Personal Injury Tort - Is It Broken?

Posted on May 26, 2009 by Greenberg & Bederman

The Tort System: It Stops Being “Broken” When It Starts Being You

For those of you are unaware of what tort reform means, it is a political movement whose proponents believe that our current judicial system is too easy for regular people to use. That probably isn’t the way that they would put it, but that’s essentially the centerpiece of the argument. They want caps on the sorts of damages that citizens can receive. They want restrictions on the sorts of lawsuits that people can file. They want severe restrictions on punitive damages. They want to do business in America without the crushing, stagnating, profit killing responsibilities of accountability towards the people who buy their products or use their services.

It isn’t very hard to put yourself in their shoes. The majority of the people involved in the tort reform movement have direct ties to insurance companies, pharmaceutical companies and product manufacturers. They often think of things in terms of profitability, and they probably view lawsuits as a problem that is to be solved, like improving efficiency or finding a cheaper supplier for parts. If you see everything in terms of a balance sheet, it’s hard to see actual human beings who have suffered real damages from the results of your business. Instead you think about the money you could be making if it weren’t for the insurance premiums and attorneys fees.

 

But every so often, even staunch advocates of tort reform find themselves in instances where they need the aid of the courts, and that makes them rethink their whole outlook, especially when they discover that the tort restrictions that they supported have prevented them from receiving fair compensation for their damages. Former senator Trent Lott (R-MS) serves as a perfect example of this.

In the wake of Hurricane Katrina, thousands of people in Louisiana and Mississippi found themselves with their homes ruined by the devastation of a category three storm. Katrina lasted almost a week, and at its peak the wind speed was moving at 175 miles an hour. The preliminary damage estimates in terms of property was $100 billion.

Among those who found themselves with lost property was Senator Lott. He owned a beach house in Mississippi that was deemed a total loss as a result of the hurricane. Like thousands of people all over the Gulf Coast, he filed a damage claim with State Farm. And, like thousands of people all over the Gulf Coast, he had his claim promptly and utterly rejected by State Farm.

It’s important to note that prior to this rejection, Senator Lott was one of the biggest advocates of tort reform in the Senate. Here are just a few of his quotes and press releases on the subject.

"The Democrats seem to think that the answer is a lawsuit. Sue everybody."
- Sen. Trent Lott, 7/20/01

"I'm among many Mississippi citizens who believe tort reform is needed."
- Sen. Trent Lott, 5/8/02

"You know, obviously we should [enact tort reform]...Someday it will happen, and the sooner the better."
- Sen. Trent Lott, 1/24/01

"Sen. Trent Lott of Mississippi today credited the agenda of tax cuts, deregulation and tort reform initiatives passed by the Congress and signed into law by President Bush with the overall upturn in the national economy."
- Sen. Trent Lott press release, 12/2/05

"If their answer to everything is more lawsuits, then yes, that's a problem, because I certainly don't support that."
- Sen. Trent Lott, 8/2/02

"It's sue, sue, sue... That's not the answer."
- Sen. Trent Lott, 8/4/01

But once Senator Lott got a taste of how the very industry that he backed through speeches, votes on the Senate floor and legislation actually operates, he didn’t much like it. So he filed a lawsuit against State Farm, in which he hoped to force the insurance company to pay for his damages.

A more recent and even more high profile defection from the tort reform movement occurred on June 6, 2006, when Judge Robert Bork fell and injured himself while getting ready to deliver a speech at the Yale Club in New York City. According to the Wall Street Journal:

“Bork was at the Yale Club last June to speak at an event sponsored by The New Criterion, a monthly review of the arts and intellectual life. According to the suit filed in federal court in Manhattan, the club failed to provide steps and a handrail to climb onto the dais. Bork fell backward as he was attempting to climb the dais, striking his leg on the stage and his head on a heat register, the suit says.”

The physical damages involved a massive bruise to his leg that, according to the complaint, required surgery and months of physical therapy to heal properly. Judge Bork believed that the Yale Club was negligent in that it didn’t provide a suitable railing or staircase on the way up to the speaking dais, thus directly contributing to his injuries.

Prior to his accident, Judge Bork was very much for tort reform. In fact, one of his more famous quotes on the subject compared the United States civil justice system to piracy on the high seas:

“Courts are now meccas for every conceivable unanswered grievance or perceived injury. Juries dispense lottery-like windfalls, attracting and rewarding imaginative claims and far-fetched legal theories. Today's merchant enters the marketplace with trepidation - anticipating from the civil justice system the treatment that his ancestors experienced with the Barbary pirates.”

This quote was from 1995, but it basically encapsulates Judge Bork’s entire judicial career. He held the tort system in very low regard, and actually lost his chance to be a Supreme Court Justice in part due to his extreme views on tort law and punitive damages. Yet there he was in 2006, filing not only a lawsuit to cover his damages but also seeking punitive damages in his complaint.

In the space of three years, two major proponents of tort reform have learned a very valuable lesson, which is that perhaps our tort system isn’t nearly as “broken” as it seems to be. The initial reaction would be to call Senator Lott and Judge Bork hypocrites, but we actually view it as an example of how ideology doesn’t always line up perfectly with reality. They believed something, and real life proved their beliefs wrong. They believed that our court system was broken right up until the point where they discovered that they would need it.

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Obama on Tort Reform

Posted on December 16, 2008 by Paula Strand

Barack Obama on Tort Reform
   The new government is poised to take over in a little more than a month. Hence, I thought it would be a good time to take stock of where our President-Elect stands on the tort reform debate, and what we can expect to see in the next four years on the personal injury front. As discussed in the previous article on tort reform, the term tort reform stands for legislative measures designed to limit plaintiffs’ recovery and to make it harder for individuals to bring claims against businesses in general. So, does Barack Obama support limiting recovery for personal injury claimants or does he advocate increase in the discretionary decision making power for juries and state courts?

   So far Obama has manifested mixed signs pointing in both directions. As a Senator, Obama was one of the few Democrats who voted for the Class Action Reform Act (CAFA). The Act was criticized by the Plaintiffs’ bar as hurting personal injury claimants. Perhaps this was a chance for Obama to show that he can transcend party lines. Critics claim that his votes on legal issues have been carefully designed to create an image of evenhandedness that may disappear when he is in office. They claim he voted for CAFA only after it was clear it would pass, and did so after voting for several Democratic amendments that would have gutted the bill. The Act made the requirement of “complete diversity” of citizenship inapplicable to class actions, and provided federal jurisdiction when some class members and some defendants are from different states. It also eliminated the principle that the claims of class members cannot be aggregated to meet the amount-in-controversy requirement, and provided for federal jurisdiction when the total amount in controversy in a class action exceeds $5 million. The effect was to allow most class actions with classes or defendants including citizens of more than one state to be filed in or removed to federal courts known for their tougher stance on granting injury awards.
 

Nevertheless, it appears that Obama can still be redeemed. He supports allowing juries to make a determination in tort cases with respect to how much compensation should be awarded. Moreover, Obama and Clinton were among those who introduced the Medical Error Disclosure and Compensation Bill which would have allowed doctors to more freely communicate with their patients after errors are committed. The Bill would have mandated a vast data-collection system to track medical errors and encouraged injured patients to negotiate settlements rather than sue. In 2006 Obama and Clinton co-authored an article in the New England Journal of Medicine, “Making Patient Safety the Centerpiece of Medical Reform” noting that studies show that the most important factor in people's decisions to file lawsuits is not negligence, but ineffective communication between patients and providers. Malpractice suits often result when an unexpected adverse outcome is met with a lack of empathy from physicians and a perceived or actual withholding of essential information. More information will stem the proliferation of malpractice lawsuits, but it also creates a risk of increased liability for the medical providers.

   Finally, appointment of the judiciary is an area where the new administration can have a major influence on the personal injury field. Judges are one of the most effective ways the candidate can implement his vision on the ground. Actuarial statistics suggest the president will nominate one and possibly two Supreme Court justices to join the court, now led by conservative Chief Justice John Roberts.

   The President Elect is taking a middle ground leaning toward greater recovery for the injured party. Neither being totally for or totally against every tort-reform proposal makes good sense and good public policy. The issues raised are complicated and need to be looked at with regard to the legitimate rights of both injured plaintiffs and accused defendants — assuring that all litigants get justice and that our justice system is efficient and fair. There is no simple fix that can assure that the injured are fully compensated and that defendants are treated fairly both when blame is assigned and when damages are measured.

 

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