Responding to the Assault (Continued from page 10)
nearly $26 billion dollars. In all, over 20 of the top 200 Fortune 500 companies are either insurance com- pany or health care related companies. These include Columbia/HCA Health Care at 69th with revenues in excess of 19 billion, United Health Care at 84th with revenues in excess of $17 billion, Cardinal Health at 93rd with revenues of nearly $16 billion dollars and Humana at 165th with revenues in excess of $9 billion dollars. Again, the arguments by these industries that they are being snuffed out by litiga- tion are simply not supported by the facts.
Litigation Facts Small businesses have also gotten into
the act. In a recent article by Jack Faris, President of the National Federation of In- dependent Business, we were told that the American Tort Reform Association claimed lawsuit filings have tripled in the last 30 years, and that more than 18,000,000 law- suits are currently pending in state courts - an increase of 30 percent from just six years ago. The fact is, according to the National Center for State Courts, lawsuits filed on behalf of injured citizens dropped 9 percent between 1986 and 1997, while criminal filings increased 45 percent, ju- venile filings increased 68 percent and domestic relations filings increased 77 per- cent. Again, the facts just don’t support the allegation that cases filed on behalf of in- jured citizens are skyrocketing. Another allegation made in the Faris ar- ticle is that juries routinely assess huge punitive damages and the whole system has “gone mad.” Yet the fact is, according to a study by Suffolk University Law Professor Michael Rustad, between 1965 and 1990 juries assessed punitive damages in fewer than 400 products liability cases (less than 16 per year). In more than 75 percent of those cases, the manufacturer withdrew the unsafe product from the market, made the design safer or strengthened safety warnings. A United States Department of Justice
study released in July 1995, showed that out of all of the civil cases (tort, contract, property, etc.) resolved in the nation’s 75 most populated counties in 1991 and 1992, only 360 involved product liability. Of those 360 cases, punitive damages were awarded in only three cases. The total pu- nitive damages awarded in the three cases was $40,000. The median award was $9,000, and the average award was $12,000. Again, the facts don’t support the argument that juries have “gone mad.” According to data from a 1995 study
12 Responsible Juries
Despite the facts, allegations keep com- ing that lawyers have nothing better to do than file “frivolous lawsuits.” “Out of con- trol” juries are bankrupting businesses. Again, the fact is, according to the Novem- ber 29, 1999 issue of the Washington Report, only about 50 percent of all juries even return a plaintiff’s verdict. The rest are defense verdicts. In my experience, juries take their re- sponsibilities very seriously and consider all of the facts in reaching their decision. Although many times (probably 50 per- cent of the time since 50 percent of the time juries return defense verdicts), plain- tiffs’ lawyers don’t agree with the verdict, we still believe the jury system is the best system in the world. Juries have a collec- tive wisdom that is rarely wrong. The citizens who serve on juries will typically look at all the facts and try to reach a just decision, even when it comes to deciding whether a punitive damage award is war- ranted.
The Illogic of Our Detractors You see, it just doesn’t make sense to
file a frivolous lawsuit. Most average citi- zens hire trial lawyers who either own small businesses or are employed by small busi- nesses. The vast majority of trial lawyers who represent families, injured workers or consumers are themselves employed or as- sociated with law firms that are small businesses. We have limited money, lim- ited resources and no desire to take on cases that are frivolous. We’re too busy fighting the cases that are meritorious to mess with cases that don’t have merit. It just doesn’t make good business sense to do that.
Facts on Torts in the Courts Another allegation set forth by critics of
Trial Reporter
by the Rand Institute for Civil Justice, pu- nitive damages awards between 1990 and 1994 decreased 59 percent from the 1985 - 1989 period in San Francisco and Cook County, Illinois. In the 1990-94 period, punitive damages were awarded in only two percent of all cases in San Francisco and one percent of all Cook County cases. According to LRP Publications’ Jury Ver- dict Research Series, punitive damages accompanied compensatory awards in three percent of the cases in 1991, only two percent of the cases in 1992, and only one percent of the cases in 1993 through 1997. Therefore, the trend appears to be that fewer cases, and not more cases as al- leged, are being awarded punitive damages. It hardly sounds like a system that has “gone mad.”
the civil justice system is that the “explosion” of lawsuits being filed is clogging the court system and that the system doesn’t work as a result. Yet in recent non-partisan and inde- pendent studies compiled by the National Center for State Courts (or Court Statistics Project funded by the Department of Jus- tice), these allegations are refuted. These studies show that in the federal district court system from 1994 through 1997, the over- all number of federal tort trials declined 13 percent. In the federal district courts from 1996 to 1997, 97 percent of tort cases never reached trial (Bureau of Justice Statistics, February, 1999). In the state system, according to the
Court Statistics Project, fewer than three of 100 tort cases go to jury trial and less than one percent of tort cases are resolved by bench trial. The Administrative Office of the Courts in Kentucky reported that in 1998 through 1999 only .07 percent of the caseload involved personal injury law- suit filings. This is down from .09 percent during the same period from 1995 through 1996. The vast majority of cases filed dur- ing 1998 through 1999 were domestic and family issues, circuit criminal issues and contract issues. Again, the facts don’t sup- port the allegations. Lawyers representing injured citizens actually filed fewer cases during this period.
The Competitiveness Myth Another popular propagandized myth is that trial lawyers and the civil justice sys- tem hurt business competitiveness. However, according to the 1995 World Competitiveness Report issued by two Swiss groups, the United States has the most competitive economy in the world. According to the 1997 Cost of Risk Sur- vey by Tillinghast-Towers Perrin and the non-profit Risk and Management Society, insurance costs for United States businesses steadily declined every year between 1993 and 1996. The December 1997 Washing- ton Times, reported that United States manufacturing is at its strongest position in the last twenty years, accounting for al- most twenty percent of real gross domestic product.
In early 1996, the President of the National Association of Manufacturers told the Washington Post that “the U.S. economy has become the envy of the industrialized world.” A Bureau of Economic Analysis news release stated that big business’ an- nual profits have increased nearly 40 percent since 1994. According to a Febru- ary 1994 Wall Street Journal article, American industry is the leader, or is highly competitive, in every major global indus-
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