Agustin Turley's blog ::Biden's Ties to Trial Lawyers
Abstract: Proponents of tort reform state that the litigation system is unreasonable, capricious, and counter-productive. Proponents assign blame for the problem on many variables such as civil juries who are responsible for awarding high dollar settlements with little relation to the merits of plaintiffs' claims. Proponents place blame on lawyers for being greedy because lawyers make incredible sums of money from filing frivolous lawsuits and winning those cases. Critics of tort reform dispute that studies illustrate a legal system that is steady and conventional. The system has the capability to sort legitimate from frivolous claims. Critics say that even as it is possible to change the liability system to address the shortcomings, tort reform proposals like monetary caps on non-economic damages and attorneys fees will not do so. The objectives of these proposals aim to lessen insurance premiums by making the system a lesser amount of remunerative for claimants. If caps on damages are implemented it will only produce the dilemma of under-compensation for the most harmed and provide less incentives to look after those from danger. Introduction: There has been an immense deal of debate over the reform of the United States tort system. To recognize the argument we must understand what is being transformed.A tort is an injury to someone's person, character, mind-set, or damage to real property. Under the U.S. system of tort liability, courts can hold injurers liable for many different types of torts, such as those caused by medical malpractice, flawed products, automobile accidents, contract fraud, and trespass. A plaintiff can seek out compensatory damages to cover the economic cost of an injury. Examples would be medical care costs and lost wages related to a specific injury. They can also ask for damages for the non-economic costs of pain and suffering and punitive damages. Punitive damages are intended to reprimand a defendant for willful and wanton conduct. Tort law is based first and foremost on common law in which judicial regulations are developed on a case-by-case basis by trial judges rather than on legislation. Legal scholars agree that tort liability has grown over the years creating more opportunity for victim compensation in areas of medical malpractice and product liability. The idea was broad tort liability would compensate injured parties and reduce the level of accidents. The anxiety is the tort system has gone too far in awarding high dollar award settlements thus reducing growth of business in the United States. The Issues: Medical professionals and businesses operate with excessive costs that lead to higher prices for consumers based on costs associated with insurance premiums that provide liability when a lawsuit occurs. The following chart illustrates the rise in medical malpractice costs based on tort costs. American corporations complain the costs put them in an unfair competitive position when competing in the global marketplace. Several other issues about the tort system are attorneys' fees are too high, punitive damages and compensatory damages for pain and suffering are often awarded arbitrarily. Businesses claim class action suits are easily abused by attorneys. Doctors claim that medical malpractice lawsuits are driving up the costs of liability insurance for physicians to the point that some of them are restricting their practices, retiring, or not entering the field. There is also concern that fair compensation for victims of torts is limited by frivolous lawsuits and excessive awards of non-economic damages, which increase the likelihood of bankruptcy for businesses. The proliferation of lawsuits has created fear of the tort system among businesses. Instead of concentrating on support of deregulation at the federal level, lobbyists are more concerned about the tort system. This leads many industry associations to actually want federal agencies to have more regulatory authority with regards to the tort system. Critic's challenge that if lawsuits hurt businesses and slow the economy as much as is being declared then how it that CEO's of Fortune 500 companies are being compensated with bonuses and stock options year after year. If businesses were damaged as much by lawsuits as claimed could they really afford such generous pay increases or bonuses to their CEO's? What has been done? Since the 1980s a number of states enacted statutes restricting tort lawsuits. The statutes were enacted in response to problems in insurance costs and availability. The idea is that by limiting the exposure of firms the liability insurance premiums they would have to pay would decrease. The chart below depicts the states that have total damage and non-economic caps established as of 2006. Despite reforms at the state level there are many people who see a role for a federal approach to regulate caps on damage claims. Because all states do not have a cap most states are in favor of federal regulation to make laws standardized for businesses that manufacture and sell goods and services in multiple states. This would limit venue shopping which is a practice in which a plaintiff has the ability to choose what jurisdiction to bring a lawsuit in to find one where the laws are most favorable for their claim. Large and unique liability cases such as asbestos and tobacco would benefit from a federal standardized approach to regulating or implementing a cap on damages. In response to these concerns recent legislation has been introduced and passed. President Bush signed Public Law No: 109-2, the Class Action Fairness Act of 2005. The goal is to reduce lawsuit costs by sending more state cases over to federal courts, where stricter rules on class action suits tend to result in less favorable judgments. Proponents of the law recognize that while class actions can be important for corporate accountability they have also seen considerable abuse. Proponents claim lawyers invent their own clients and bring claims in jurisdictions considered compassionate or sympathetic to hear their case. By threatening these large lawsuits they are in effect extorting settlements that enrich them while giving very little to clients who may not have even been aware of the litigation. By moving the cases into federal court the lawsuits will face stricter rules and consolidation of claims will be easier to handle versus a case by case decision. Critics of the law believe that since nearly all major class-action lawsuits would be moved from state courts to already over packed federal courts with new bureaucratic obstacles and backlogs the cases would be postponed or deprived of equal justice. Critics feel it would discourage plaintiffs from pursuing legitimate claims in the first place thus allowing a company to go unpunished. The United States House of Representative passed Bill Number:HR 5, Malpractice Liability Reform. The bill sets forth provisions regulating lawsuits for health care liability claims pertaining to the provision of health care products or services or any medical product involved in interstate commerce. It would also set a statute of limitations of three years after the date of an injury or one year after the claimant discovers the injury. HR 5 provides that nothing in this Act limits recovery of the full amount of available economic damages. HR 5 limits non-economic damages to $250,000. It provides for comparative negligence which makes each party liable only for the amount of damages directly proportional to such party's percentage of responsibility. The bill authorizes the award of punitive damages only when it is proven by clear and convincing evidence that a person acted with malicious intent to injure the claimant or deliberately failed to circumvent unnecessary injury they knew the claimant was substantially certain to suffer. HR 5 limits punitive damages to the greater of two times the amount of economic damages or $250,000. Plus it limits the liability of manufacturers, distributors, suppliers, and providers of medical products that act in accordance with Federal Drug Administration (FDA) standards. Critics of limiting liability of those who comply with federal standards mention the situation that happened in Michigan. Former Governor John Engler signed a bill prior to leaving office preventing citizens from suing pharmaceutical companies for injuries caused by drugs approved by the FDA. Michigan citizens who were injured or killed by Vioxx, Zyprexa, or any other FDA-approved drugs have no legal recourse to sue to recover their medical bills. Who ends up paying if the pharmaceuticals don't have to? The injured person's medical insurance does, if they have insurance or they have to file for bankruptcy. The outcome then requires insurance companies to raise health insurance premiums to make up the difference. If an injured person has no insurance or money to pay the doctors and medical facility that provided such treatment they will be forced to take a loss on the medical claim. In turn the medical facility or doctor will raise their fees to make up for the loss. If an injured person is on Medicaid then the taxpayers pay the costs. Critics contend it is clear this type of legislation will do nothing to prevent rising health care costs or help the average person receive reasonable affordable healthcare. Many who support HR 5 consider that limiting damages is the solution to the broader challenges confronting the U.S. health system. In their view, capping damages will lead to lower malpractice premiums and will reduce doctors' use of unnecessary tests and procedures that are considered defensive medicine versus preventable medicine. This will result in lower costs of care allowing more people to afford insurance coverage. Those on the other side of the argument point to an analysis by the Congressional Budget Office which stated that the malpractice bill would benefit physicians and the government but would only decrease private health insurance premiums 0.4 percent if that taking into account inflation. The American Academy of Family Physicians (AAFP) supports placing caps on medical damage lawsuits. They allude to a study on their web site in which the authors state that total caps and hard non-economic damages caps could provide for lower premiums for malpractice insurance thus lowering the cost of health care in the long run. If insurance companies could predict the worst payment on a claim and the extent of the liability exposure their clients have they can adjust premiums. Critics contend that will not protect the public from medical malpractice. As the graph represents above the average claim for medical malpractice in the United States in 2007 was $323,733 with a total cost for all states equal to $$3,717,105,850 ("The Henry J. Kaiser Family Foundation"). These costs are passed on to citizens that use health care and are increasing costs on services and products year after year. One of the reasons that jury awards are so high has to do with punitive damages. Punitive damages are used to punish a party who did something that the jury wants to make sure never happens again, such as deliberately manufacturing and selling a product that is dangerous to the public or hiring an employee in a sensitive position who failed a background check. Unfortunately, in corporate America the most effective way to dissuade a company from unethical or illegal activities is to reprimand them financially. Taking money echoes louder than any other deterrent available to ruling in a lawsuit. Juries who want to punish those who commit acts that are intended, malicious, or egregious do so by awarding punitive damages to a claimant. Punitive damage awards can be looked upon as a fine. Instead of the court collecting a fine the punitive damage award goes to the plaintiff of the lawsuit. Occasionally, juries are outraged by a defendant's behavior in court and award disproportionate punitive damages to a claimant based on emotions. These verdicts are reported to the public creating the perception of greedy plaintiffs and lawyers just trying to make a quick monetary amount. What is not always reported are the conditions that caused the jury to award the verdict to a claimant? One such example is the following: Knowing that a company was making over $1.3 million dollars a day selling a product that the company knew could cause second and third degree burns to their customers and during the ten years they sold the product that over 700+ people who received burns during this time. Also, the product is sold as harmless; however, the product can cause third-degree burns to the skin within two seconds when dropped on the customer's skin and the company refuses to fix the product even though it would cost very little. These facts represent the famous McDonalds coffee burning case that is used as one of the main anecdotes for the argument for tort reform. McDonalds sold coffee at 180-190 degrees for ten years. Over 700+ people had been burned during this time that was reported anyways before this case. McDonalds refused to lower the temperature of their coffee. Stella Liebeck from Albuquerque, New Mexico was the woman who brought and won the famous case. She was 79 years old and received third-degree burns to her legs, thighs, and genitals when her cup of coffee spilled on her lap. The hot coffee soaked into her pants, and she was unable to prevent the burns. She had to go through excruciating two years of painful skin grafts and was left with permanent scars. She offered to settle for $20,000 the amount of her medical bills and McDonalds offered her $800 so without compromise the case was taken to court. Although the huge $2.7 million dollar verdict was widely reported the judge in the case reduced the award to $480,000.00 and it was later settled for an undisclosed amount to avoid a lengthy appeals process. Although tort reformers cite this case as a need for a change in the legal system one fact they forget is the day "after the verdict the temperature of McDonald's coffee was changed to 158 degrees" ("Public Citizen"). You would have to say in this case the tort system worked at least in the claimants view by changing the operational procedures of McDonalds in how they heat their coffee. Why Tort Reform? Whenever there is discussion of tort reform- damage caps are always at the top. When you think those who are most harmed by damage caps are those people who have suffered the greatest damages. We can take a look at what other countries are doing to eliminate frivolous and huge monetary awards for claims. The tort systems of European nations are similar to the American system. There are some aspects that put the United States legal system in the position or open it to the criticism it receives. The United States does not make the losing party responsible for the legal fees and costs of the person winning a claim. American law places no limitations on contingency fees. American law has a very soaring volume of civil jury trials. These issues support exploratory tort litigation and that is one of the biggest problems facing the American tort system because the greed of lawyers and citizens looking to make money. An exploratory claim is a claim whose success does not depend on the legal merits of a claim as much as they do on good fortune by settling or convincing a jury that damage did occur. For example, the Dow Corning breast implants case where attorneys forced the bankruptcy of Dow Corning despite the lack of scientific evidence supporting their claims of the danger of silicone breast implants. Most people in the scientific field do not believe silicon implants are dangerous. The plaintiffs' causation theory is contrary to the scientific evidence. The cases are brought by plaintiffs' attorneys who know the case has a high economic potential and a jury can sometimes be persuaded to issue a ruling contrary to the scientific evidence based on performance in a court room. The attorneys play the game of "pitiful ole me" by painting a picture of presumed guilt on the company thus removing a ruling from evidence based to a sympathetic ruling by a jury. Many other cases are brought to trial with the intention of performing a fishing expedition by a party. You can go through all of the defendant's internal documents through discovery for a very minimal investment. If an attorney gets lucky there could be a document in the company's files that are damaging and the attorney will be able to compel a large settlement versus going to trial without much investment in the case. Another good example of fishing expeditions, if you're in a automobile wreck in North Carolina you will be overwhelmed with advertisements from lawyers, chiropractors and automobile shops even before you file a claim with an insurance provider. Why is this allowed? Those specific professions will purchase your accident report from the police department along with all your contact information on that form. We can think "Public Records Request" statutes for this because this increases costs for insurance and medical care where those professions are looking to make a quick settlement out of court. North Carolina would be a great target for tort reform from frivolous claims by eliminating this process of allowing those professions to contact people that have been involved in an accident. In most countries outside the United States civil trials are not decided by a jury. The need for juries in civil trials is not the same as criminal trials. England began to restrict the use of juries in civil trials in 1933, and Australia, Canada, and Scotland have all followed suit. In England today, the jury is used in less than 1 percent of civil cases. Juries in civil cases do not always make coherent decisions with the information presented to them. A trial lawyer can never predict what combination of principle and prejudice will motivate the jury in a case. Juries are not allowed to make clear the reasons for their decisions in a particular case. This means their verdicts have no value to provide guidance in similar like cases. Juries are not bound by judicial opinions and do not have to reject prior claims based on the same evidence. Attorneys in the United States can play litigation lottery hoping for an easy case to either settle or win over a jury. They can bring the claim before several juries hoping a few awards will over compensate for a larger number of losses. The reason judges should preside over these types of cases is because judges state the reasons for their rulings and if a judge issues a reasonable opinion to reject an uncertain claim other judges will respect the judgment and bring the litigation to an end. Another large problem with juries is they often do not identify with the evidence put before them or the use of legal jargon used in a courtroom by attorneys. A study conducted by the American Bar Association found problems with jurors being able to understand multifaceted evidence presented in a case. The study found that jurors have a tendency to ignore complicated expert testimony offered to them. This adds to the difference of opinion that judges who are often better educated than jurors also have many advantages in making a ruling in a case. They have the aptitude to ask for and study written argument. Judges can also seek advice from outside experts if they need to on a specific subject involved in a case. Some people dispute that judges in states where they are elected officials have an enticement to favor in-state plaintiffs over out-of-state corporations in product liability cases. Judges must validate their rulings in writing. A judge forced by considerations other than legal considerations will need to issue an opinion justifying the findings on legal and balanced ground and if judges cannot a higher court will overrule their decision. Juries can make their rulings on emotion or other interpretations and not always based on legal evidence. Juries' rulings are upheld if there is any evidence supporting their position in a case. Judges written opinions are openly available and they have their professional reputations at stake in making a decision regarding a case. Civil jury trials can not be dissolved because the Seventh Amendment of the Constitution requires a civil jury in federal trials if requested by any party. Courts have the authority to grant pretrial summary judgment to either side if the other side is not able to show a justifiable issue of material fact. Summary judgments have become a priceless tool for defendants in complex cases involving a plaintiff seen as the little guy against large corporations. Courts have also found the best way to stop juries from relying on bad scientific testimony is to screen it pretrial for justifiable evidence. Another way to determine the amount of damages is to have the jury choose if damages should be awarded and have judges decide on the amount of the award. Judges determine sentencing in criminal cases where as the jury determines guilt. By having judges decide on amounts of award in cases found by juries that the plaintiff is justified in receiving compensation would curb unjustifiable monetary awards. Conclusion: The determination of liability and the amount of the award for compensation directly affects the actions of potential defendants. By placing monetary caps on damage awards the wrong message is being established. Those people who are the most harmed would be harmed to a greater extent with caps in place thus putting the financial burden on them to live with. In the case of Jessica Santillan who lost her life because of mistakes made by physicians at Duke Medical Center would $250,000 be adequate compensation? It is very difficult to make the case that it would be based on the outcome of those events. When you know all the facts behind the McDonald's coffee burning judgment the award does not seem so outlandish. Civil trial monetary awards play an important role by encouraging appropriate behavior and accountability to provide the American people safe products and non-negligent services. Any legal reform must take the anecdotal evidence and outrageous claims by both sides of the argument and replace them with reliable statistics and open dialogue among all parties. We need to find a common ground that address the problems faced by our tort system and then work toward real solutions that are justifiable and compensate a legitimate victim for reasonable expenses based on their specific case. Bibliography: 1. Franklin, Will. "Tort Reform." 07 Feb. 2007. November 10, 2008. < www.willisms.com/.../02/trivia_tidbit_o_415.html.> 2. "Get Tort Reform Right." January 10, 2005. Page A16 © 2005. The Washington Post. 3. House Resolution, H.R. 5, Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2005. 4. Legal Myths: The McDonald's "Hot Coffee" Case. Public Citizen. November 30, 1999 5. Liebeck v. McDonald's Restaurants, No. CV-93-02419, 1995 (N.M. Dist. Aug. 18, 1994). 6. "Medical Malpractice: Impact of the Crisis and Effect of State Tort Reforms." May 2006. The Robert Wood Johnson Foundation. November 5, 2008 7. "Payments on Medical Malpractice Claims." 2007. The Henry J. Kaiser Family Foundation. November 7, 2008. 8. "Procedural Tort Reform, Lessons from Other Nations." David E. Bernstein, 1996, Vol. 19, No. 1. Copyright 1997 Cato Institute. 9. Public Law No: 109-2, 109th Congress: Class Action Fairness Act of 2005. |
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