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This isn't really a low trust society, it's a litigious society problem.

These lawsuits aren't a myth, if you hire a lot of people it'll eventually happen, even if you're not violating any laws. The lawsuits, even when you win, waste time and money. Giving reasons, especially customized "human" responses is absolutely going to increase your chances of being sued.

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Low trust means assuming any and all reasons given out will result in lawsuits. It's precisely a symptom of a low trust society. A not-low trust (doesn't have to be high trust) society wouldn't assume legitimate feedback would be litigatable, and likewise candidates wouldn't be in such bad situations that they'd need to sue every rejection.

As you said, lawsuits take a lot of time and money. Individuals don't have that and would prefer to settle things privately. But if they don't trust institutions to do that, then the only thing to trust is the contract of a lawyer.

Individuals without jobs have a lot of time since they don't have a job, and can find lawyers willing to work on contingency.

More time than average, less money than average. But these people also need to apply to dozens of jobs, more likely hundreds. They can't sue every place.

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