Numbers Talk: The Case Against Tort Reform

Numbers Talk: The Case Against Tort Reform

Lawsuits lead the way to prohibition of asbestos, lead, and other deadly toxins.

"To this day, the NHTSA, the Food and Drug Administration, and even the Occupational Safety and Health Administration, federal agencies that are often inattentive, can be jolted into some action by the evidentiary fallout from plaintiffs claiming tortious harm in state or federal courts,”

wrote Ralph Nader in an article published in Harper's Magazine.

The article also referred to polluting industries, defective car manufacturers, and many other defendants, whose systematic violations have been exposed as a result of lawsuits.

As I explain in my upcoming book, Corporate Serial Killers, massive corporations have, over the past two decades, eviscerated the civil justice system so that courts are powerless to stop companies from choosing not to fix defective products even though they know that those products will kill people.

These companies have a new legal license to kill.

Yet, even after this comprehensive tort “reform” that has destroyed the legal and constitutional rights of normal people, these companies want more. They argue that we need more tort “reform” in order to limit the amount of money that plaintiffs can be awarded because the majority of complaints filed in the U.S. are frivolous.

This is not only false, it also hides a clever sleight-of-hand.

Did you ever wonder why, after so many years of new laws limiting lawsuits, the companies are still arguing that most lawsuits are frivolous? Because none of these new laws have anything to do with frivolous lawsuits. These massive corporations talk about frivolous lawsuits while they lobby for laws that destroy a grieving family’s rights in a righteous lawsuit.

Let’s look at some facts.

In recent years, tort cases amount to 4% to 7% of civil cases, and a far smaller percentage of total cases. The entire civil caseload, which includes all non-criminal cases, has been steadily declining for some time now. Between 2009 and 2015, it fell by more than 4 million cases. In 2016, it declined by another 1 percent.

It gets even more interesting. A study by the Conference of Chief Justices found that only 0.2 percent of civil cases end in judgments surpassing $500,000, while the majority of tort cases result in judgments amounting to a meagre $12,000 or less.

The largest supply of civil cases is consistently provided by contract-related litigation, which amounted to 47 percent of the total of civil cases in 2016, according to an analysis of 26 states, which include Alaska, DC, Washington, Nevada, Alabama, Arkansas, Connecticut, Kentucky, Kansas, Georgia, Utah, Maryland, and Puerto Rico.

Simply put, multi-million dollar tort cases are rare. Statistics also show that people who are injured as a result of someone’s negligence seldom file any type of complaint. A few years back, the Rand Institute for Civil Justice found that only 2 percent of them actually file a lawsuit. 

So, if tort cases have pioneered protections to protect people from corruption, pollution, and the like, why is there such a momentous drive for tort reform in the U.S. today?

Nader explains it in his article, though referring to a different time:

“In the mid-Seventies, tort reform became a virtual sub-economy that crossed industry lines. Aggressive corporate forces aligned with political candidates to press for deregulation. These amply funded corporatists and politicians—crueler, hungrier for power, and more ruthless than their predecessors—worked to repeal laws that protected the rights of injured people to recover adequate compensation for harm inflicted by defendants.”

If we look at the amounts paid by corporations to resolve major lawsuits, where fatal victims are often involved, and put them side by side with annual profits, it is easy to understand that today, after all the new laws passed by these corporations, settlements and verdicts seldom have the power to act as deterrents. Is $10 million in punitive damages going to deter a company with billions in annual revenue from engaging in misconduct, especially when the misconduct earned the company far more than $10 million?

The answer today is certainly, “No.”

Such corporations can usually afford aggressive teams of attorneys, working full time for many months, and sometimes years, with the sole purpose of making both plaintiffs and attorneys run out of money. The big punitive verdict is not enough even when it happens, but it rarely happens because of the leverage these companies have.

They can afford to make victims doubly miserable, and they do.  

The additional laws that these companies are proposing would make it even worse. Many of these laws are designed to increase the cost to plaintiffs of bringing lawsuits, while limiting the recovery. Obviously, it is not feasible to bring a case that costs more than can be recovered.

American Bar Foundation researcher Stephen Daniels has discovered that “advocates of lawsuit restrictions have succeeded in making many tort cases economically impossible for trial lawyers to bring,” according to the Wall Street Journal.

Lawsuits are good. America is safer because of them. Lawsuits force companies to fix deadly defects. Many people are alive today only because of lawsuits in the past.

But if these lawsuits are being eliminated today, then what will the future look like?

What kind of world will our kids live in if companies have a license to kill and the courts cannot stop them?

In July, 2017, the Wall Street Journal attributed the decline in tort lawsuits to “a long campaign by businesses to turn public opinion against plaintiffs and their lawyers,” among other factors. The president of the U.S. Chamber Institute for Legal Reform told reporters that, “The American public wholeheartedly agrees there are too many lawsuits in the country.”

That is the perception, and that perception about frivolous lawsuits is the cover these big companies need to get laws passed limiting righteous lawsuits.




You might also like: