Tort reform is a scam that punishes people to protect profits.
I haven't fact checked any of this, but one blogger points out the possibility that the NAM is illegally funneling money to other tort reform groups. In 2005, the National Association of Manufacturers (NAM) funneled $870k through the American Justice Partnership (AJP) to American Tort Reform, according to the 2005 AJP 990. Another $451k went to pay a "service fee". Total AJP expenditures were only $1.7 milllion. Was AJP set up in 2005 to facilitate NAM's contribution to American Tort Reform? Is NAM legally prohibited from contributing directly to American Tort Reform? The answer could, in part, depend on which American Tort Reform received the $870k, the American Tort Reform Association (ATRA) which is a 501(c)(6) or the American Tort Reform Foundation (ATRAF), a 501(c)(3). This is not the first time that I have suspected NAM of disguising illegal contributions. Last year, I speculated here in the TPM Cafe about whether the 2004 $650k grant made by Grover Norquist's Americans For Tax Reform to the National Alliance for Worker and Employer Rights (NAWER) was funded by NAM. NAM is prohibited from contributing directly to NAWER by law Source: American Justice Partnership, Another NAM Scam | TPMCafe I'll do a little digging and keep my eyesfor more about this story.
The problem with trial lawyers is that they think they have the right to tell business owners how best to run their businesses. With the benefit of 20/20 hindsight, trial lawyers point the finger of blame whenever an unfortunate business makes a prudent, but incorrect decision. Greedy trial lawyers meddle in virtually every industry and drive up the prices of all our products and services. Every business decision made has to take into consideration the predatory litigation lobby, and not what's best for the business. No wonder so many businesses are driven into bankruptcy! The situation is only as bad as it is because activist judges and politicians in the wallet of the trial bar extended tort doctrines to dubious causes of action. It didn't used to be this way. There once was a time when corporations were free to run their businesses as they saw fit, and when entrepreneurs weren't held hostage by trial lawyers. If only we had meaningful tort reform, we could return to a time of fairness and efficiency in commerce. A time perhaps best exemplified by the manner in which White Star Lines handled the tragic loss of the Titanic. Thanks to a common-sense attitude towards compensating the victims, the management of White Star saved the company from ruin. Were an identical tragedy to occur today, the company would surely be devoured by ravenous trial lawyers and greedy family members unwilling to accept reasonable compensation. Let's take a trip back to the good old days and see how White Star Lines handled the crisis: In 2002, new evidence surfaced, revealing that the Titanic’s owners expected, and in fact demanded fees for the return of bodies.White Star was the Enron of its day; a succession of callous acts without end. Through letters that still survive, historians have long known that Ismay’s line notified the widows of the Titanic’s bandsmen (notwithstanding the fact that their husbands did much to prevent panic on the port side by playing cheery ragtime music) that 75% of the money owed them was being withheld, based on the premise that their husbands had entertained passengers only halfway through one leg of what was to have been a two-way trip. Furthermore, White Star judged that it was only fair to warn the widows that there would be little left over from the remaining 25% because they would have to “settle a bill” for the loss of their husbands’ uniforms. In February 2002, documentary film-maker Rip Mackenzie sent a dispatch describing a letter demonstrating once and for all time that there was probably no subterranean marsh into which White Star was unwilling to descend. Written on White Star stationary and dated two weeks after the sinking, the letter was addressed to Sarah Gill of Somerset, England, in reply to her inquiry about the fate of second class passenger John Gill, her childhood sweetheart and husband of two months. The owners of the Titanic demanded of Sarah a fee of 20 pounds ($1400 in year 2002 dollars), or her husband’s body would “regrettably” have to be buried in Halifax. White Star used this letter as an opportunity to stress that the sinking of the Royal Mail Steamer Titanic was no one’s responsibility . . . as if driving a ship full speed ahead into the night, toward an ice field about which the bridge had been repeatedly warned . . as if . . . -------------------------------------------------------------------------------- “The sinking was an unfortunate accident, [for which] we cannot be held responsible. We regret that we do not see our way to bring home the bodies of those recovered free of expense, and in cases where it is desired for this to be done, it can be carried out only if the body was in a fit state to be returned, and upon receiving a deposit of 20 pounds on account of the expenses.” -------------------------------------------------------------------------------- Given the precedent of how White Star treated with widows of Wallace Hartley, Jock Hume, and the other bandsmen (whose families found settlement of the “uniform account” doubly difficult after corporate lawyers declared violinists and cellists “not crew, but officially passengers, therefore not covered under the Workmen’s Compensation Act”), the Sarah Gill discovery should bring no sense of surprise. The behavior of J. Bruce Ismay and his legal team at White Star begins to look increasingly analogous to a car thief who manages to get away with billing his victims for the labor of dismantling their cars and selling the parts. Source: Charles Pellegrino Web Site Remember White Star Lines the next time some corporate sock puppet tells you we need tort reform. If it weren't for "greedy trial lawyers" it's entirely possible that airlines would bill the families of dead captains for the cost of their uniforms.
Ralph Cook wrote a letter to the editor in which he criticizes the propaganda study issued by the Pacific Research Institute: The $865 billion figure PRI advertises contains a long list of costs not at all associated with the civil justice system. For example, the Tillinghast study which PRI calls the "gold standard" and bases much of its study on, says tort costs in the United States are around $279 billion. Business Week, one of the corporate community's most trusted publications, said Tillinghast's total included "everything from payouts for fender-benders to the salaries of insurance CEOs," and is "a wild exaggeration." With Tillinghast's grossly exaggerated total tort costs of $279 billion, PRI's total, largely based on and more than three times Tillinghast's, is even more far-fetched. Source: montgomeryadvertiser.com :: Inflated figure undercuts premise The "reform" movement has a history of relying on made-up data. Regular readers will recall Professor Fink's take on another bogus study.
If you're looking for a great f-bomb laden critique of the Bush administration and its pro-business, anti-consumer policies, Lance Mannion just posted a good one: Don't worry. The market will take care of it. When enough people get sick and know what companies' products made them sick and stop buying from them and when enough stores that carry those products close and enough lawsuits are filed, then all that tainted and spoiled food will just magically vanish from the marketplace. Except the Republican Free Marketeers want to take away your ability to sue. They call it tort reform. It's like Social Security reform. "Reform" is Republican for "screw the poor and the middle class." Nevermind. At least on your sickbed or in your grave you'll have the satisfaction of knowing your suffering saved the rest of us a few pennies per pound on imported produce. Source: Lance Mannion: They poison everything they touch He's right. A great many "reformers" do indeed think the invisible hand of the market will sort everything out and that government regulation will just cost money. It seems all the invisible hand can do these days is flip us a very visible bird.
I haven't noticed attorney Chris Nichols' blog before, but it looks like one I need to pay attention to. He's written an informative article that explains that A: juries never get to know about insurers or insurance policies, and B: that at the recommendation of a former Enron consulting company, insurers are denying more claims than ever... and making billions doing so. As I'm getting ready for a trial, I'm constantly reminded that the "reason the case is going to trial" has more to do with the defendant's insurance company than anything else. It's frustrating as an attorney fighting for justice because I have the burden of proof for the "facts" of the case, but what the jury really needs to hear, I'm not allowed to tell them. Why? Well, the insurance industry has effectively "gagged" anyone from telling the jurors why the case is going to trial. Typically, the reason for that is that the insurance company who pulls the strings on the defendant, WANTS the case to go to trial, because they know that for every case that goes to trial, 99 just give up, and the insurance company gets to pay less than what is "fair and just" as the rules require... Believe it or not, insurance companies have saved Billions of dollars since the mid 1990s, by improperly denying claims, and otherwise forcing litigation by paying far below the jury verdict average to settle claims. Frivolous defenses to legitimate claims have resulted in an increase in litigation, against people insured by these companies. This is part of a deliberate claim handling program implemented by McKinsey & Company, the same consulting firm that set up Enron's business model, at many of the nation's largest insurance companies. See "Record Insurance Profits" Article... McKinsey & Company counted on this when they told Allstate Insurance in the mid 1990's to quit treating people with “Good Hands” and instead treat them with “Boxing Gloves.” When Allstate forced more litigation and posted record profits, the rest of the insurance industry followed their lead. It is now standard operating procedure in the insurance industry to spend multiple times what a reasonable settlement would be to fight the claim, simply to prove to injured people and their lawyers that filing a claim for injuries is more trouble than it is worth. Read a Transcript of Anderson Cooper's Interview with one of Allstate's Victims Source: North Carolina Trial Law Blog: The Truth That Juries Never get to See He's absolutely right about spending multiple times what a claim is worth. They aim to intimidate attorneys into settling cases for less than the cases is really worth, rather than the time-and-money consuming trial process.
The National Association of Manufacturers just yesterday posted about the incredibly flawed study done by the Pacific Research Institute about the supposed costs of the tort system: 
"Out-of-control litigation and a broken legal climate cost Americans the equivalent of almost $10,000 for every family of four, a study by the Pacific Research Institute has determined. Here to describe his findings from "Jackpot Justice: The True Cost of America's Tort System" is the study’s author, Lawrence J. McQuillan, PRI’s Director of Business and Economic Studies. Renee Giachino of The American Justice Partnership adds the AJP's latest news and views on tort reform. America’s aging infrastructure is a major factor in manufacturing’s ability to compete. John Horsley, executive director of the American Association of State Highway and Transportation Officials, highlights a new report that lays out the full scope of the problem." (Emphasis added.) Source: This Week on America's Business It would have been better if NAM had never cited the PRI's study, but it's embarrassing they cited it this late in the game. Note that just one paragraph later they point out a real problem to manufacturers...
I am humbled. I have tried to use sarcasm, satire, and parody to explain exactly why tort "reform" is bad for the public and will lead to a lives being traded for money. I thought I was pretty good at it. Apparently, I'm an amateur. My new heroes at The Yes Men impersonated a Dow Chemical VP and gave a fake speech at a banking conference in London. This excerpt explains why tort "reformers" are so adamant that we must bring "predictability" to the civil justice system. "You may have heard the joke: How many Americans does it take to screw in a lightbulb? 12: one to climb the ladder and 11 to file the lawsuit. What about Indians? Oh, just one! This joke could well be about those cases in which regional differences in law, culture, income, and so on produce radically different risk outcomes. I'd like to illustrate this with a hypothetical use of the AR Calculator™. Suppose Bill wants to set up a factory to produce a new pesticide. He logs on to the AR Calculator™ and plugs in the various chemicals, how much he wants to produce, and so on. The database finds roughly analogous cases, adjusts for geography and changes in law and income, and tells Bill that the risk of setting up in the US might well involve over $2 billion in liability from potential area lawsuits. After comparing that with profit projections, it's very clear that taking this route will make Bill an unhappy camper. But the database proposes alternatives. The harm risk in India, for example, translates into potential losses of less than $400 million, based on previous liability settlements. Meanwhile, profit margins actually increase thanks to cheaper manufacturing, less draconian inspection requirements, etc. It is clear already that the skeletons here will be golden." Source: Acceptable Risk You simply must visit this link, if only to watch the video where the golden skeleton is unveiled, and various bankers pose for pictures with it.
Beth Stover, a woman whose baby died while under the care of Kaiser Permanente in California, sent me a wonderful letter and linked to her story at Kaiser Permanente Thrive Exposed. That site appears to have a wealth of information about Kaiser Permanente and is worth reading. If you only have time to read one post at that site, look at Beth Stover's story and all the roadblocks she's run into trying to get justice. The following excerpt about damage caps is an excellent argument against them. ROADBLOCK Number 3: California’s MICRA and Kaiser’s own version of MICRA (Medical Injury Compensation Reform Act) This is a BIG ROADBLOCK and one that works very well for Kaiser and any other healthcare provider that has adopted the practice of providing negligent care, or should I say “withholding care”. MICRA is a law enacted back in 1975. Yes, 1975! This puts a $250,000 cap on non-economic damages in medical malpractice cases in California. My Baby’s life is not worth enough money in California for a lawyer to be interested. It’s not a good business decision financially for lawyers to take on malpractice cases UNLESS the Baby/patient will need a lifetime of care. This brings us back to the missing fetal heart monitor in my case. Kind of makes us wonder if my Baby was left to die after discovering possible brain damage had already taken place. It is MUCH cheaper to let the Baby die instead of getting stuck with the economic damages that might have applied if Lehna had lived. This should have been my decision, NOT a financial decision made by Kaiser. I would have chosen to let Lehna live. Not only do you have MICRA to go up against in California, but Kaiser saw how well MICRA prevented lawyers from going after them for medical malpractice that they decided to enforce a double whammy and put a $250,000 cap on any future Kaiser Members everywhere, who experienced medical malpractice within Kaiser. MICRA and Kaiser’s $250,000 cap is a LICENSE TO NOT PRACTICE MEDICINE since it prevents Kaiser from being pursued in the all too common event that medical malpractice has taken place. There seems to be no recourse for many Kaiser members and Californians due to the fact that finding a lawyer who will take these cases is next to impossible. ALL Kaiser members, not just in California, need to read the fine print in their agreement with Kaiser. “In the cold calculations of medical malpractice, a brain-damaged baby is worth more than a dead baby. The brain-damaged baby will need a lifetime of specialized care.” “Arbitrary caps on “non-economic” compensation unfairly discriminate against the suffering of women — who typically sustain injuries due to medical negligence, such as laceration of the uterus or loss of a new born during child birth, that do not carry high “economic” price tags but involve significant loss. Injuries sustained by homemakers are also unvalued, because they have no “wage loss.” Caps not only deny women victimized by medical malpractice fair compensation and legal representation for their injuries, but subject women to repeat offenders and have been undeterred.” Source: Kaiser Permanente Thrive Exposed » Happy Birthday Lehna Jordann Brewer Immediately after the italicized quote above is a link to testimony that Jamie Court of the Foundation for Taxpayer and Consumer Rights gave before the U.S. Congress in 2002. It too is a good read, as is just about anything from Jamie Court and the FTCR. Cross-posted to TortDeform
Walter Olson, in an attack against a trial lawyer, inadvertantly disclosed something about tort "reform" that many prefer to keep secret: That tort "reform" shifts costs from corporations and their insurers to the taxpayers. The quote below sums it up: "We didn't say we were suing nobody," Lawrence said. "All we wanted was the insurance company to pay for my son's medical bills. That's all we wanted. "We don't want no $10 million. We're living fine. Whatever the insurance company doesn't pay, Medicaid pays. We don't need a lawsuit. Now, we've got all these people against us and it's not fair because it's not true." (Emphasis added.) Source: Overlawyered: Mom: I never authorized lawyer to sue school over football injury And who pays for Medicaid? You do, I do, and so does every other taxpayer. There is no such thing as a free lunch; regardless of whatever laws are passed in the name of reform, someone will have to pay for the medical bills of injured people. The question is who should pay for those bills. Supporters of the civil justice system believe that those who caused the injuries should pay, or their insurers should. Corporate lobbyists would prefer a system where taxpayers pay the bills for the injuries caused by their employers. And in the spirit of Orwell, they push for such a system by claiming there's a "tort tax" that affects consumers. When Medicaid, Medicare, or another governmental program pays for an injured person's medical bills, it costs the taxpayers. When private health insurers pay the bills, it costs the members of that health plan in the form of higher premiums. And if no one can afford to pay the bills, then medical providers raise the prices everyone else pays; that's why it's $10 bucks for an aspirin at a hospital. Each successive "reform" that makes it more difficult to bring a lawsuit makes it more likely that taxpayers will end up buying a "free lunch" for the corporation who caused the injuries in the first place. Why should taxpayers be forced to pay for the damages caused by a corporation's negligence? Cross-posted to TortDeform
State passes tort "reform" measures to lowe malpractice premiums for doctors. Largest medical malpractice insurer posts record profits and gives raises to its executives. Doctors don't see rate reduction. Today it's happening in Illinois, but that's neither the first nor last state where insurers put the screws to the doctors: The state's biggest malpractice insurer has posted its biggest profit since the 1980s, increasing pressure on the company to cut rates that have surged in the past five years. Doctors who lobbied alongside ISMIE Mutual Insurance Co. two years ago to persuade Illinois lawmakers to limit jury payouts for malpractice victims are still awaiting a break from lofty premiums. ISMIE's $50-million profit and CEO Alexander Lerner's $1-million pay in 2006 puts the rate issue back in the spotlight. "They're making a lot more money now, and we still haven't seen our rates go down," says Ellen Brull, a partner at a family practice in Niles who has seen her base insurance rate almost double since 2003 to $19,373 last year. "I would expect major reductions." Source: Chicago Business News, Analysis & Articles | Doctors' insurer sees profit soar | Crain's (Free subscription required.) If we're passing "reform" measures to get lower insurance premiums, why on Earth don't we require insurers to lower their premiums at the same time?
Saw a sarcastic post that invoked the Monty Python Holy Grail rabbit sketch regarding a fisherman in Iraq who was shot for brandishing a fish towards a helicopter. The post also notes that the Army is compensating the families of innocent civilians with generous sums like $500.00 for the death of a child. I wonder if the ATRA had a hand in the compensation scheme? Source: Yave Begnet: fostering goodwill
"In another incident, in 2005, an American soldier in a dangerous Sunni Arab area south of Baghdad killed a boy after mistaking his book bag for a bomb satchel. The Army paid the boy’s uncle $500. "
Warning - the post above drops at least one F-bomb, although it seems like an appropriate usage to me.
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