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Lawsuit Abuse

December 18, 2011

2. Law

Lawsuit Abuse

I sat in court the other day.  I had completed my rounds in the courthouse – met with my old judge from Wyoming County (now retired and filling in for an untimely departure on the local bench), the active judge’s secretary, the prothonotary, et al. – and wanted to watch local counsel.  It’s a habit I adopted from, oddly enough, my old judge.  When I started practicing in 1993, I made an appointment to introduce myself.  His advice at that time: “Come to court merely to watch other counsel.  Learn their styles and how they structure arguments.  It might improve how you present, but will improve how you do battle against them.”  Sitting in court like that, to me, is an investment.  I make time every week.

The proceeding seemed to be a Motion to Reconsider Verdict.  Was probably a bench trial.  It was a MedMal case.  The plaintiff had a kidney transplant – her second – and her body rejected it just as it had the first transplant.  Defense apparently won at trial – their arrogance oozed.  On the issue of what post-op meds she was taking, counsel walked a several-page doc to the judge.  “I’m going to reference these pages, your honor, collected from several documents as I speak.”  He began to speak.  Plaintiff’s counsel asked for a copy so he could follow.  “It’s from your Trial Memorandum,” defense counsel said with contempt.  “Don’t you have your own Trial Memorandum?”  Plaintiff’s counsel went silent, and defense counsel continued.  I would have called his mother a whore and demanded a copy of the document from which he was both reading and was in the hands of the judge.  When counsel was done bloviating, plaintiff’s counsel stood.  He was clearly weakened.  After several minutes he seemed to forget the beating he perceived he just took and found his rhythm.

Was this case an example of lawsuit abuse?  I don’t know enough to feel either way.  But what I did observe is this:  The woman’s body rejected a kidney and someone was going to pay.  Setting aside her case, the concept of chasing dollars every time something goes wrong is the very heart of lawsuit abuse.  The other flavor is this:  Seek out perceived liability and sue.  Got a restaurant where the bathroom mirror doesn’t comply with ADA?  That’s a lawsuit.  But make sure that you at least entered the restaurant (better yet, the bathroom) before you sue.  In a better society, the owners would have been asked to tilt the mirror, and if they ignored the request then they would have been told by the appropriate government official. But, no, some POS smells money so the first word to the restaurant is via a lawsuit.  BTW, I’m not sure how to make POS plural – because the burden falls equally on plaintiff and counsel.

I’ve done civil litigation, and will again.  But those cases will be few.  I don’t enjoy chasing standards of care or finding negligence-proving duties.  Don’t get me wrong – there are bad actors that cause harm.  Those actors should be compelled to make their wake right through dollars on the table.  Harmed people should be made whole as much as possible.  Sometimes punitive damages can be the only way to force change and stop a repetitive harm from continuing.  With many putative defendants, only plaintiff’s counsel can force these changes through society.  I get all of it, and I respect the role attorneys play in the process.  But for the contingent-fee system, many wrongs would never get addressed.  High five, chest bump, knuckles, blah, blah, blah.

But then the drip, drip, drip of money hits.  A weak case is filed perhaps because the statute of limitations is careening around the corner at warp speed.  The defendant’s insurance company settles for $5,000 because it’s cheaper than to argue.  In that restaurant case above, the plaintiff sued several restaurants over the same issue … couple grand here, couple grand there, and next thing you know you’re making a living.

Society has responded.  Lawyers get smacked upside the head when they file frivolous lawsuits.  Some states have provisions that the loser pay counsel fees for both sides.  Under some circumstances, insurance companies can be made to pay triple the actual damages.  These provisions try to correct the course of ever-increasing lawsuits:  Make sure you settle clear examples of wrong, and don’t file unless you have a solid case.

“But, ah,” thinks the learned reader, “I can’t get enough information from the hospital or insurer to completely evaluate a case unless I file a lawsuit.”  True that.  Subpoenas duces tecum and Requests for Production of Documents are wonderful things.  It’s like sending a card to a faraway friend with a message inside:  “I’m lonely.  Send me a present.”

That requirement to compel disclosure, however, is not the natural state of the beast – it is a sign of its sickness.

We’re not going to get anywhere if we argue the process.  Let’s step back a moment:

The cost of America’s lawsuit-happy culture totals $261 billion a year, or $880 per person, according to seminal research by Tillinghast-Towers Perrin (2006). According to a 2007 study commissioned by the Institute for Legal Reform, small businesses alone pay $98 billion a year to cover the cost of America’s tort system — money that could be used to hire additional workers, expand productivity, and improve employee benefits.

Here’s your visual:  According to the data above, every person in America puts $880 into a pot.  Those of us that have been “harmed” also get to take out of the pot – after those of us that are attorneys take one-third.  No wonder the definition of “harm” expands on a daily basis and that attorneys file civil suits.

The $98 billion asserted expense to small businesses exceeds the GDP of Morocco.  And the asserted overall expense of $261 billion exceeds the GDP of Finland, Portugal, and Hong Kong.  Yeah, yeah, yeah, everything is relative.  We’re a $14 trillion economy, so the total cost is just under 2% of our GDP.  Wait, what?  Two percent?  Two cents out of every dollar generated from every good and service produced by the United States goes into the pot?  And plaintiffs’ attorneys scrape out 30%+ from that?  Ayep.  No wonder the allure is there.

Is there a fix?  Define the problem:  There’s so much money on the table that plaintiffs and attorneys are motivated to file weak lawsuits (which they often refer to as “innovative”); and there’s so much risk  on the table that defendants and insurance companies reflexively fight claims – to the point where, as with doctors, they change their mode of performing their duties (“defensive medicine”).  Everyone on both sides has become conditioned for battle rather than claims resolution.

The first step in the fix is to increase the cost of playing poker:  Loser pays all attorney fees.  Make it a country-wide rule.  It will require plaintiff’s counsel to push forward only strong suits, and defendants to settle that which should be settled.  It’s easy enough to allow a post-verdict motion on good-faith litigation – just use a higher standard like clear and convincing evidence.

Will this reduce litigation?  Yes, and it will ensure that those cases that do go forward are well-grounded in what the courts do best – settle bona fide disputes.  The key is to erase the present system which can be nothing more than rolling the dice with the jury … let’s see how high a number we can roll!  Double sixes, c’mon baby!

Will this rule go nationwide?  The biggest prostitutes of all – politicians – won’t make it happen.  Their drug is money, and the trial lawyers are spiking it into their veins.  If it does gain more ground, it’ll be state by state (which it should be – 10th Amendment) and strong or weak depending upon the whoreishness of the political party in power, which will change over the years.

The next step is to change the standard of proof.  Right now, it is generally a “preponderance of the evidence.”  That can be termed “more likely than not.”  A 50/50 shot at winning hundreds of thousands of dollars?  Way better than the lottery.  Make plaintiffs prove their case by clear and convincing evidence.

Third, in class-action lawsuits the one-third contingency fee needs to stripped away.  I cringe at those pathetic commercials trolling for plaintiffs because a medicine was found to cause harm after testing that is so extensive it is crippling our R&D investment.  Attorneys should get a fee based on time – then double it if you want – but getting thousands of plaintiffs together, each of whom get a coupon for $10 off their next purchase while the attorneys get multi-millions is stupid.

The bottom line is that our system has created a monster.  We need to fundamentally change the beast.

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About Clyde

Clyde is the lead attorney in the firm. Licensed to practice in 1993, he's also taught Constitutional and Criminal Law for several years at a private university, primarily at the Master's level.

View all posts by Clyde

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