Triple-I’s New Issues Brief Suggests Link Between Attorney Advertising, Mass Torts, Third-Party Litigation Funding and Rising Insurance Costs

Business Wire

MALVERN, Pa.--(BUSINESS WIRE)--
The Insurance Information Institute (Triple-I) has released its latest issues brief, Legal System Abuse and Attorney Advertising for Mass Litigation: State of the Risk, shedding light on the sharp rise in attorney advertising across the United States and the increasing influence of third-party litigation funding (TPLF) on the legal and insurance landscapes.

According to research from the American Tort Reform Association (ATRA), legal service providers spent more than $2.5 billion on 26.9 million ads in 2024 alone – with significant increases in television, radio and outdoor advertising since 2017.

TV ads peaked in 2023 with 16.4 million placements – a 44% increase from 2017.
Radio ads surged to over 6.8 million in 2024 – a 261% jump from 2017 levels.
Outdoor advertising, including billboards, rose by over 260%.

While some of the overall rise in advertising spending (up 39% since 2020) can be attributed to increased digital costs, industry experts warn that the growing saturation of legal advertisements – often underwritten by third-party litigation funders – may be fueling legal system abuse, driving up insurance claims and delaying settlements.

“Attorney advertising has become big business in the U.S., fueling explosive growth in the likes of multi-district litigation, which solicit anyone and everyone to join frivolous and expensive cases around anything from ear plugs to weed killer,” said Sean Kevelighan, CEO, Triple-I. “These ads, often bankrolled by litigation funders, create urgency and overpromise outcomes, drawing in claimants who might not have otherwise considered legal action.”

There are hazards to attorney advertising, according to the Issues Brief. It creates a false sense of urgency, pressuring the target audience to take legal action, possibly without even considering other options; it overpromises results when implying guaranteed windfalls, creating unrealistic expectations and potentially impacting time to settle; and it influences potential juries, allowing attorneys to communicate plaintiff biased information, which can impact the way jurors process facts about the case.

TPLF, in which dark money investors finance lawsuits in exchange for a portion of the settlement or judgment, has become a major force behind the surge in mass litigation. The infusion of capital allows law firms to scale up legal efforts, including expensive and widespread plaintiff recruitment through advertising.

The economic potential of multidistrict litigation (MDL), combined with the high upfront costs of pursuing them, makes them an attractive vehicle for funders. The 2024 Westfleet Insider report estimates that TPLF assets under management reached $16 billion, with approximately 74% of commitments allocated to legal budgets – expenditures that can include advertising for plaintiff acquisition and case aggregation.

Research by Yehonatan Givati and Eric Helland shows a direct correlation between ad volume and plaintiff participation in MDL cases, further suggesting a link between attorney advertising, often funded by TPLF, and litigation proliferation. They theorize that the increase in filings is not merely a result of competition between lawyers for cases but, rather, a genuine growth in the number of claimants.

“Third-party litigation funding adds fuel to the big business of law fire,” said Kevelighan. “By enabling broader reach and sustained legal action, TPLF may amplify systemic challenges, particularly in how insurers model risk and calculate premiums.”

Calls for Transparency and Reform

Attorney advertising and third-party litigation funding are reshaping the legal landscape. In response, stakeholders are urging policymakers to balance access to justice by preserving the integrity of the legal system. Without greater transparency and oversight, the combined impact of mass tort advertising and external funding could further strain insurers, raise premiums, and erode public trust in the civil justice system.

“Tripe-I continues to shine a light on legal system abuse, calling for more tort reform to wrangle in what’s become out-of-control tactics by billboard attorneys who are exploiting Americans and increasing costs for critical household products and services,” said Kevelighan.

About the Insurance Information Institute (Triple-I)

Since 1960, the Insurance Information Institute (Triple-I) has been the trusted voice of risk and insurance, delivering unique, data-driven insights to educate, elevate, and connect consumers, industry professionals, policymakers, and the media. An affiliate of The Institutes, Triple-I represents a diverse membership accounting for nearly 50% of all U.S. property/casualty premiums written. Our members include mutual and stock companies, personal and commercial lines, primary insurers, and reinsurers – serving regional, national, and global markets.

About The Institutes

The Institutes® are a not-for-profit comprised of diverse affiliates that educate, elevate, and connect people in the essential disciplines of risk management and insurance. Through products and services offered by The Institutes and nearly 20 affiliated business units, people and organizations are empowered to help those in need with a focus on understanding, predicting, and preventing losses to create a more resilient world.