The Bar Association made mass crimes a business model a long time ago but never underestimated legal creativity. The attempted looting by the Boy Scouts of America underscores the need for crime reform in a modern era of social media and process marketing.
The Boy Scouts filed for bankruptcy a year ago despite recognizing that these are legitimate allegations of sexual abuse by some Boy Scout leaders. BSA and its insurers have worked in good faith to settle these claims. Because of this, insurers are owned by
Chubb GmbH.
and
urge US bankruptcy judge Laurie Selber Silverstein to investigate plaintiff attorneys’ methods that have resulted in a 55-fold increase in new claims in less than a year.
You read that right. The files of the insurance court determine that BSA was a defendant in 275 cases when it filed for bankruptcy and had been informed about another 1,400 potential persons. BSA now faces 95,000 claims. Behind this attack is a sophisticated new crime machine that uses Wall Street litigation funding, third-party brokers to collect and market claims, and extensive online marketing that recruits and coaches claimants. This is the new mass killing industry.
The insurer’s records indicate the Coalition of Abused Boy Scouts for Justice, an ad hoc group of mass plaintiffs. In a June 2020 email submitted to the court, a coalition founder stated that the “strategy” is to “continue to focus on our marketing and media efforts” so that “we control 80% of the claims[.] That means our coalition is controlling the case. “It forced its way, filing 60% of all claims in“ bulk filings a few days before ”the November 16, 2020 cutoff.
Potential plaintiffs have been encouraged through marketing on YouTube, social media, and SMS explosions. Insurers say the groups also “ran thousands of television, radio and Internet advertisements that were riddled with falsehood”.
These included “untrue statements” that claims could be filed “anonymously”, that the Boy Scouts had set up a $ 1.5 billion fund for disbursements, that compensation was “guaranteed” and that applicants would not have to appear in court, say the filings from insurers. The ads were so deceptive that in September Judge Silverstein ordered attorneys to stop posting “false and misleading” information.
The lawyers also hired claims aggregators, which are private companies that use call centers and advertising to create claims. These processors “either sell the claims they generate or work under contract,” the court records say. The plaintiffs’ attorneys used hedge fund money to buy accounts receivable, with the financiers “repaying their investment with the [Scouts] Litigation, “it says in the documents.
The insurers have presented forensic evidence to the court, which suggests the attorneys likely didn’t even read what they filed. A coalition attorney allegedly signed 890 “Proof of Claims” in a single day – one every 32 seconds, assuming eight hours. Another appears to have signed nearly 800 blank forms for others to fill out later.
It’s no wonder that preliminary investigation from two insurers found that 11,676 claims appear to be duplicates. More than 7,000 do not identify a perpetrator. Around 4,700 do not identify any affiliation with scouting. More than 1,500 have been the subject of legal disputes. And 54,000 seem to be barred. Thousands more were only signed by a lawyer, not a petitioner. A review of the public information also revealed applicants convicted of tax fraud, forgery, identity theft, false insurance claims and child abuse.
Insurers are demanding the discovery of a sample of applicants as well as the methods used by 15 of the plaintiffs’ most prolific lawyers. Judge Silverstein held a hearing last month and this should be an easy phone call.
Bankruptcy law calls for discovery and fairness requires it. Paying out for fraudulent claims would reduce funds for legitimate victims. In particular, the original law firms appointed by the bankruptcy trustee to protect the interests of the victims are not opposed to exposing the claims of the criminal coalition.
The Deliktsbar uses these tools of mass destruction in many cases (see Opioid or Roundup Litigation), but the Boy Scouts case is the first to be based on sexual allegations. Judge Silverstein has the ability to stop these abusive tactics in this case – and deter them in the future – by subjecting them to legal and public scrutiny.
Journal Editorial Report: The Best and Worst of the Week by Kim Strassel, Jason Willick, Kyle Peterson, and Dan Henninger. Image: Getty Images Composite: Mark Kelly
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