So they're constantly shifting the targeting of their advertising. And that's something that we monitor. Who in fact are they targeting?

(DESCRIPTION)
Natural Disaster Insurance Claim Advertising. Text on four ads reads: "Don't face the insurance process alone. Get a team of experienced attorneys on your side," "Make your claims process easier," "Did Farmers deny or lowball your claim?" and "Hurricane Hanna Insurance Claim Denied or Delayed? Be sure your insurance claim isn't denied, delayed, or underpaid. We can help now!" 

(SPEECH)
And as I mentioned, we always see, in the wake of every natural disaster, we see a number of ads related to insurance claims. Don't accept what your insurance provider offers. Call us first. Get a lawyer. They're going to try to rip you off, etc., etc. And these are often quite inflammatory and designed to scare people who have suffered through these disasters. 

(DESCRIPTION)
Text: Natural Disaster Insurance Claim Advertising. 100% local advertising. Top Local Markets: 1. New Orleans, Louisiana, $887K. 2. Ft. Myers, Florida, $557K. 3. Honolulu, Hawaii, $245K. 4. Miami, Florida, $226K. 5. Harlingen / McAllen, Texas, $203K. A map titled Local Advertising, 2023 highlights these top local markets in red. 

(SPEECH)
And not surprisingly, this advertising is almost entirely local. And as you can see, this was last year. These are the top markets for these type of ads. And you can probably imagine what were the natural disasters that surrounded them. You had the fires in Hawaii. Of course, you have hurricanes in Florida, Texas, Louisiana, elsewhere. And so we continue to see a lot of this advertising in the wake of any kind of natural disaster when a case where there will be a massive number of insurance claims as a result. 

(DESCRIPTION)
Text: What is driving the advertising? No big surprise here. 

(SPEECH)
So what's behind this? What is driving this big increase in advertising and the increasing amount of money that's being spent on it? 

(DESCRIPTION)
Headlines: Baltimore jury awards record $229 million for brain injury during child's birth at Johns Hopkins Bayview. Ikea Will Pay $46 Million to Parents of Toddler Crushed to Death by a Dresser. Rise in 'nuclear verdicts' in lawsuits threatens trucking industry. Monsanto Loses 289 Million Dollar Verdict in Roundup Cancer Trial. Johnson & Johnson to settle metal-hip lawsuits for about 1 billion dollars, sources say. Endo To Pay $775M To End 'Virtually All Known' Mesh Suits. Text: Public domain photo source: needpix.com. 

(SPEECH)
Well, no surprise, it is the financial rewards. There is a lot to be gained by airing these ads. As you can imagine, plaintiffs’ firms who bring these advertisements, they will collect anywhere from 25, 30, 40% contingency fee from any rewards or settlements they receive. And these recent headlines just kind of affirm some examples of some of the big payouts that have happened recently. 

(DESCRIPTION)
Who is advertising? The answer may surprise you.

(SPEECH)
And the question then is, well, who's actually placing these ads? And the answer may not be exactly who you expect. 

(DESCRIPTION)
A billboard reads: Injured? Call the aggressive attorneys! Law Offices of S.K.G., The Schiller Kessler Group. Photo credit: Roy Katzenberg, flickr.com (Creative Commons). 

(SPEECH)
A lot of the ads are people like this. Kind of local law firms who put an ad on a billboard, the side of a bus, some local TV ads. 

(DESCRIPTION)
Top Mass Tort TV Ad Sponsors, 2012 to 2023. Over 2,000 mass tort ad sponsors since 2012. 15 advertisers accounted for more than half of the estimated spending on mass tort ads. Non-law firm advertisers accounted for 1/3 of the top 15 advertisers: Maune, Raichle, Goldwater Law Firm, Sokolove Law, Guardian Legal Network, Morgan and Morgan, Pulaski Law Firm, Knightline Legal, Davis and Crump, Ketterman, Rowland and Westlund, Akin Mears, Ferrer, Poirot and Wansbrough, Victims Justice Group, Gold Shield Group, Relion Group, Weitz and Luxe, and Other. 

(SPEECH)
And that, in fact, is a big part of the advertising. 

But in the mass tort space, it's actually fairly highly concentrated. And when I say mass tort, I mean those specific topics that I mentioned earlier. Prescription drugs, medical devices, specific consumer products, natural disaster insurance claims, etc. So you'll see over the last 10 years or so, there have been about over 2,000 advertisers who have sponsored ads related to mass tort, but only about 15 of them account for more than half of all the ad spending. And among those, about a third of them are not even law firms. They are what we call lead generation companies, companies that are for profit, and they exist to generate claims that they will then sell to or pass along to law firms that have contracted with them to get these claims.

(DESCRIPTION)
Text: Who is paying for this? The big money behind mass torts. 

(SPEECH)
And who's behind this? Who's paying for all these ads? Who's paying for this billion dollars of legal advertising every year? 

(DESCRIPTION)
Headlines: Hedge Fund Betting on Lawsuits Is Spreading, Bloomberg Business. Hedge-Fund Manager's Next Frontier: Lawsuits, E.J.F. Capital will lend to law firms pursuing injury class-action litigation, The Wall Street Journal. Litigation Finance Firm Raises $260 Million for New Fund, by William Alden, January 12, 2014, The New York Times. Private equity's latest investment? Lawsuits, Houston Chronicle. Hedge Funds Look to Profit From Personal-Injury Suits, The New York Times. 

(SPEECH)
Well, one big phenomenon we've seen over the last 10 years is increasing amounts of what's called third-party litigation financing. Those are outside groups, hedge funds, private equity firms, other investment firms who will actually invest in these cases. 

And they will pay law firms, or they'll help support the lawsuits or help pay for the ads in exchange for a share of later fees that come out of litigation or for just high-interest loans that they make to the law firms. And of course, for them, this has been a very attractive proposition, because the returns have been very high with the payouts from these settlements and jury verdicts, and also it's uncorrelated to the rest of the market. So it's become very attractive for investors.

(DESCRIPTION)
Arrows connect Gerchen Keller Capital, 100 million dollars, 16% interest to Akin Mears Law, 14,000 Transvaginal Mesh Lawsuits. 

(SPEECH)
Just one example of this that came up a few years ago. One of the major firms that was around, Gerchen Keller Capital, and this came out in a lawsuit that was filed, a public lawsuit. So we have some transparency in what happened. Loaned $100 million at 16% interest to a Texas law firm, AkinMears, which was a law firm technically, but really was more of a call center lead generator. And they used this $100 million to gather 14,000 transvaginal mesh lawsuits in that litigation. 

(DESCRIPTION)
So what? Why the litigation ad tsunami matters. 

(SPEECH)
So now we get to the question of so what? Why does this matter aside from perhaps being an irritation on the TV screen? Why should you pay attention to this? 

(DESCRIPTION)
Social Inflation. Headlines: The Specter of Social Inflation Haunts Insurers. Insurance executives' talk about bigger jury awards and increased litigation worry investors, The Wall Street Journal. What is social inflation, and why is it hurting insurance? Insurance Business America. The Inflation Specter Looms for Property/Casualty Insurers, Insurance Journal. Viewpoint: Social inflation pressures will intensify post-Covid, Insurance Day. 

(SPEECH)
Well, the big reason, and this is a term, I think, familiar with many of you in the insurance industry, is this concept of social inflation, which has become a big topic, a big headline for anybody who covers the insurance industry. It is a big threat that many are concerned about. 

(DESCRIPTION)
Text: "an upward creep in perceptions by an injured party of what they are owed, their willingness to pursue that via the legal system, and what that means for insurance policies covering companies' liabilities." The Wall Street Journal, December 27, 2019. "the phenomenon of unexpected rising insurance claim costs because of societal trends and views toward litigation." International Risk Management Institute (I.R.M.I.). 

(SPEECH)
And of course, there's many definitions. But the general idea is that a raising awareness or conception in society of what the payouts should be from insurance claims and how likely we should be pursuing litigation. And increasingly, it seems that this is leading to more and more expensive processing of insurance claims. 

(DESCRIPTION)
Headlines: Baltimore jury awards record $229 million for brain injury during child's birth at Johns Hopkins Bayview. Ikea Will Pay $46 Million to Parents of Toddler Crushed to Death by a Dresser. Rise in 'nuclear verdicts' in lawsuits threatens trucking industry. Monsanto Loses 289 Million Dollar Verdict in Roundup Cancer Trial. Johnson & Johnson to settle metal-hip lawsuits for about 1 billion dollars, sources say. Endo To Pay $775M To End 'Virtually All Known' Mesh Suits. Text: Public domain photo source: needpix.com. 

(SPEECH)
And again, you see that in a lot of just anecdotal evidence of all these big jury verdicts and settlements in recent years. 

(DESCRIPTION)
Social Inflation. Larger verdicts: 4 times Increase in the frequency of verdicts of $20 million or more in 2019 vs the annual average from 2001 to 2010. Larger settlements: 2 times Total class action settlement amounts: 2019: 2.1 billion dollars. 2020: 4.2 billion dollars. 55 million dollars: Average settlement amount, 2020. +15% from prior 9- year average. Source: VerdictSearch, Cornerstone Research. 

(SPEECH)
But it's not just anecdotal. This has actually been studied, and they found that, in fact, we are seeing larger verdicts than we have in the past. So there have been four times as many verdicts of $20 million or more in 2019 than there were 10, 15 years before. 

The number-- the amount of class-action settlements doubled from 2019 to 2020. So over $4 billion in class-action settlements in 2020. And the average settlement amount, $55 million in 2020, was 15% more than the average over the previous nine years. So we are seeing that the verdicts are getting more expensive, and the settlements are getting more expensive as well. And the mystery is why is that happening.

(DESCRIPTION)
Social Inflation: What is causing it? How can it be anticipated and mitigated? Attorney advertising drives social inflation. Six attorney ads appear again. 

(SPEECH)
Well, what's causing it and how can it be anticipated and mitigated? And what I argue is that a lot of it is driven by this attorney advertising. People see these ads, and it drives them to file more claims. 

(DESCRIPTION)
Logo: The Geneva Association, Insurance for a Better World. Text: Attorney advertising drives social inflation. Social Inflation: Navigating the evolving claims environment, December 2020. Plaintiffs' lawyers in the U.S., as well as companies that specialise in advertising and gathering claims (known as 'lead generators') now collectively spend over a USD 1 billion on television advertising each year. Such spending has consistently outpaced growth in the overall economy and has accelerated over recent years as part of intensive campaigns to recruit new clients, especially for class action lawsuits... This misleading advertising has not only generated thousands of lawsuits and associated fees for lawyers, including cases related to insurance programs originally designed to substantially reduce, if not eliminate, attorney involvement such as personal injury protection (P.I.P.). It may also indirectly have pressured some defendants and their insurers into settlements due to the cost of never-ending litigation and the risk of damage to their reputations. Furthermore, the adverts influence the thinking of citizens who might one day serve on a civil jury. Source: Darren Pain, The Geneva Association, "Social Inflation: Navigating the evolving claims environment," December 2020. 

(SPEECH)
And in fact, this was borne out by some research that was done in the insurance industry not long ago where they found that this advertising not only generates thousands of lawsuits, but it pressures insurers and defendants into settlements due to the cost of litigation that never ends, because the big volume of cases and the risk of the damage to their reputations, which we're going to talk about, but it also influences people who sit on juries about what's fair outcome. 

(DESCRIPTION)
A red triangle with an exclamation symbol in the center and three sides labeled: Litigation Risk, Commercial Loss, and Reputational Damage. Text: Attorney advertising drives social inflation. 

(SPEECH)
And so just to walk through that a little bit more, how exactly does the advertising drive this social inflation? And what I'm going to show is that it's a combination of increase of the risk of litigation, increase of the risk of commercial loss, loss to the business, and it damages the reputation of the targeted companies. 

(DESCRIPTION)
More Lawsuits. 

(SPEECH)
So first in litigation risk size. 

(DESCRIPTION)
Mass tort TV advertising often precedes increases in claim filings. A graph titled Bard Hernia Mesh Lawsuits versus Attorney Advertising Dollars features months from August 2016 through April 2019 on the x-axis, estimated ad spending per month on the left y-axis, and number of filed complaints per month on the right y-axis. Source: Becton, Dickinson. 

(SPEECH)
The most obvious way that this affects litigation is it encourages the bringing of more lawsuits. And we see this again and again in clients we've worked with and litigation we've followed. So here's just one graph, an example of hernia mesh, which was a medical device that's been a major target of advertising in recent years. And you can see with the black line in the chart there, there were very few claims filed related to hernia mesh devices for many months. 

And then the red line is the increase in advertising spending. And what you see is there are very few claims filed and the advertising picked up. And then shortly after, that black line starts to come up too. So the advertising will drive lawsuits, which is not surprising because that's exactly what they're intended to do, and that is what the investment is for.

(DESCRIPTION)
In a courtroom photo, 12 juror seats sit empty. Text: Jury Influence. Jurors: 90% Would be concerned if saw a lawsuit advertisement claiming that a product caused injury. 72% Agree that if there are lawsuits claiming products injured people then there is probably truth to the claim. Source: Juror surveys conducted by Trial Partners, Inc. -- Photo credit: Brandonrush, Wikimedia.org (Creative Commons). 

(SPEECH)
But it's more than just increasing litigation and lawsuits. It also can have an effect on the jurors when they actually get to these cases. So when jury consultants survey jurors, they found that 90% say they'd be concerned if they saw a lawyer ad claims that a product causes an injury. So just seeing an ad can make a juror feel maybe suspicious about the product or predisposed against it before they even sit in the trial. 

And then another over 70% say that there are lawsuits out there, whether or not there are merits, it makes them question, well, maybe there's some truth to the claim. So it's a way to already maybe influence a juror before they even sit down in the jury box. And we've seen this tactic in real life.

(DESCRIPTION)
St. Louis Talcum Powder Litigation TV Advertising, January to October 2016, 3 trials. A container of Johnson's Baby Powder. Photo credit: Austin Kirk, Wikimedia.org (Creative Commons). 

(SPEECH)
So in 2016, as I'm sure many of you saw, for years now there have been a number of lawsuits related to Johnson & Johnson baby powder, specifically talcum baby powder. And they had a series of trials in St. Louis over the course of about 10 months, three trials, January to October 2016. During this period, St. Louis, although it was the 21st biggest media market in the United States, it was the No. 1 media market for talcum powder lawsuit ads. 

In fact, there was one talcum lawsuit ad running an average there every three hours in St. Louis. So if you were a juror or a potential juror in one of these talc cases, you were probably going to see one of these ads. And if you sat in these juries, you were going to go home at night, turn on the TV and probably see a talcum powder ad. And sure enough, looks like the investment paid off because over the course of those three trials, nearly $200 million was awarded to the plaintiffs who brought those cases.

(DESCRIPTION)
Total Awards: 197 million dollars. St. Louis Local & National Talcum Powder Litigation TV Advertising, September 26 to October 9, 2016. An ad reads: Ovarian Cancer Alert. "It was really clear they were hiding something." Jury Foreman. 46 airings. "...$72 million was awarded in a recent talc lawsuit after lawyers found secret internal documents showing that the baby powder manufacturer knew about a link between talcum powder and ovarian cancer for decades, but never told the public. The Jury Foreman was quoted as saying, "It was really clear that they were hiding something. All they had to do was put a warning label on. The manufacturer decided protecting their profits was more important than protecting the health of their loyal customers. " ..." 

(SPEECH)
And not only were there so many ads brought on this topic, but many of the ads were very clearly making jury-type arguments, including this one on the screen where they actually quoted the jury foreman from a previous trial talking about the company was hiding something. They just had to put a warning label on, and they decided their profits were more important than protecting the health of their customers. So the ad was more than just a typical if you suffered an illness using this product, give us a call. But it was really making trial arguments before the trial as a way to influence the perception of jurors and potential jurors. 

(DESCRIPTION)
Litigation Risk, More Lawsuits, Jury Influence. 

(SPEECH)
So again, the lawyer advertising clearly increased litigation risk of the targeted companies by bringing more lawsuits and by potentially influencing jurors. But it's not just a litigation risk. There's also the reputational damage that comes with these ads.

(DESCRIPTION)
Commercial Loss. 

(SPEECH)
So the first one that often gets ignored but is very important is a commercial loss. 

(DESCRIPTION)
Two people sit in front of a TV ad that reads: Some insurance companies are telling business owners they don't have coverage. businessloss.org. Photo credit: cottonbro studio, pexels.com (Creative Commons) 

(SPEECH)
So these ads are not just being seen by people who may bring a potential claim. They're being seen by everybody, of course. And this includes all consumers, people who are going to be shopping for a product or not, people who are going to be buying an insurance policy or not. And they see enough of these ads, and it starts to change their perception of the companies that are being targeted. 

(DESCRIPTION)
A graph titled Public interest rises with litigation TV advertising features May 2017 through January 2018 on the x-axis, number of litigation searches on the left y-axis, and estimated TV ad spending in millions on the right y-axis. Source: X Ante utilizing Google data. 

(SPEECH)
And we track this, because we track Google searches related to topics. So if there's an ad about hip implants, we see a lot of hip implant advertising, we'll track for how many people are searching for hip implant lawyer, hip implant lawsuit, injury, etc. And we see, this is an example, sure enough, from one of the products we targeted that as the advertising increases on a topic, not surprisingly, everybody goes on their phone and goes on their computer and Googles for more information. So public interest in the potential litigation increases. 

And we also see that sales often can decline as a result. 

(DESCRIPTION)
Text: ... and sales may decline. A graph features June 2014 through October 2014 on the x-axis, ad spending in dollars on the left y-axis, and T Rx share in O.A.C. market on the right y-axis. 

(SPEECH)
So this was a prescription drug that was the target of a lot of lawyer advertising. And sure enough, as the red line of TV ad spending increased their market share, their prescription rates actually decreased. And in fact, they're working with an academic study now that is finding this to be, in fact, the case that areas where there is more lawyer advertising about particular drugs, particular products do see a decrease in people buying those products, which is not surprising.

Especially in the prescription drug space, enough ads that tell you this drug can harm you, can hurt you, can kill you. Well, people will go to their doctor and say, I don't want to take that drug anymore. I don't want to fill that prescription. Give me something else. So for drug companies, consumer product companies, insurance companies, others who are targeting these ads, it can really affect their business bottom line as well. 

(DESCRIPTION)
Ad text: "Did Farmers deny or lowball your claim?," "Some insurance companies are telling business owners they don't have coverage," "Lawsuits are now being filed against insurance companies that are denying business interruption claims," and "Hurricane Hanna Insurance Claim Denied or Delayed? Be sure your insurance claim isn't denied, delayed, or underpaid. We can help now!" 

(SPEECH)
And again, here are some examples of just some of the ads targeting insurance companies and questioning their integrity as a business. And so you think about you're trying to sell insurance policies or trying to convince people to keep insurance policies, get new ones. You're really working at a crosswinds from these ads that are kind of telling people the opposite on a regular basis. 

(DESCRIPTION)
Text: Investor Scrutiny. In a photo, an investor watches stock figures on a monitor. Photo credit: Jim Makos, flickr.com (Creative Commons). 

(SPEECH)
And then the final impact in addition to just the commercial loss is the investor scrutiny. These ads are getting so widespread, and these verdicts and settlements are getting so large that they're really moving the stock prices of a lot of the impacted companies. They are driving down the share prices and the values of these companies because of the litigation risk that they're facing. 

(DESCRIPTION)
Text: Growing litigation risk depresses share prices. Bayer Shares Fall After 2 Billion Dollar Roundup Verdict. Chemical giant's shares are one of the worst performers in the Frankfurt stock exchange's blue-chip D.A.X. index, The Wall Street Journal. FDA Halts Vaginal Mesh Sales; Boston Scientific Shares Fall, Bloomberg. Should You Sell J&J Stock As Opioid Charges Heat Up? J&J's legal issues will be a short-term headwind for the stock, Investor Place. J&J shares nosedive on report it knew of asbestos in Baby Powder, Reuters. Getinge Slides Most in Four Years on Provision for Mesh Lawsuits, Bloomberg. COVID claims and the insurance industry. Coronavirus Claims Hurt Shares of European Insurers, Firms pay out as events are canceled and business operations are interrupted; capital positions shrink, The Wall Street Journal, April 17, 2020. On the right, a chart titled Share-price changes of European insurers and reinsurers this year as of August 17. From largest change to smallest, companies include Aegon, Swiss Re, Aviva, AXA, Assicurazioni Generali, Legal and General, Allianz S.E., Prudential, Zurich Insurance, and Munich Re. Source: FactSet. 

(SPEECH)
And we saw this in the insurance industry just a few years ago with COVID, that immediately after the pandemic began, the share prices in a number of the European insurers, as reported in The Wall Street Journal, started to decline already. And sure enough, not surprisingly, we saw $45 million in TV advertising related to claims around COVID, largely leading to increase in insurance claims. 

(DESCRIPTION)
COVID-19 Claim Advertising: 2020 to 2024 Year To Date, Number of Ads: 257,000 ads, estimated ad spending 45 million dollars. Three ad screenshots target business interruption, nursing home infection and workplace exposure. 

(SPEECH)
So I'll just conclude by reaffirming that the advertising does drive and predicts the risk of both litigation, more lawsuits, more attorneys involved in these cases, higher jury awards and settlements, all driven up by these ads. And they also can affect the reputation of the affected companies, both by impacting their bottom-line business, as well as impacting their share prices. 

(DESCRIPTION)
A warning displays below six ads. Text: Warning: Ignore mass tort advertising at your own risk. 

(SPEECH)
So I'll just conclude with saying that I think these ads are ignored at your own risk. 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. 

(DESCRIPTION)
Thank you. Logo: X Ante Mass Tort Intelligence. www.x dash ante.com, 2 0 2. 9 3 0. ANTE (2 6 8 3). -- info@x dash ante.com, 2020 Pennsylvania Ave, N.W. Suite 144, Washington, D.C. 20006. 

(SPEECH)
JOAN WOODWARD: Well, Rustin, that was just fantastic, interesting, and so we're going to bring in Stef here, Stef Zielezienski of the American Property Casualty Insurance Association for our discussion. But first I always like to ask my audience a question to get a sense of what they're thinking and how they're feeling. 

So, we only have one question today. How often do you see or hear advertisements for mass tort litigation? So, a bunch of times a day, daily, monthly. Again, it depends I think a little bit on what state you live in given what Rustin just told us. But let's see what our audience is saying. How often do you hear or see these ads?

All right, looks like at least two-thirds of our audience says multiple times or daily. Only 9% say hardly ever. So that's interesting. We'll try to dig deeper and to figure out where those folks are living. Probably not in some states that are more heavily litigious. But most people are saying multiple times a day, daily or weekly in terms of our little survey. So that doesn't surprise I think anyone on this phone.

But let's go back, Rustin. I want to talk to you about, you gave some examples out there, but those real-world examples that really illustrate the relationship between attorney advertising and increases in lawsuits or claim activities. So you've been in this business now for you said over a decade. This correlation is real. What is it that you're seeing in the last, say, year post-COVID? I don't want to say post-COVID. We still have COVID. But how about now in the last, say, 12 to 14 months?

RUSTIN SILVERSTEIN: Yeah. I mean, as I mentioned, they are always looking for the next target. I often compare it to venture capital firms. They're always looking for the next thing to invest in, and they will invest in a variety of torts from more mature torts that already have settlements and maybe it's easier gains if you can get a client, but maybe fewer clients available, to less mature torts where there's more potential people but more potential upside. So we continue to see a lot of very heavy advertising across-- we've seen increasing on the consumer products targeted in recent years. The Camp Lejeune, I mentioned, contamination has been very huge recently.

And of course, you asked about the link between the advertisements and the lawsuit filings. These advertisers are very sophisticated. 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 them. They will continue to advertise around it. And then of course, when they get positive developments in the litigation, like a consolidation of their cases, a positive jury award, that will only fuel the fire and the interest in advertising in that particular topic.

JOAN WOODWARD: OK, Stef, I'm going to pull you in here. There's some myths out there. Oftentimes when we see these ads, we're really led to believe that the plaintiffs are assured this huge payout. Is that really the case in some of the data you've been looking at?

STEF ZIELEZIENSKI: Yeah, so Joan, growth in unchecked plaintiffs’ bar advertising creates a platform for the plaintiffs’ bar to foster the narrative that businesses, including insurers, are bad actors and that plaintiffs’ attorneys are there as white knights to help them navigate the court system. In reality, though, insured claimants receive smaller portions of total settlements as attorneys and third-party litigation funders look to profit even more.

Plaintiffs' attorneys keep a large percentage of the plaintiff's recovery, typically between 30% and 40% of the total amount. And additionally, where third-party litigation funding firms are financing the lawsuit, a large amount may also go to those third-party investors who have no relationship to the claimant other than the profit from their suit. And of course, consumers are not advised of when the defense wins or the cases that are ultimately settled at a much lower figure or reduced by the trial judge or on appeal.

The amounts touted in trial lawyer ads also mislead because they don't really reflect the average award. So the short answer is no. You're not going to automatically get a gigantic payout. It really is-- the advertising is really misleading and often puffing about what the plaintiffs’ firm really achieved.

JOAN WOODWARD: And so just to follow up on that, if I'm a client of an attorney, an attorney is taking funding from a third-party litigation finance group, hedge fund or other, does that attorney have to tell me, the client, that they're getting an investor to back this case or that's not required?

STEF ZIELEZIENSKI: No. And in fact, almost the opposite is true. There's a lot of mystery about where third-party litigation financing enters the picture. A lot of what we're trying to achieve in terms of just basic reforms are getting courts to require disclosure and discovery of when third-party litigation financing occurs. The most we're able to do right now is to scour the TPLF firms’ sites and reports, because they themselves are the only voices that can help us identify when third-party litigation financing really occurs. So it's really important, Joan, I think, to focus on at least getting some transparency into this practice.

JOAN WOODWARD: OK. I think we're going to talk about a couple of bills floating in Congress in a few minutes on that. So thank you. Rustin, I want to go back to talk about the traditional media channels. And the billboard driving down the highway, obviously, is so obvious there. But the digital platforms now have really maybe changed the way this has become more effective. And I want to talk to you about that, because the traditional versus the digital and the mediums that are really working for those groups, is there a difference there or it's too early to tell?

RUSTIN SILVERSTEIN: No, I think we are seeing it evolving like the rest of advertising, like the rest of the media. I think TV remains a primary and dominant method of soliciting claims. But like all other advertising, there is a shift to more digital, more online, more social media. We've seen a lot of that, not surprisingly, depends on the product at issue, the topic at issue and the audience they’re trying to target.

So when we saw a bunch of litigation around Juul e-cigarettes, for example, a couple of years ago obviously targets a younger potential plaintiff. We saw a lot more TikTok, Instagram, other social media. Whereas when we see products targeted towards an older audience, prescription drugs, medical devices, etc., then we'll see more TV, radio and newspaper, that type of thing. So again, they're sophisticated advertisers, and they will go to where they think their potential plaintiffs are. And so many of them are everywhere, but they will often vary depending on who they're trying to reach for a given matter.

JOAN WOODWARD: OK. Thank you for that. Stef, I want to talk about some of the effects of all this going on in society. What are the downstream effects that your group sees with the increase in these lawsuits and claims that are being filed?

STEF ZIELEZIENSKI: Well, many businesses are facing higher costs, and companies and insurers are facing significantly higher claims costs than in recent years. So much so that claims costs and expenses now are sometimes higher than what is actually collected in premiums. And the downstream effect really to consumers is that they're feeling it financially as well.

A 2022 report that was commissioned by the U.S. Chamber Institute for Legal Reform estimated that excessive tort costs equate to an annual loss of nearly $443 billion in economic output. Just think about that for a minute and the loss of potential jobs associated with that.

Same report notes that every American household pays more than a $3,600 tort tax that raises the cost of products and services like groceries and gas. These are direct consequences of the sustained volume of attorney advertising. Studies have also shown dramatic increases in liability claims due to increases in attorney advertising, which have led to more frequent attorney involvement, increases in claim frequency, and expectations of large settlements and jury awards. The same studies have found that the amount spent on advertising appears to correlate with high nuclear damage-types awards in certain states.

So for example, according to a recent Defense Research Institute social inflation report, the states of Florida, Texas, California, New York and Georgia saw the highest expenditures on legal services and advertising in a five-year study period. And those states were also found to have had the most cumulative nuclear verdicts. Florida, California, New York and Texas ranked No. 1 through 4, and Georgia was No. 7 on that list.

JOAN WOODWARD: OK. But I mean, the average person out there, they may have accidents, or they may get injured on the job, and they just have been rolling down the highway seeing these ads. And so people are saying it's not going to hurt anything if I call and just see if maybe I can get more out of my settlement if I call this law firm. And so how often is it really the case by calling the person that keeps advertising, the average American gets more in a settlement? Is there data around that?

STEF ZIELEZIENSKI: Actually, it's just the opposite. I think the data shows that if you are engaging an attorney early and persisting with that attorney, you're actually seeing a reduction in the amount you actually get. So there was a 2023 Sedgwick study which said the percentage of early attorney involvement has significantly increased. So the percentage of attorney involvement that was in place within 24 hours of reporting an incident was just under 43% in 2017. But by the end of the next five-year period, that percentage had risen to over 54%, which is an increase of 25% over that five-year span.

But equally important, and it kind of embedded in that Sedgwick study, was some information data by Milliman on commercial auto claims just in 2019. So based on that 2019 data, Sedgwick reported that the average cost of claims involving attorney representation was 14.3 times higher than closed claims not involving attorney representation. The average cost of claims resolution was 34 times higher than without an attorney. And the average loss in ALAE was 15.3 times higher with attorneys. That's just a one-year snapshot. You can imagine the cumulative effect of that year over year.

JOAN WOODWARD: Yeah. Wow. And the average American just doesn't have that data in front of them, doesn't know that they shouldn't pick up that phone. Rustin, I want to talk to you a bit about how the changing landscape in advertising technology and targeting, especially now with AI, affect the-- have an effect on this industry. So what has AI done in terms of the targeting of the audience? You talked about the younger versus the older, maybe the regional or geographic. Talk to us about targeting in different states and how they go about that.

RUSTIN SILVERSTEIN: I think it's maybe a bit early to see what the effect of AI is. But as I said, these are sophisticated advertisers, sophisticated marketers. So I am sure they are already experimenting. Two areas where I think AI will have an immediate impact is, I think, one of the challenges that these firms that run these ads always have is intake of potential clients when the calls come in, screening potential clients, processing it, and I think AI will probably be utilized to help in that process, help lower the cost and increase the efficiency.

As we're seeing with so much other customer service with these online chat bots and others that are trying to work with us, I'm sure we'll be seeing that in the mass tort lead generation and plaintiffs’ attorney side. I'm sure they'll also be using it for developing messaging and trying to tailor message and experiment with different messaging. We'll see that. So they're always, as lawyers, there's questions about, for many, about some of their practices. But certainly, as marketers and advertisers, very sophisticated and will jump on any technology to try to gain an advantage.

I talked a lot in the presentation about this volume, this waves of ads that just keeps coming and coming and coming. The flip side of that is from the perspective of the advertisers and the plaintiffs’ attorneys on the other side is it's highly competitive. They are constantly competing with each other to get these cases. And so they are always looking for new technology, new approach to help them in this kind of never-ending competition.

And we may talk about it a bit later, but they have this added pressure now not just to get these cases for themselves, but they also, if they have outside funders, outside investors, they face a lot of pressure to get enough cases to pay back those who have invested in them, such as adds to this arms race that we've seen in recent years.

JOAN WOODWARD: OK. I'm going to go to practical takeaways, mitigation, what's next for this whole industry. But first, I want to talk about what Congress can do, what state legislatures possibly could do. But what are the gaps right now, Stef? I know you look at legislation and regulation all day long. We talked a little bit about transparency with third-party litigation. What are the gaps in some of the states or in Congress? I mean, Congress did have to authorize the Camp Lejeune settlements, I believe. Talk to us a little bit about that process.

STEF ZIELEZIENSKI: Yeah. So for attorney advertising specifically, a lot of that is marginally regulated by court rules and professional ethics rules. And I think it's safe to say that when the Supreme Court opened up the litigation world to attorney advertising, it was more of a free-for-all based upon the First Amendment than anything else. And so, trying to get a uniform-- but in fairness, the Supreme Court said it can't be false and misleading. But the real trick is to try to get some uniformity into how attorney advertising is regulated by mainly by the state bars and by court rules.

And I'll just take a slight step back. And I don't mean to be on a soapbox about this, but the difference between this and real, true commercial speech is that advocating before a court is advocating in a branch of government. And I don't think anybody would tolerate unrestricted advocacy before Congress without some sort of disclosure or restrictions on the way that is done. And so I think that is, as I said, the real trick here is trying to get some uniformity and to take the misleading element out of the advertising.

There are a lot of states that, for example, have imposed restrictions on advertising. Things like putting a label health alert on the TV ad is really, really misleading and has, in fact, caused the public out of fear to stop taking medication when they really shouldn't. And so those aspects are probably-- the safety aspects are the ones that are most regulated.

But the real problem here, I think, as Rustin's presentation illustrated, is for a few decades, attorneys have been advertising, and they have so saturated the landscape that it's a form of Reptile Theory, that the automatic perception amongst consumers, the public and indeed jury pools is that corporations are bad. They're evil. They're trying to affect your health or otherwise, and the trial lawyers are there to save you.

And so if that narrative is commonplace, I think one way to try to reverse that is to point out to the public a lot of the cost impacts of massive amounts of litigation unhindered and facilitated by attorney advertising. Sorry about the long-winded answer.

JOAN WOODWARD: That's fine. OK. I want to talk about practical steps and kind of key takeaways before we get to audience questions. So Rustin, we have a lot of insurance professionals, agents and brokers and others, on the phone today. What practical takeaways can they-- when they look at these trends in advertising, why does it matter to them?

RUSTIN SILVERSTEIN: I think that's a fair question. And I think in the context of the insurance industry and those working in the industry, I can think of three clear values of the data of tracking this. The first, obviously, is the litigation risk component, both from an underwriting perspective. Is your potential policyholder already vulnerable to potential attacks? And these legal ads are like the canary in the coal mine. You will see them before you'll see the lawsuits being filed. So before you write a policy for somebody who has a product on the market or may be vulnerable to a potential litigation, you can see, have there already been ads run against them on this topic?

And secondly, when you already do have a policy and you want to manage the amount, the number of claims, the volume of claims, the ads can also be a good proxy for what's coming. 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.

The second area where I think the advertising can be helpful is you get a sense of who's behind these lawsuits. Who are you going to face on the other side of the negotiation table when the lawsuits are brought? Either in the cases themselves or in potential settlements. You get a sense of who the opposing party is, who's building up the inventory of cases.

And the final one is the one that I think Stef referenced. The tort reform community talks about these judicial hellholes, particular parts of the country that are more susceptible maybe to both advertising and high verdicts, high settlements, high jury awards, etc. And the advertising can kind of maybe clue in to where some of those places are that maybe you should be extra cautious or maybe should be avoided or maybe make extra contingency plans for how to deal with doing business there.

JOAN WOODWARD: OK. So the evolving trends that you're seeing though in mass advertising, let's sum up, and then I'm going to go to you, Stef, to talk about what we can do, how businesses can effectively communicate. We have a lot of questions coming in from the audience saying why doesn't the insurance industry just tell the story about how this is tort tax on every American? It's not so simple. But Rustin, can you wrap up the couple of trends you're seeing and what you expect kind of in the future now?

RUSTIN SILVERSTEIN: I mean, so we've touched on a couple of them already. So the advertising is obviously increasing, both in terms of the volume but also in terms of the number of media that it is. It's not just TV and radio. It's all the other online, digital aspects we've talked about.

We are seeing more outside funding coming in to support these cases, which has the effect of more money pouring in that's available to chase more clients, leads to more aggressive advertising. It also leads to different dynamics when you get to negotiations, settlement negotiations, and you have a third party at the table now, this investor who will perhaps hold out for more money than the lawyer would have originally. It may not be in the best interest of the plaintiff, but it may be what they need.

And you also have this instance, and people who are involved will tell you, that they have less quality cases are being brought. That because there's so much advertising out there, there's so much pressure, firms will show up with thousands of cases and not all of them and often very few of them are quality, real, legitimate claims. And they're hoping that just in the instance of a global settlement, they will be able to sneak some through that maybe wouldn't have gotten payouts anyways. So more advertising across more media, more money, which means more aggressive, which means higher payouts, higher settlements, and more litigation.

JOAN WOODWARD: Is there any restrictions? I know a lot of the-- thank you for that. These sovereign wealth funds and other foreign investors are pouring money into this third-party litigation. And there's a bill out there to try to get transparency, I know, but there's no restriction on it right now, correct?

STEF ZIELEZIENSKI: Not right now. There are efforts to get more insight into-- I know there's an effort at the federal level to try to expose exactly who the foreign-- unnamed foreign sovereign wealth funds are. But it's a national security issue. We are aware of heavy third-party litigation financing in IP cases. So are those Chinese sovereign wealth funds behind that? And I think the answer probably is yes, No. 1.

And No. 2, they don't need to win. They just need to request source code information through the discovery process to win. So certainly, Congress is very concerned about that, and I think most state legislatures would be as well.

JOAN WOODWARD: OK. We're going to go to some audience questions. We have a whole lot of them. So first one coming in from Beth Murphy. Beth asks, “Can you share any advice on how to proactively advise clients about the role of the agent or broker being diminished if an attorney is hired?” That's a really good one I know on a lot of people's minds here. Who wants to take that? Stef?

STEF ZIELEZIENSKI: I can start and Rustin can jump in. I think much like the contractual relationship between an insurance company and their policyholder, the agent has a similar relationship. And so to the extent a third party, the attorney, is coming in and superseding that relationship, it erodes the contract. So I think the biggest impact is it undermines the fundamental relationship and duties and obligations of the agent to help their client. So that's what I would focus on, I think. That and the data shows that once that attorney is involved, costs go up.

JOAN WOODWARD: Anything from you, Rustin, on that?

RUSTIN SILVERSTEIN: That was well said, Stef.

JOAN WOODWARD: OK. This is coming in from John Wiedemann. “Can you explain the typical process of how the process works when private equity invests in a lawsuit? What I mean is how does the law firm process change when this type of event happens?” So they're talking about now if you have the third-party private equity money in versus not having it in, what's the process of the law firm internally? Or maybe we don't know that.

STEF ZIELEZIENSKI: We don't know a lot about it. But I think we have seen third-party litigation financing agreements where in exchange for-- this is not a loan. So the TPLF firms have avoided the regulatory process associated with the loan. It's a non-recourse payment of money. So the agreements often are done directly between the TPLF firm and the law firm. In a lot of cases, the client is not even aware that that's going on.

And I will share that from an unnamed company, I had one anecdotal situation where they said they walked into a mediation in a certain state and the TPLF firms were sitting around the table negotiating the outcome. So imagine that you now have non-lawyers involved in controlling the outcome of litigation. That should scare--

JOAN WOODWARD: That's scary.

STEF ZIELEZIENSKI: It should scare everybody involved in the judicial system.

JOAN WOODWARD: Yes. Here's a good question coming in from Bertrand Wilson. “Are there noticeable differences by generation for effectiveness of tort advertising? Are younger people less swayed or attracted by these tort legal ads?” For you, Rustin.

RUSTIN SILVERSTEIN: I don't think so. I haven't seen evidence of that. I mean, to generalize, a lot of these lawyer ads you can imagine who they're trying to reach. They're trying to reach people who don't know any lawyers personally so will hire a lawyer from TV. So it tends to be lower income, lower education, people who are sick, people who are unemployed, people who are watching TV during the day and late at night. And if it's not TV, then they'll-- then they'll get them on social media. So I think maybe the media, the way they reach them may change generationally. But I think the efforts to go after them will remain.

And Stef mentioned the Reptile Theory. There's some arguments out there from defense lawyers that think this younger generation are more susceptible to that than the older one. Progressive politics, whatever it may be, Occupy Wall Street, whatever it is, maybe are more skeptical of companies. So they may be more susceptible to this type of advertising. But I will say that given most of the products that we see in mass tort, because they tend to be medical products, tend to more focus on more of an older generation. But I think it’s a-- they're equal opportunity going after the potential customers across the generations.

JOAN WOODWARD: OK. Stef, this question is probably for you. From Daniel Romanski, “When and why did the Supreme Court open up legal advertising like this, as you mentioned?”

STEF ZIELEZIENSKI: At the time, they were-- I think the plaintiffs’ firm-- and kind of view this the litigation system as a one-sided competitive market. They were trying to spur interest in getting clients to file lawsuits. And at the time, they made a very compelling argument that this was just commercial speech. And as I said, the Supreme Court certainly bought that argument on a First Amendment grounds. But they didn't outlaw restrictions. And I think there was not a lot of recognition at the time of the need to do that. So there's been kind of a 40-year head start by the plaintiffs’ firms.

And in the public consciousness now, it's just there's pervasive perception that plaintiffs’ lawyers are there as white knights to help out aggrieved members of the public by evil corporations. And so, I know it's like the first thing that companies want to talk about when we get in a room and want to talk about all your advertising or the advantage of the plaintiffs’ bar.

I will say that it's not an effective response to say, hey, we're really good guys. That doesn't work. It only works when consumers, when you connect it to something personal to them like costs. Having said that, we do have a parallel campaign called “Insuring What Matters Most,” which is designed to point out all the good things that the insurance industry does.

JOAN WOODWARD: Yeah. A lot of our folks on the line are asking that question. What can we do as an industry? What are we doing? I know you're working hard in Washington there to educate Congress on this and in the states. You guys have quite a team at APCIA. But it's hard because it's hard to combat this multibillion-dollar industry that's grown up, as you say, over 40 years when we're just trying to do the right thing for our customers and clients. And have any of these advertisers actually been sued for disparagement or implied disparagement of the companies that they're kind of going after or is that too difficult to prove maybe?

STEF ZIELEZIENSKI: It's probably too difficult to prove. Let me say, there is a silver lining and there's light at the end of the tunnel here. And I'll use Florida as an example. If you do the kind of persistent use of data to say particularly for the insurance industry in Florida, it's not natural catastrophe losses that are driving up the insurance availability and affordability problem. It's the increase in man-made costs, including the exponential increases in litigation costs that are driving the problem.

That was actually accepted by the media in 2022, and they started showing the data. And what was most effective, according to one representative in the Florida legislature, was the data point that said Florida has like 7% of the property insurance claims nationwide, but it has 80% of the lawsuits. And that disconnect between the percentage of claims versus the high percentage of lawsuits was really what opened the eyes of those that were probably skeptical to reform before 2022. So more of the same. You need to do more of the same.

RUSTIN SILVERSTEIN: Yeah, I was going to add that what we found in our experience is that when clients have raised the visibility of this issue, either globally or in particular litigation, either bringing up advertising before a judge or a jury or just in public communications, it often has the effect of causing the advertisers to pull back and lower their advertising and become a bit more sheepish about it.

Because they know no one likes these ads. They're not Super Bowl ads. People don't sit down wanting to watch them. They're annoying and they're not popular. And when you call out, especially if they're misleading or alarming or potentially hurting people's health by making them think side effects are greater than they actually are, they will pull back on the advertising. And they-- and they will step back a bit.

So I think let's talk to proactive steps. I think if you can use information, again, that we have, but use this information to shine a light on what's going on and what's being said, which often happens in the shadows, and most people don't see it because they work during the day and they sleep at night, so they don't see a lot of these ads.

Then you often can have an effect of pushing back a bit on the advertising and including getting unlikely coalition partners. I mean, as Stef probably knows, the AMA, the doctors association, they've put out warnings about these ads because it scares people off taking their meds. The AARP has concern about it for the same reason. The FTC came out with a warning letter about it, because for the same reasons, it's scaring people and it's causing unnecessary harm.

So I think the more attention that's paid for it, again, both overall as an issue, but in particular case of litigation. I mean, we've had cases of the plaintiffs’ lawyer will stand up in court and say this is a terrible-- ladies and gentlemen, of the jury, this is a terrible product. Look at the 5,000 lawsuits that have been filed against it.

Well, once they open that door, the defense lawyers stand up and say, well, 5,000 lawsuits but 20,000 ads and $30 million that had been spent on it. And do you want to have that argument? Do you want us to start showing these ads to the jury? And usually they don't. And so that prevents these arguments from being made. So I think sometimes the best defense is a good offense, whatever that expression is, certainly applies here.

JOAN WOODWARD: All right. Well, listen, our time has really flown by. I appreciate both your work on this topic raising awareness. I think the more the public understands this whole cycle, the more transparency we can inject into the third-party litigation funding, of course. So Stef, thank you for the work you do in Washington and around the different state capitals. And, Rustin, thank you for creating this awareness and for companies and individuals globally to see the phenomenon that's going on and allowed to persist. It's just a shame that it's the American people who are actually paying this tax, right, on all tort litigation that's really kind of gone out of control.

So we plan to spend more webinars on this as well. And so we'd love you to fill out our chat-- in our chat here we have a survey. Did you enjoy it? What else would you like to see in our programming around this? But first, let me thank our two panelists so very much and then I want to talk about our upcoming webinars. So thank you, Stef. Thank you, Rustin.

(DESCRIPTION)
Text: Wednesdays with Woodward (registered trademark) Webinar Series. Take Our Survey. Link in chat. 

(SPEECH)
RUSTIN SILVERSTEIN: Thank you, Joan. This is a great opportunity, and I'm happy to answer other questions if people have other follow-up. 

JOAN WOODWARD: All right. We can find you on the website, I'm sure. 

RUSTIN SILVERSTEIN: Thank you, Joan. 

STEF ZIELEZIENSKI: Thank you, Joan. 

JOAN WOODWARD: Thank you, all. And to my audience members out there, as you know, I always like to do a little recap of what to expect over the next few months.

(DESCRIPTION)
A title appears on a square podcast logo above a red microphone: Travelers Institute, Risk & Resilience. The bottom of the podcast logo features the Travelers Institute (registered trademark) and Travelers logos.

(SPEECH)
First of all, if you haven't heard, we've got a podcast now. So the Travelers Institute Risk and Resilience Podcast is now available on Apple, Spotify, Google, anywhere you get your podcasts. So subscribe today. Also have some new and fresh content there. 

(DESCRIPTION)
Text: Upcoming Webinars. Citizen Travelers at the Travelers Institute: A Series on Civic Engagement. March 14th: Teammates, Leaders, Citizens: The Unifying Power of Athletics. Wednesdays with Woodward (registered trademark) Webinar Series. April 3rd: 2024 Economic Pulse: Legislative, Industry and Business Trends. April 8th: Special Monday Edition: Livestream from the Lifesavers Conference: Painting a Clearer Picture: How Technology Innovations are Improving Distracted Driving Data. Register: travelersinstitute.org. 

(SPEECH)
Also, the upcoming webinars. We have a really exciting lineup. Tomorrow actually, I'll host a conversation about the unifying power of athletics as part of our civic conversation series with Citizen Travelers. So that'll be a fun one talking with some sports folks about becoming more civically engaged. 

Then on April 3rd, we're going to sit down with the Chief Economist of the U.S. Chamber of Commerce to dig deeper into industry-specific economic trends and different sectors of the economy that might be doing well or not. April 8th, we'll have a special Monday episode livestreamed from the Lifesavers Conference in Denver, Colorado. We're going to be discussing how new technology innovations are improving distracted driving data and telematics.

Then on April 24th, we'll be talking to Executive Coach Chris Rollins about inclusive leadership. You don't want to miss this. He's a fascinating guy talking about inclusive leadership and leading people in your organizations.

And last but not least, we're going to-- join us for lunch in person if you happen to be in any of the cities you see on the screen right now. We have a National Cybersecurity Education Tour. So if you see any cities on this screen, these are free and open to the public.

(DESCRIPTION)
National Cybersecurity Education Tour. A check mark appears to the right of February 27th - Salt Lake City, Utah. Text: April 30th - San Antonio, Texas. June 4th - Tampa, Florida. June 6th - Nashville, Tennessee. June 13th - Greater Chicago, Illinois. June 27th - St. Louis, Missouri. Register: travelersinstitute.org. On the left on a U.S. map, Travelers umbrella logos mark the tour locations. Text: Cyber: Prepare, Prevent, Mitigate, Restore (registered trademark). Logos: Travelers Institute (registered trademark), Travelers. 

(SPEECH)
Nice hot lunch we'll serve you as well as a serving of cybersecurity awareness and what you can do with your customers and clients and your own business to be more cyber safe. So let us know what you, again, thought of this program on our survey. Thanks for joining us and see you all in a week. 

(DESCRIPTION)
Text: Wednesdays with Woodward (registered trademark) Webinar Series. Watch: travelersinstitute.org. Logo: LinkedIn. Text: Connect, Joan Kois Woodward. Listen wherever you get your pods. Logos: Travelers Institute (registered trademark). Travelers. travelersinstitute.org. 

[MUSIC PLAYING]