Lawyers are Trying to Revictimize Sexual Assault Survivors

Trial lawyers are currently trying to bilk thousands of sexual assault victims out of hundreds of millions of dollars. And they're poised to get away with it — unless a judge stops them.

This brazen cash-grab stems from one of the biggest sexual-abuse scandals in American history. For decades, local troop leaders at the Boy Scouts of America — previously one of the nation's most esteemed civic organizations — preyed upon the impressionable young men in their care. Sweeping investigations revealed thousands of abuse cases, and the ensuing lawsuits ultimately pushed the organization to declare Chapter 11 bankruptcy in February 2020. As part of the resulting settlement, the group agreed to set up a multi-billion-dollar fund to compensate victims.

Survivors deserve that money. But they might not get it — or at least not the full amount they deserve — if lawyers succeed in turning the personal tragedy of others into a financial windfall for themselves. They've put themselves in control of the settlement funds to maximize their own compensation, all the while shielding their underhanded tactics from public scrutiny.

Preventing injustice of this kind will require reforms that cap legal fees for attorneys, impose more transparency on how claims are generated, and enforce strict oversight over how settlement funds are used.

Consider the attorneys' behavior thus far.

Trial lawyers demand massive contingency fees from victims, typically 30 to 40 percent of any settlement or judgement. That makes the potential for profit so great, that many lawyers eager to get in on the case are investing in so-called "lead generation," using television commercials, social media advertisements, and billboards. This technique has led to a wave of unvetted claims. Many of them may be well-founded, but there are few safeguards to distinguish those with merit from those that are fraudulent.

And the sad truth is that large settlement funds, like this one, invite fraud. Even the 9/11 Victims Compensation Fund had to scrutinize claims with some care. Unsubstantiated claims this late in the Boy Scouts litigation cycle will diminish the funds available to compensate the real victims.

Dubious and ad hoc procedures dominate not only the generation of claims but also their submission. And the lawyers have been anything but transparent about the deals they may have cut among themselves when it comes time to divvy up the proceeds.

The frenzied behavior of the lawyers in this case is all the more disturbing in light of what the victims went through. They were exploited by individuals they trusted. Now that they have summoned the courage to tell their stories, they are once again being taken advantage of, this time by lawyers they trusted to represent their interests.

Sadly, such behavior is all-too-common with massive class action and mass tort litigation. Such abuses underscore why common-sense legal reforms remain desperately needed.

To begin with, settlement funds like the one in the Boy Scouts case need to be transparent, independently managed, and subject to regular audits. Plaintiffs' lawyers shouldn't manage these funds — a classic instance of putting the fox in charge of guarding the henhouse.

At the same time, attorney fees should be capped so that lawyers aren't incentivized to drag out legal proceedings in order to exaggerate their value-added for victims.

A recent report found that one lawyer working on the case billed $267,435 in a single month —  and that inexperienced attorneys who had just graduated from law school were routinely billing $600 an hour. Such a legal bill would come in for strenuous scrutiny by the audit committee of any major corporation — and probably kick off a search for new outside counsel.

Some basic safeguards against fraudulent claims must also be in place. Even something as simple as having claimants sign an affidavit before accessing settlement funds would help deter fraud.

The Boy Scouts abuse settlement should be an opportunity to compensate victims for the ordeal they went through — not an opportunity for their lawyers to enrich themselves.

Andrew Langer is President of the Institute for Liberty and the founder of the Institute for Regulatory Analysis and Engagement.