Business makes an product and sells it for a profit. They pay for insurance which offers coverage to the business for a profit. The insurance company ensures that an injured person can recover some of the care costs, lost income etc when the business has injured them or killed a loved one. That is the unstated benefit of insurance is that it benefits both sides - the business owner is free to make money and the injured person is saved from being destitute when they are injured. It is actually a good thing for society. The lawyer funds the payment of experts. Buying medical records, hiring investigators....last trial I did against a doctor who put 50 holes in the bowel of a carpenter rendering him a gastric cripple, required me to fund $75,000 in expenses. If we don't win ain't no one paying it back to me because he can't work anymore. So the contingency model allows him to go after the doctor who has destroyed his bowels. No way could he afford to tackle the medical establishment otherwise. And, if successful I anticipate...wait for it...a profit.
Really. Is that how business works? I ran a $750m piece of a major defense company for a decade so I actually understand profit. It is a healthy thing and the basis of a capitalist economic system. And I believe much of our plaintiff litigation has become a parasitic drag on that economic model. I certainly agree that insurance is both a necessary and worthwhile industry. What is skewing the system is frivolous access to the judicial system without consequence and the outrageous judgements enabled by the federal government through legislation such as the Clayton Act. And judging by the commercials and billboards in this area, I am convinced there is a lot more hustle taking place than noble defense of defenseless. Regrettably, it will take legislation (regulation as you say) to get this legislatively enabled mess back under control.