Author

Accident compensation, and particularly auto accident compensation, is typically
thought to take one of two dichotomous forms: either no-fault or traditional tort.
Further, conventional wisdom holds that while pure no-fault may be an option in
theory, it is not one in practice. No pure no-fault auto regime has ever been enacted
in the United States, and states these days are repealing, rather than enacting, modified
no-fault legislation. Yet something peculiar is happening on the ground. Far
out of the light of day, high-volume personal injury firms that I call “settlement
mills” are quietly achieving many of no-fault’s objectives—speeding recoveries,
lowering systemic costs, and delivering relatively standardized sums to an apparently
expanded set of clients—while ostensibly operating within traditional tort.
What settlement mills are accomplishing, then, is in some respects astonishing—and
certainly commendable. Yet, the fact settlement mills’ distinctive operations are out
of the light of day and rarely revealed to clients is problematic, raising profound
issues of informed consent and highlighting severe information deficiencies in the
market for legal services. A well-designed disclosure regime can preserve settlement
mills’ substantial benefits, ameliorate their unique costs, and, more broadly,
improve the tort system’s operation and address the vexing problem of attorney
choice.