The Insurance Information Institute (Triple-I) has published a new issues brief titled "Legal System Abuse and Attorney Advertising for Mass Litigation: State of the Risk." The report highlights the significant increase in attorney advertising across the United States and the growing impact of third-party litigation funding (TPLF) on both legal and insurance sectors.
Research from the American Tort Reform Association (ATRA) reveals that legal service providers spent over $2.5 billion on 26.9 million advertisements in 2024, with notable growth in television, radio, and outdoor advertising since 2017. Specifically, TV ads reached 16.4 million placements in 2023, marking a 44% rise from 2017. Radio ads increased to over 6.8 million in 2024, representing a 261% jump from previous levels, while outdoor advertising also saw a rise of over 260%.
Industry experts suggest that this surge in advertising spending, which has grown by 39% since 2020 partly due to increased digital costs, may be contributing to legal system abuse. This situation is potentially 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," stated Sean Kevelighan, CEO of Triple-I. He explained that these advertisements often create urgency and promise outcomes that draw claimants who might not have otherwise considered legal action.
The issues brief warns that attorney advertising can create a false sense of urgency among audiences, pressure them into taking legal action without considering other options, and overpromise results by implying guaranteed windfalls. This could lead to unrealistic expectations and influence potential juries by presenting biased information.
TPLF involves investors financing lawsuits for a share of settlements or judgments and is now a major driver behind mass litigation growth. The capital infusion enables law firms to expand their efforts through extensive plaintiff recruitment via advertising.
According to the Westfleet Insider report from 2024, TPLF assets under management reached $16 billion, with about 74% allocated to legal budgets—expenses including plaintiff acquisition advertising.
Research by Yehonatan Givati and Eric Helland indicates a direct link between ad volume and plaintiff participation in multidistrict litigation cases. They propose that this increase is due not only to competition among lawyers but also genuine growth in claimant numbers.
"Third-party litigation funding adds fuel to the big business of law fire," Kevelighan remarked. He noted that TPLF might amplify systemic challenges affecting how insurers model risk and calculate premiums.
Stakeholders are calling for transparency and reform as attorney advertising and TPLF reshape the legal landscape. Without greater oversight, these practices could further strain insurers, raise premiums, and erode public trust in civil justice systems.
"Tripe-I continues to shine a light on legal system abuse," Kevelighan added while advocating for more tort reform against what he describes as out-of-control tactics by billboard attorneys exploiting Americans.
Since its founding in 1960, Triple-I has been recognized as an authoritative voice on risk and insurance matters—providing data-driven insights aimed at educating consumers along with industry professionals alike. As an affiliate entity within The Institutes organization framework today representing nearly half all U.S property/casualty premium writings collectively shared among members comprising mutual stock companies personal commercial lines primary reinsurers operating regionally nationally globally markets respectively