Well, either the plaintiffs withdraw their claims, or the business being sued pays cash out of court, guessing that paying off the plaintiff will cost less than the legal expenses incurred in a court case. In fact, most companies have a fund (and insurance) specifically set aside for just such an event. I used to work for a firm which dealt with Property and Casualty insurance, so I'd see these sort of cases all the time. In the long run, the money only ends up coming from the taxpayer- as it's covered by higher insurance costs, higher product or service costs, or higher taxes (for government related cases), or reduced wages or layoffs for companies badly stricken by these sort of cases.
As a footnote to how bad the cost problem can get, there's a rapidly developing shortage of doctors in Nevada; due to a sharp rise in the cost of malpractice insurance, many doctors can no longer afford to work there.
This comment was edited on Mar 12, 11:13.