This article, authored by and reprinted with the permission of Attorney Russell F. Moran (Publisher of the New York Jury Verdict Reporter), originally appeared in the New York Times on January 16, 1995.
The Common Sense Legal Reform bill, soon to be considered by Congress, is the magnum opus of the tort reform movement. This item in the "Contract With America" would make major changes in Federal civil litigation, especially concerning product liability suits and punitive damages, all in response to a perceived groundswell of dubious lawsuits.
But there is a problem: It's too late.
The tort reform movement has already been heard, loud and clear, by its target audience: the jury. Jurors have listened attentively to the argument that American business, staggering under the burden of giant verdicts, is losing its competitiveness. If you are a doctor or a homeowner, the reformers have argued for years, insurance premiums will keep skyrocketing because greedy trial lawyers and their clients are out to get you.
Well, the jury is in, and the verdict is for the defendant--and his insurance company. Civil juries are finding for the defendant as never before. In New York (where litigation is so intense it could use a musical score) there is a clear pattern, and it is most dramatic in product liability lawsuits. From 1981 to 1987, 51 percent of the verdicts in these cases were in favor of the defendant. In the next seven-year period, 1988 to 1994, that rate rose to 62 percent. The trend is mirrored nationally, and it flies in the face of the conventional wisdom that product liability verdicts are strangling American industry.
The trend is also clear in the number of cases filed. From 1985 to 1991, the number of product liability cases (excluding asbestos claims) in the Federal courts decreased by 40 percent. Not only are product liability verdicts going for defendants, but defendants' odds of winning are improving in negligence cases in general, including ordinary motor-vehicle and slip-and-fall lawsuits. In New York, defendants are now winning 44 percent, compared to 41 percent seven years ago.
And how goes the medical malpractice "crisis"? Here, too, New York juries have been tilting toward the defendant. Verdicts for physicians in malpractice cases increased from 60 percent in 1981-87 to 63 percent in 1988-94. A recent national study showed that doctors win 71 percent of the time--this despite a Harvard Medical School finding that in one recent year in New York State alone, 23,000 to 31,000 patients suffered injuries while hospitalized, leading to as many as 7000 deaths. (These are medical, not legal, statistics.)
Contrary to the rantings of the American Medical Association, only about 2 percent of people injured by a physician's negligence ever file suit, according to The New England Journal of Medicine. And those who do sue hardly clog the courts. Only 9.8 percent of medical malpractice cases go to trial, and only 5 percent go all the way to verdict.
While doctors are understandably upset over huge malpractice premiums, they should turn their ire toward the folks who collect them. According to the National Association of Insurance Commissioners, medical malpractice insurance is the most profitable line of business.
There is strong evidence that there never was a problem to begin with. A General Accounting Office study questioning the existence of a "litigation explosion" noted that only 10 percent of the seven million cases filed in state courts across the country are tort cases of any kind. This is not surprising in light of a Rand Corporation study that of all accident victims, only 7 percent receive compensation through the court system.
Just as the health care debate led to massive adjustments in the health system, so has the legal reform debate resulted in a new industry of arbitration and mediation known as alternative dispute resolution. An entire shadow justice system is sprouting before our eyes. Reform is here! But the reformers still clamor for more.
The tort system has grown with the accumulated wisdom of centuries of common law. Just as the criminal justice system is society's way of expressing disapproval of certain behavior, the civil justice system is society's way of righting a wrong by compensating the victim. To the extent that we tamper with the right to a day in court, we risk leaving the victim with nothing but anger and feelings of revenge, emotions that our society already has in superabundance.
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