Frivolous Law Suits

The odds are that you have never heard of a woman named Janine Sugawara. And the odds are that after a few months, her name will completely slip your mind.

But it is entirely probable that her recent lawsuit will put her in a somewhat notorious pantheon of “frivolous lawsuits,” which means that she will be given a title rather than a name by tort reform organizations. And she can expect this title to be bandied about for the rest of time.

As a bit of background, Ms. Sugawara recently filed a class action lawsuit against the Quaker Oats Company. Her gripe was that after four years of purchasing and eating Crunch Berries brand cereal, she discovered that there was no actual fruit involved.

Through the law firm that took her case, Ms. Sugawara’s intention was to collect damages not just for herself, but for everyone else who was bamboozled at the breakfast table. It should be noted the law firm that she was working with had previously filed an unsuccessful suit against the Kellogg’s corporation over the lack of actual fruit in Fruit Loops.

 

The presiding judge over the case quite rightly threw the case out of court, claiming in his statement:

“In this case . . . while the challenged packaging contains the word "berries" it does so only in conjunction with the descriptive term "crunch." This Court is not aware of, nor has Plaintiff alleged the existence of, any actual fruit referred to as a "crunchberry." Furthermore, the "Crunchberries" depicted on the [box] are round, crunchy, brightly-colored cereal balls, and the [box] clearly states both that the Product contains "sweetened corn & oat cereal" and that the cereal is "enlarged to show texture." Thus, a reasonable consumer would not be deceived into believing that the Product in the instant case contained a fruit that does not exist.”

As we said before, you probably won’t remember her name, but you will certainly remember her lawsuit. Ms. Sugawara will probably be known as “The Crunch Berry Lady,” and she will be lumped in with “The McDonalds Coffee Cup Lady” and the “Million Dollar Pants Guy.” She will be offered up as Exhibit A by tort reform organizations every time they are pushing for restrictions on the rights of regular citizens to go to court. In all probability, this ridiculous case will be offered up as proof that the system is somehow “broken.”

We would argue quite the opposite. We think that had the case been allowed to continue, then maybe the tort reformers would have a point. (In which case, the makers of “grape” and “orange” flavored soda would have had to seriously rethink the titles of their beverages.) But it wasn’t allowed to continue. It was recognized as ridiculous and thrown out.

One aspect of the tort reformers beliefs that we find profoundly troubling is that they seem to believe that you somehow need to QUALIFY in order to have access to the courts. They seem to believe that the only lawsuits that are important are theirs. Lawsuits that involve injuries and illnesses and poorly manufactured and dangerous products are considered bad for business and a waste of time. And we find that very hypocritical, because insurers, HMO’s, pharmaceutical companies and manufacturers of all shapes and sizes (in other words, those who fund and vocally support tort reform organizations) spend a great deal of time in court on the plaintiffs side of the judge’s bench.  Yet no one is suggesting that these lawsuits are somehow a waste of time, or “frivolous.”

Our court system is not a country club. It is not available for some and not others. It exists to make sure that ALL of our citizens have a legal venue to settle their grievances, be they rich or poor, black or white, liberal or conservative. And yes, there are lawsuits that are ridiculous, but what do the tort reformers propose? Only allowing lawsuits that involve millions of dollars? Warring CEO’s fighting over billion dollar percentage points in a merger are okay but someone breaking their leg on an unmarked wet floor is not?

Justice is blind, not wearing an Yves St. Lauren pantsuit and checking her stock portfolio. Our laws apply equally to everyone. Try to remember that before you sign a petition or vote for a ballot initiative that keeps you from getting your day in court.

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Personal Injury Tort - Is It Broken?

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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Personal Injury - Greedy Trial Lawyers

 

Million Dollar Pants and Coffee: Two Common and Misguiding Tort Reform Examples

There is a popular misunderstanding about how our court system works.

Many people are laboring under the idea that anyone can, at any time, walk into a courthouse, sue somebody, and walk out with millions of dollars.  Any injury or slight, real or imagined, is a golden ticket that will lead to a huge payday, and all you have to do is go to court and sue.

Did you get into a fender bender? Jackpot.

Did you stub your toe on a curb when you were talking on the cell phone? Free money!

Did a waiter accidentally spill ice water on to your lap? Goodbye mortgage!

Of course, it doesn’t work like that at all, but this is the myth that tort reform organizations like to present to the general public. What they want you to believe is that every personal injury lawsuit is a bad lawsuit, all the damages are overblown, and that “greedy trial lawyers” are soaking innocent citizens, hardworking doctors and blameless businesses everywhere.

There are, of course, some lawsuits that are overblown and ridiculous which manage to actually get to the courtroom. The case about the $54 million pair of pants springs to mind.

 

In 2007, a Washington, D.C. administrative judge by the name of Roy Pearson filed a lawsuit against a dry cleaning service that misplaced a pair of his pants. The lawsuit was for the staggering sum of $67 million, which Judge Pearson later graciously lowered to $54 million.

The case became a cause célèbre among tort reform organizations, offering it up as a perfect example as to why our court system was, as they put it, broken. Believe it or not, as ridiculous as that lawsuit was, we view it as a perfect example as to how our system works.

Of course there are frivolous lawsuits. They are filed every day. But bear in mind that the great majority of these lawsuits are rarely represented by legitimate attorneys, and they are very rarely even allowed to proceed. Many of them are filed by people who are mentally disturbed, and many of them are filed by people who have only the faintest idea as to how the system works. The only reason Judge Pearson’s case was allowed to actually see the light of day and get to a courtroom was because he was, after all, an administrative judge. He knew the rules, he knew how to frame his argument so that his request for such an insane amount of money seemed justifiable in a strictly legal sense, and he knew how to fill out the right paperwork.

But just because he knew how to follow the rules didn’t make his case anymore valid, and when he actually got his case in front of a judge, not only did he lose, but the judge ordered him to pay the legal bills of the dry cleaner that he sued. Again, since he knew the rules, he filed for an appeal, but again, since the case was ridiculous and overblown, the appeal was denied.

The only way that the tort reform argument that the “system is broken” would be proven true is if Judge Pearson had actually won. He did not. And since the judge that heard the original case ruled that the defendants legal bills must be paid for, the family that owned the dry cleaning service will be reimbursed for the amount of money that they had to pay their lawyers. And on top of that, Judge Pearson was released from his position. If that isn’t a sign that the system works, it’s hard to say what would.

Predictably, tort reform groups jumped on this case and milked it for all the publicity they could get. Rare cases like these are, after all, the reason that these organizations get up in the morning. By stoking public outrage (which in Roy Pearson’s case was completely justifiable,) groups like the ATRA hope to gain support for their ideas, which almost always involve restrictions to the access of everyday people to our court system, or artificial limits to the amount of damages that they can receive, whether those damages could be considered reasonable or not.

Tort reform groups don’t just limit themselves to the cases that are overblown. They also underemphasize the damages received by real victims and distort the reasoning behind their lawsuits.

Probably one of the most pilloried legal cases in the past twenty years was the case of Stella Leibeck, who sued McDonalds over what people perceived to be the spilling of a mere cup of coffee, but in actuality was a lawsuit over third degree burns, a week’s stay in the hospital, skin grafts, and the refusal of McDonalds to even help with the medical bills. But as far as the tort reform groups are concerned, this was the story of a woman who simply spilled a little coffee and got millions of dollars for it.

If you take the tort reform people at their word, it almost makes sense. People spill coffee on themselves all the time and are none the worse for it. Some of you reading this might have spilled coffee on yourselves today, yet nobody is presenting you with checks for millions.

But the facts of the case don’t bear out this narrative. For one thing, McDonalds made it a practice to heat their coffee about twenty degrees hotter than anyone else. The water was hotter, and the hotplates that kept the pots heated were more powerful. If you think twenty degrees in temperature doesn’t matter, try dipping a toe in the bathtub when it is filled with eighty degree water, and then try it with one hundred degree water. You’ll notice the difference.

It should also be mentioned that the McDonald’s Corporation knew perfectly well that their coffee was too hot. There had been hundreds of cases of people being scalded by hot coffee that were in fact settled financially by McDonald’s prior to Ms. Leibeck.

Ms. Leibeck’s did not simply stain her sweatpants with spilled coffee. She dumped 8 ounces of 185 degree liquid directly into her lap, which was hot enough to cause third degree burns. The coffee from your coffee maker at home isn’t nearly that hot. Nor is the coffee at Starbucks, or 7-11, or Dunkin Donuts, or Caribou Coffee.

What is important to note is that Ms. Leibeck did not immediately file suit against McDonald’s. She simply asked them to pay for the medical bills, which were quite substantive considering that she had to endure skin grafts and stay in the hospital for a week. McDonald’s refused to even consider helping her. It was only after being faced with tens of thousands of dollars worth of medical bills that Ms. Leibeck contacted an attorney.

After hearing the facts of the case, as well as hearing that McDonald’s knew full well that their coffee was too hot, the jury sided with Ms. Leibeck. This decision was not left in the hands of some broken and unfair “system,” but rather by twelve people picked at random from the populace. In other words, people like you or me.

She didn’t even get that supposed “million dollars” that the “million dollar coffee case” was supposed to be about. An appellate judge reduced the punitive damages to $480,000. And bear in mind that the punitive damages in this case, or in fact any other case, do not exist to simply make people rich. If you could have asked Ms. Leibeck, she probably would have rather not have been burned at all. But the point of punitive damages is to penalize a corporation in the only way that matters to them, which is in their pocketbooks.

Remember, there had been hundreds of incidents of coffee scaldings at McDonald’s, and they had simply settled them. They did some arithmetic and decided that it would be cheaper to just cut a check and have people sign a waiver rather than get new hotplates and lower the temperature of their coffee. Hitting them with punitive damages was simply a legal way of letting McDonald’s know that that practice was not going to be acceptable anymore. And it worked. McDonald’s coffee isn’t brewed and heated at 180 degrees anymore, and scaldings are rare, if not nonexistent. And it cost McDonald’s less than one days worth of profit from coffee.

Is that “frivolous?” Is that an “outrage?” Is that “ridiculous?” Or is it a citizen using our court system to both address her personal damages and to help rectify a situation that was dangerous to others? But the tort reform organizations don’t mention that. They say “What about that crazy judge, huh? That’s almost as bad as the woman with the million dollar coffee. You know what we need? Damage caps. Damage caps and restrictions on lawsuits. That should fix everything.”

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Medical Malpractice Caps on Damages

Is A Monetary Cap In Medical Malpractice Fair?

It’s impossible to put a price tag on a crippling emotional loss. If someone walked up to you and offered you a sum of money in exchange for your infant son’s life, how much would be enough?

That’s an impossible question. The idea of putting a price tag on the life of a loved one is simply ridiculous.

But that didn’t stop Texas from doing so. Thanks to a ballot initiative that was voted into law back in 2003, the life of an infant is worth no more than $250,000. If a doctor prescribes a drug that puts a loved one in a coma, again, that’s worth no more than $250,000. If your wife dies on the operating table due to a preventable surgical error, that’s only worth $250,000.

$250,000 is the monetary cap that was placed on non-economic damages in medical malpractice verdicts. What that means is that the only thing you can be made whole for in Texas is something that would cost you money in the long run. For instance, if you make your living as a pilot and a surgeon makes a mistake that costs you your sight, you would be justified in suing the doctor for all the lost income that you would have made during the remainder of your career. But the emotional scarring and pain that you would have to go through in order to adjust to life without sight is, according to Texas law, only $250,000.

 

The example of the dead infant isn’t mere conjecture on our part. According to an investigative piece by Paul Adrian that was broadcast on a Fox TV affiliate in Dallas, a family from that area made the decision to take their infant son off of life support. The infant’s parents were convinced that a preventable medical error had been made which placed their child in that position, but due to the non-economic caps, the cost of bringing the case to court would have cost more than the damages they would have received. As awful as this sounds, it turns out that the only way that damages in a malpractice trial involving a dead baby can be taken seriously in Texas is if the baby was making money. The life altering pain of the parents counts for nothing.

What was the situation like in Texas where such absurd and draconian measures were actually voted into law by its own citizens? Were people whose injuries involved nothing more than stitches walking out of courtrooms with million dollar verdicts? Was the Texas judicial system nothing more than a free ATM machine for unethical people and their equally unethical attorneys? Was there an exodus of doctors from Texas, leaving the injured and sick to fend for themselves? Were the insurance companies bleeding money so badly over lawsuits that they had no choice but to raise their rates to astronomical proportions?

The answer depends on who you ask. If you ask insurance companies and their public relations teams, the answer is yes. If you ask a bipartisan group of college professors, the answer is no.

The piece on the Fox affiliate cites a study that provides 14 years worth of Texas malpractice data, including claims and payouts, through both settlements and verdicts. In this study,

“…The data present a picture of stability in most respects and moderate change in others. We do not find evidence in claim outcomes of the medical malpractice insurance crisis that produced headlines over the last several years and led to legal reform in Texas and other states. At least in Texas, the rapid rise in insurance premiums that sparked the crisis may reflect, in significant part, insurance market dynamics rather than changes in claim outcomes.Controlling for population growth, the number of large paid claims (over $25,000 in real 1988 dollars) was roughly constant from 1990-2002. The number of smaller paid claims declined. Controlling for inflation, payout per large paid claim increased over 1988-2002 by an estimated 0.1% (insignificant) - 0.5% (marginally significant) per year, depending on the

dataset we use to define "medical malpractice" claims. Jury awards increased by an estimated

2.5% (insignificant) - 3.6% (barely significant) per year, depending on the dataset, but actual

post-verdict payouts in tried cases showed little or no time trend. Real defense costs per large

paid claim rose by 4.2-4.5% per year. Real total cost per large paid claim, including defense

costs, rose by 0.8-1.2% per year.”

In other words, according to the actual numbers, there wasn’t much to panic about in terms of medical malpractice lawsuits.

So why were groups like Texans for Lawsuit Reform claiming that the sky was falling? If there was no big leap in judgments or payouts or even malpractice claims, then why were the premium rates going through the roof?

According to Paul Adrian, the answer might be, ironically, tort reform.

In 1995, Governor George W. Bush enacted what were called “Tort Reform Rate Reductions,” which forced medical malpractice insurers to lower their rates over a period of five years. How significant were the overall rate reductions?

·         1996: $435.5 million in rate reductions

·         1997: $441.2 million in rate reductions

·         1998: $656.4 million in rate reductions

·         1999: $699.5 million in rate reductions

·         2000: $685.5 million in rate reductions

So between 1996 and 2000, the state of Texas enacted regulations that cost medical malpractice insurers a little under THREE BILLION DOLLARS in premiums. Once the five year period was up and the mandatory rate reductions were over, insurance companies were quite eager to make up their losses. Hence the skyrocketing rates.

Insurance companies needed both a fall guy and justification for the spike in premiums, and they found them in trial lawyers. They also needed any sort of legislative leg up that they could get in order to maximize their profits. Since the insurance companies weren’t comfortable with going through the very legislature that made them lower their rates in the first place, they did an end run around them and, with the help of tort reform organizations that they financed and PR firms that they hired, they managed to get Proposition 12 on the ballot. It was voted in to law in November of 2003, and as a result a case involving a dead baby can’t even get to court.

Tort reform organizations all over Texas and all over America are touting the results of these economic caps as the reason that Texas malpractice insurers were able to offer even lower rates to their doctors, as shown in an article in The Austin Business Journal:

“In recent months, the state's top medical malpractice insurance companies have trumped rate cuts. They're crediting the lower rates to Proposition 12, a constitutional amendment approved by Texas voters in September 2003. That amendment cemented the Legislature's decision that year to cap noneconomic medical malpractice damages at $250,000.”

The article also mentions that the Texas Medical Liability Trust will reduce its rates by 5%, while Americans Physician Insurance Exchange is cutting theirs by 13%. And why wouldn’t they? By all accounts insurers in Texas have been making money hand over fist. And the $250,000 cap on non-economic damages is a miniscule proportion of that money.

Remember that after the “Tort Reform Rate Reductions” in the late 90s, insurers raised their rates to astronomical levels, and although they lowered them a bit after Proposition 12 was voted into law, the rates were still incredibly high. We refer again to the remarkable piece by Paul Adrian:

“Insurance premiums did drop for Texas doctors. According to TDI, the state’s largest insurer of doctors, The Texas Medical Liability Trust, dropped its rates 31% between 2004 and 2008, but that's after the rates had jumped up 148 percent between 1999 and 2003.  Insurance rates have come down, but not by nearly as much as they had previously increased.”

For a real world analogy, the Texas Medical Liability Trust bragging about dropping its rates 31% is the equivalent of an 800 pound man losing about forty pounds and then putting out a press release proclaiming that he is “thin.”

To summarize, “Tort Reform Initiatives” cost insurers in Texas billions of dollars, so they spiked the rates and blamed the lawyers in order to recoup what they lost. After securing legal limitations to the rights of Texans, they lowered the rates just enough to appear magnanimous, but not really enough to bring them down to normal levels. They then made it seem that the reason that they could finally “afford” to bring the rates down was not because of the windfall profits that they have made over the past six years, but because of a ballot initiative that states that unless a Texan makes money, then that Texan isn’t worth anything.

It should be mentioned here that the term “emotional pain” does not exist to simply make people rich. It is rather an acknowledgement that incompetence and preventable mistakes can cause crippling emotional hardship. If you think that’s an exaggeration, try to imagine how Paul Pinsukanjana felt when he ordered his infant son taken off life support. Try to imagine how he felt when he discovered that, thanks to the laws of his own state, lawyers can’t even afford to accept his case. Try to imagine how he feels, living with the knowledge that there might be a doctor or nurse still at work at that same hospital who was directly responsible for his son’s death. Try to imagine how he feels, knowing that that same doctor or nurse can continue to practice, with no fear of any adverse consequences if another mistake is made.

As we said, it’s impossible to put a price tag on that kind of pain, but we think that $250,000 feels pretty cheap.

 

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Obama on Tort Reform

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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Tort Reform - What Is It?

Tort Reform I

Before we can understand tort reform, we must first understand what tort law is. Tort law seeks out those responsible for harm to others, usually on the basis of fault. Tort law, or personal injury law, requires those who are responsible to compensate, usually with money. Medical bills, lost time from work, diminished ability to perform every day chores, and the incapacity to enjoy recreational or daily life all are considered for compensation. It is especially difficult to put a price tag on a wrongful death case, as no amount of money can ever make the family completely whole again.

Typically American courts expect a jury to ascertain the damages in a tort case. Juries are comprised of ordinary citizens who are expected to fairly determine fault, and to place a monetary value on the compensation to the tort victim. Juries can arrive at different verdicts when hearing a similar case under the same circumstances. Just as we all do, jurors often bring their own biases that may hurt or help your case. This unpredictability can bring a wide range of results to your tort case.

One of the main determinations a good plaintiff’s attorney will make is choosing a good venue. Some plaintiff friendly venues include West Virginia, Cook County, Illinois, South Florida, and Atlantic County, New Jersey. Sometimes juries award high monetary awards in punitive damages. Punitive damages are different than compensatory damages. Punitive damages are designed, as the name implies, to punish the offender. Remember the famous “pants case’ where an administrative law judge sued his dry cleaners for $54 million for misplacing his pants? He cited the District of Columbia’s consumer protection law to justify his outrageous demand. This case went on for two years and took a two-day trial before it was rightly dismissed. Ah, the Tort system at work.

Back to punitive. Punitive means to punish. The purpose of punitive damages is two fold: to deter wrongful conduct by others (usually manufacturers) and to serve as a normative function of expressing shock or outrage at the defendant’s actions. Punitive damages are to punish an offender for intentional or malicious conduct and to deter similar future conduct. While punitive damage awards are infrequent, their frequency and size have grown in recent years, hence the tort reform political debate. They are routinely asked for in civil lawsuits presently. The difficulty of predicting whether punitive damages will be awarded by a jury at trial, and the current trend toward large amounts when they are awarded, have also contributed to inconsistent outcomes in similar cases.

To defend tort litigation, the costs can get expensive quickly. Organizations advocating tort reform, such as American Tort Reform Association (ATRA), claim that such costs cause all of us to pay more in indirect costs, such as higher health insurance premiums, and a higher price of goods. Tort reform has been hotly debated in Congress, the national media, and in academia, with advocates claiming we are in a tort crisis disagreeing with those who think tort crisis is a myth. According to Tillinghast-Towers Perrin, 2003, the expenditures on the tort system are substantial, about $250 billion a year, and some estimates suggest that indirect costs through “defensive medicine” and other responses to the threat of lawsuits are even more costly.

So, what is tort reform? It’s a group of ideas and proposed and some enacted (Caps on awards for instance) laws designed to changed the way our civil law works. Tort reform laws are designed to limit the circumstances in which the injured party may sue, and how much money to award to cases. If you think that tort reform will help, just look at New Zealand. In 1972 New Zealand introduced the first universal no-fault scheme for all accident victims. This is based on the principle that anyone suffering personal injury, regardless of whether they can point to a negligent party who caused their loss, may receive state benefits from the government run Accident Compensation Corporation. The goal is to achieve full equality in compensation, while reducing costs by removing the process from courts where litigation is hugely expensive. In the 1970s Australia and the United Kingdom drew up similar proposals for similar no-fault schemes. But the efforts and recommendations amounted to little, and with changes of government the reform agenda were abandoned.

Next Tort reform article: The specific ways of applying tort limitations. Stay tuned.

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Medical Malpractice Law Suits

In the last few days, Republican politicians have once again been arguing for reform and regulation of lawsuits. During this same period, the national news wire agencies have seen several articles detailing with medical horror stories:

Man dies of heart attack after waiting three hours in hospital waiting room complaining of chest pains

Rhode Island Hospital operates on wrong side of patient’s brain for third time THIS YEAR 

Remember that these stories are more common than one might think. The medical profession is not sufficiently regulated. Remember egregious mistakes like these the next time politicians begin waxing poetic about the tort reform.

In better news, trial lawyers are actually making legislative headway protecting the rights of the injured and unprotected. The article, however, makes it a point to mention how much money trial lawyers donate to the Democratic party and its candidates. It does not, however, mention how much money insurance companies donate to Republicans.

To learn more about medical malpractice issues, please visit medical malpractice law.  To learn more about our medical malpractice lawyer, please click on medical malpractice lawyer maryland, and read about John Sellinger.

Medical Malpractice Insurance Premiums

As the 2008 election cycle nears, the American public will undoubtedly begin hearing about the legal boogeyman – frivolous medical malpractice lawsuits. Texas Republicans famously (and deceitfully) distributed a press release in 2002 that claimed that 86% of all medical malpractice claims were frivolous. President Bush has declared the need for tort reform regarding medical malpractice claims in his State of the Union address. There is no reason to believe that in the current political climate, candidates will not again try to score points with voters by trumpeting reforms of the tort system. But, should voters listen to that tired old song?

The argument goes that frivolous lawsuits are increasing medical malpractice insurance premiums, which in turn makes the practice of medicine prohibitively high. This argument has two main parts: (1) that there are a lot of frivolous lawsuits; (2) increased pay-outs for claims (by settlement or court judgment) increase insurance premiums. Research has shown that both of these claims are false.

First, most claims are not frivolous. Hospitals self-report injuries that occur due to doctor malpractice. There is an extreme difference between the number of cases reported by hospitals and the number of claims actually filed (an estimated 1,000,000 injuries per year versus 85,000 lawsuits). This statistical gap leads to two conclusions. Most injured patients do not pursue a claim against the responsible doctor(s). Also, the system filters claims – preventing the frivolous from coming to court.

No doubt the greatest signal barrier to reducing the number of frivolous claims is the plaintiffs’ lawyer. Because plaintiffs’ lawyers frequently work under a contingency fee arrangement, there is a strong economic incentive to pursue only those claims that have a high likelihood of recovery and a high potential recovery value. Professor Herbert Kritzer of the University of Wisconsin surveyed plaintiffs’ attorneys in Wisconsin regarding acceptance rates of medical malpractice cases. Professor Kritzer found that 80% of all medical malpractice cases were declined at the initial contact with attorneys. Another study looked at how particular attorneys handled such inquiries. The lawyers’ office received calls from 730 people over 10 randomly selected days. Only 1 in 30 calls resulted in litigation – lawyers rejected 97% of potential plaintiffs. Greenberg & Bederman has accepted only 5% of medical malpractice inquiries in 2007. Additionally, cases that are initially accepted by lawyers are dropped because they turn out to be weak. In short, lawyers must screen potential cases because:

  • the contingency fee economic model requires that lawyers select only those cases that have a high likelihood of succeeding.
  • the costs of pursuing a claim are extremely high – court costs, discovery costs, expert fees, etc.
  • medical malpractice claims take longer to resolve than other types of civil cases.

  • provider-defendants win at least 73% of all cases taken to trial

These facts create an incentive system for lawyers to only select the most meritorious claims.

Second, there has not been an increase in the amount of medical malpractice pay-outs. As stated before, when insurance premiums spike the go-to explanation is an increase in claim pay-outs. A Texas study from 1988 to 2002 found that no sudden changes in the number or amount of pay-outs occurred during the period of dramatic premium spikes in late 1999. A Florida study from 1990 to 2003 found that pay-outs per 100 doctors dropped from 3.98 in 1990 to 3.33 in 2003. These studies (and others) have lead researchers to claim that "factors outside the medical malpractice system were responsible for the premium spikes." One can only speculate then as to what those outside factors might be. Personally, I favor two explanations:

  1. insurance companies are corporate entities and thus seek to maximize profits. Increasing premiums will effectuate this goal. The negative publicity this generates can be safely passed on as the work of legal boogeymen

  2. insurance companies need to compensate for poor corporate investment strategies (sub-prime markets, dot-coms, Enron, etc.)

Either way, doctors should not look to plaintiffs’ lawyers as the cause of premium increases. Instead, the AMA should require insurance providers to explain the need for premium increases based on actual statistics rather than rhetoric. And, voters should ask politicians to find real problems on which to base campaigns.

Citations:

Prof. Herb Kritzer's article is Risks, Reputations, and Rewards: Contingency Fee Legal Practice in the United States (Stanford University Press, 2004).

Suggested Reading:

David A. Hyman and Charles Silver, Medical Malpractice Litigation and Tort Reform: It's the Incentives, Stupid, 59 Vand. L. Rev. 1085 (May 2006).

Jason Fernandez

To learn more about medical malpractice issues, please see medical malpractice.  To learn more about our medical malpractice lawyer, John Sellinger, please click on medical malpractice lawyer maryland, and read his firm bio.