Behind all the lawyer jokes that have swept the country in recent years is a public cynicism and even alarm about growing numbers of lawsuits, about outrageous damage awards and about a tort system that seems out of control.
Those concerns are real. Millions of lawsuits are filed each year in state and federal courts, making America the most litigious society on Earth. The United States has far more lawyers per 100,000 people than any nation in the world. The cost to the economy is an estimated $80 billion in direct legal expenses and insurance, plus a staggering burden on business and industry.Legal costs are so high that just the threat of a lawsuit and a protracted court battle sometimes can compel a settlement from an individual or organization even though the case has no merit. Defending oneself in court and winning still can leave the winner with a hefty legal bill.
But there may be hope in Congress. A Common Sense Legal Reforms Act - part of the Republican Contract With America - has been introduced by Rep. Henry Hyde, R-Ill., chairman of the House Judiciary Committee. The measure seeks to address some of the worst problems. Of course, the measure would affect only civil actions in federal courts, but it is a place to start and could be a model for similar state actions. Similar measures are before the Senate.
Among the proposed changes in the federal system are:
- A loser pays rule. The loser in a lawsuit picks up some of the winner's attorney fees. This would discourage some flimsy lawsuits and would encourage parties to settle outside of court.
- Product liability reform. This would tighten the standard for evidence to show that an injury from a supposed faulty product was due to malicious conduct.
- Punitive damage limits. Compensatory damages for lost wages, doctor bills and other expenses and losses are understandable and seem only fair. The assessing of punitive damages to "teach a lesson" or "send a message" often looks more like simply a way to reap instant wealth from a rich defendant. The Hyde bill would limit punitive damages to three times the amount of compensatory damages or $250,000, whichever was greater.
The Hyde measure also would limit pain-and-suffering damages in multi-defendant suits to each defendant's share of fault. The current practice allows the richest defendant to be plundered for what the others can't pay. Hyde's bill also would ban contingency fees paid to trial-trotting "expert" witnesses.
These and other changes are long overdue. They may not make an overnight difference in the nation's mangled tort system, especially since they would apply only at the federal level, but they are a good beginning. When Congress is finished, states should go and do likewise.