Your buds are at it again.
Tort Reform Now
By George F. Will
Sunday, September 29, 2002; Page B07
In the casino that tort law has
become, wild wagers are becoming
routine. A family sues the Weather
Channel for not forecasting the
storm during which a family member
on a fishing trip drowned. A man
sues six bars and liquor stores and
the electricity company because of
injuries he sustained when, while
drunk, he climbed over a fence with
a locked gate and scaled an
electrical tower. And then there is
Mississippi.
The U.S. Chamber of Commerce's
recent warning that its members
should avoid doing business there
was not "big business" picking on
the poor. Ninety-six percent of the
Chamber's member businesses have
fewer than 100 employees, and 75
percent have fewer than 10. And Mississippi needs business more than any
other state. It ranks 50th among the states in per capita income ($21,750 --
half of Connecticut's top-ranking $42,435).
But in the Chamber's survey of 800 corporate counsels, Mississippi's liability
system ranked worst in the nation. Worst in terms of judges' competence,
judges' impartiality, juries' fairness (there have been 21 jury awards of more
than $9 million since 1995), the use of technical and scientific evidence,
overall treatment of tort and contract litigation, and timeliness of summary
judgments and dismissals.
Now, Mississippi is not poor because of its liability system. However,
because of that system the state is poorer than it otherwise would be. A
recent study found that the system costs Mississippi 7,500 jobs a year.
Mississippi juries have awarded plaintiffs $1.8 billion since 1995. The
Mississippi law that allows plaintiffs to combine their cases with others
nationwide, along with a notoriously pro-plaintiff local judge, has made
Jefferson County (population 9,695) the wonder of the legal world: Between
1995 and 2000, some 21,000 plaintiffs sued there. No wonder Mississippi's
insurance commissioner says 71 insurance companies have stopped doing
business in the state.
Most Mississippi cities with populations smaller than 20,000 no longer have
obstetricians. They have fled skyrocketing jury awards and the consequent
high malpractice insurance premiums. In Las Vegas and surrounding Clark
County, Nev., 42 percent of ob-gyns recently said they are planning to leave
the state unless the liability crisis is solved.
The U.S. Chamber estimates that American consumers pay an annual $1,200
"litigation tax" in the form of lawsuit costs that businesses pass along to
consumers, including $60 billion to $100 billion for "defensive medicine" --
extra tests and other measures to avoid litigation. So the need for tort reform
is obvious.
So is the impediment to it: Jeffrey Birnbaum of Fortune says lawyers' and law
firms' political contributions in the past two years ($50 million) almost equal
organized labor's. In the 1999-2000 election cycle, lawyers contributed more
than labor. In this 2001-2002 cycle, the Association of Trial Lawyers of
America is the largest single contributor to federal candidates, with most of its
$2.3 million going to Democrats.
This is money that plaintiffs -- the injured parties -- did not get. The
president's Council of Economic Advisers estimates that 58 cents of every
dollar from tort settlements goes for administrative costs, defense costs and,
especially, fees for plaintiffs' attorneys.
Larry Lindsey, assistant to the president for economic policy, stresses that a
properly administered tort system enhances the efficiency and fairness of
markets. A right to appropriate compensation for a faulty or harmful product
is integral to a property right. But nowadays punitive damages are, as Justice
Sandra Day O'Connor says, quoting a 9th U.S. Circuit opinion, "limited only
by the ability of lawyers to string zeros together in drafting a complaint."
The threat of exorbitant claims, made in a context of judges' excessive
deference to juries ruling randomly -- in ways no reasonable person could
anticipate -- turns tort law into a tool of extortion. Except it is not law,
because due notice is not given as to what behavior triggers liability and what
standards control compensation.
By preventing agreement on reasonable limits to liability for terrorism
insurance purposes, the trial bar and its poodle, the Democratic Party, are
causing delays or cancellations of $10 billion in construction projects. Says
Lindsey, "Hundreds of thousands of jobs are being sacrificed in defense of
punitive damages."
The tort bar is also implicated in a potentially lethal liability crisis germane to
bioterrorism. There needs to be reasonable limits on the liability of vaccine
manufacturers arising from rare and unavoidable instances of harmful reactions
to vaccines. This is adversely affecting the development and availability of
medicines on which millions of lives could suddenly depend.
So remember the candidates who support tort reform when you vote on Nov.
5.
© 2002 The Washington Post Company
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