Lack of Transparency

Freely competitive markets are characterized by the presence of many comparable producers of goods or services with prices that are published and readily discovered. Consumers are fully informed and register their personal preferences through choices based on that perfect information. Information about the prices charged by service providers must be easily available in terms that are meaningful to consumers; that is, the units in which the prices are stated must convey sufficient information to enable consumers to make price comparisons. In addition, consumers must be able to determine the relative quality of the service providers vying for their business so that they can make informed price/quality tradeoffs in selecting a provider. Producers respond to the consumer demand for information by campaigning aggressively to provide it – an effort that epitomizes interfirm competition. To diminish incentives for existing firms to collude, it is also necessary that firms be able to freely enter and exit the industry.

Though the market for tort claiming hosts many producers, virtually all of the other components of a competitive market, particularly perfect or even adequate information, are absent. Awareness of price in the tort market requires knowledge of the value of claims. This is so because consumers pay a contingency fee for a lawyer's service by exchanging a share of their claims.