Access denied: 'tort reform' rhetoric is closing the courthouse door.

"Tort reform" efforts have been overtly focused on the most visible and formal aspects of the civil justice system -- the jury trial and the jury verdict Typical reform measures, for instance, place caps on damages in certain types of cases such as medical malpractice or products liability or limit the availability and size of punitive damages awards. Consequently, the effects of "tort reform" are generally thought of primarily in terms of fewer plaintiff verdicts and lower awards. The effects are, however, more broad and more subtle.

Legislative enactments are only the end products of a political process that includes convincing policy makers and the public that some action is required. In the case of "tort reform," the process leading to the passage of legislation has involved an intensive public relations and lobbying campaign that characterizes the civil justice system as one desperately in need of fixing.

An examination of the effects of "tort reform" must, therefore, also consider the consequences of the rhetoric that has been used so successfully by its partisans on both local and nationwide levels over the past 15 years. These efforts include everything from the ubiquitous use of the infamous "McDonald's coffee case" to the assertions of an insurance crisis, the loss of business competitiveness in the global economy, the diminution of health care services, and the loss of jobs and economic security.

The use of this more complete contextual definition of "tort reform" helps us better understand the scope of its impact. The long-term and fundamental effects can be seen as reaching beyond the reduction in size or frequency of damages awards and other direct targets of legislation. The effects include the impact of reform rhetoric on the way individuals think about and use the civil justice system.

As we are learning from a study we are conducting of the plaintiff bar in Texas, one of these more subtle consequences of "tort reform" activity may be the reduction of access to the civil justice system for injured people.

During the past two years, we have conducted more than 50 in-depth interviews with plaintiff personal injury lawyers on their careers and their practices. Although Texas has been our study site, the findings reach beyond the geographical confines of one state and tell us generally how the legal community reacts to changes such as those initiated by "tort reform."

Personal injury lawyers are highly sensitive to changes in the civil justice system and in the local legal culture. We have found, much as Joseph Calve reported in a recent article in The Texas Latvyer,(1) that Texas plaintiff lawyers are actively engaged in reconstructing their practices in response to their perceptions about the effects of "tort reform."

A successful plaintiff personal injury practice requires a steady stream of clients with compensable injuries, and that in turn depends on attorneys' developing reputations for getting good results for the people whose cases they accept. The nature of a contingent fee practice obviously also dictates that a plaintiff lawyer's survival is tied to achieving a financial recovery for a client.

These lawyers, therefore, must be particularly adept at reading and reacting to alterations in the legal milieu -- in the local legal culture or the law itself. Their response to these changes may be reflected in which types of cases they accept and how they handle them.

As plaintiff lawyers reconfigure their practices, consumers of legal services are affected. For most potential users of the civil justice system, these lawyers are the gatekeepers. As political scientist Herbert Jacob observed, they "hold the keys that open or close the gates of the legal system."(2) "Tort reform" may be closing these gates or at least narrowing the opening substantially through its effect of limiting access by consumers.

Formal system change

The lawyers we interviewed spoke about the effects of a number of formal changes in the legal landscape as a result of "tort reform," although the specifics vary depending on each lawyer's case mix -- which determines the types of consumer rights being affected -- and the location of his or her practice. Almost all of them agreed on some key points.

Generally they indicated that, although they are concerned about the loss of the deterrent strength that the legislative cap on punitive damages might cause, the effect of this formal change has been relatively minor.

These lawyers reported that punitive damages have always only been very rarely awarded. The lawyers commented that even when juries made these awards, they were generally reduced or eliminated either as a result of post-trial motions or by later appeal.

Indeed, our own empirical research on jury verdicts in Texas demonstrated that not only have punitive awards been infrequent, but few of the original punitive awards reached the threshold of the legislative cap in place at the time of our review. For example, only 3.2 percent (17) of the 529 punitive damages awards in trial courts in Dallas County in the 20 years between 1970 and 1990 exceeded the limits enacted as a part of the Texas Omnibus Tort Reform Act of 1987.(3)

The effect of a substantial revision of the law regarding how workers' compensation matters are to be handled and how attorneys are to be paid has been much more dramatic. Almost every lawyer we interviewed said that as a result of this reform, it is no longer economically feasible for plaintiff lawyers to handle these matters in a professionally responsible way. Only a handful of lawyers continue to take these cases, leaving many workers injured on the job without legal representation.

One Austin lawyer whose office had handled workers' compensation cases before the reform said,

I feel so sorry for these comp clients, and they call us all the time asking for advice. We don't even keep up with the law anymore, so we can't give it to them.... The claimant is now at the mercy of the insurance companies with only a state bureaucrat to protect them against their abusers.... [T]here's nothing we can do about it.

A Fort Worth lawyer commented on a factor that exacerbates this problem: "So it's very sad for the inarticulate worker in particular, because anybody that is inarticulate ... has a huge problem because they can't communicate what's going on in the first place, and the system is totally stacked against them -- and that's a real sad situation."

One of the few lawyers who still handles workers' compensation cases explained why he has chosen to do so in spite of the inherent problems created by reform. He recited comments made by an insurance company representative during hearings on the operation of the new workers' comp process:

"I was just down in the Valley [the Rio Grande Valley in south Texas] where we're knocking them dead.... There's only been two hearings in the first year of the Workers' Compensation Act."

Our interviewee described his response to this.

Two hearings in the first year in the Valley. Two case hearings, and you know, I thought that's not right. Something's wrong here.... So I jumped on a plane, went to the Valley, and started snooping around. And what I found was that there was not a single lawyer in the Rio Grande Valley doing workers' comp. Nobody was representing the injured worker... So what I did was open an office ... [and] before we even put up the name on the door ... we had people like two blocks long standing in line....

Echo effect

Many lawyers also talked about the effects of other changes they have perceived in the legal milieu. They speak of an echo effect that "tort reform" has had in the public arena, which is resounding from the jury box. Plaintiff lawyers say jurors are becoming increasingly anti-plaintiff and anti-plaintiff-lawyer as a result of exposure to the public relations campaign conducted by the interest groups espousing reform.

Although there are no reliable data for direct, systematic empirical verification of this campaign's effects, earlier work has touched on similar issues. Research involving actual jurors where individuals sued businesses in tort cases suggests that jurors may well be suspicious of the legitimacy of plaintiffs' claims and worry about the social costs of large verdicts.(4)

An older study looked at a public relations campaign similar to the current one and found an effect. The study tested the influence on jurors of insurance company magazine advertisements complaining of what were characterized as ridiculously high jury verdicts. This work found that "even a single exposure to one of these ads can dramatically lower the amount of award a juror is willing to give."(5) Specifically, jurors awarded less for pain and suffering.

The perception among lawyers we interviewed is that the effect of the current "tort reform" rhetoric is strong. During the voir dire process, trial lawyers are hearing recitations of the reform rhetoric that speaks of undeserving plaintiffs and the exorbitant incomes of their lawyers. As one of our interviewees told us,

There is a big myth perpetuated by the insurance industry about [frivolous lawsuits], and it's a tough myth to break.... When we go over and try cases, right away we have to tell the jury, you know, "Do you all believe that simply `cause this is a personal injury case that somehow this is a frivolous case?"

Plaintiff lawyers report that juries today are even more reluctant than they were in the past to assign liability to defendants in personal injury trials. Also, even if juries find liability against a defendant, they are likely to limit damages awards to lost wages and out-of-pocket medicals. Jurors have become substantially less likely to make awards for pain and suffering. One experienced Dallas attorney noted, "Dallas has always been conservative, but they've gotten to the point now where they'll pay you more money for your beat-up Mercedes Benz than they will for a beat-up body."

Jury verdicts, of course, resolve only a small proportion of the matters that come within the ambit of the civil justice system. They are, however, the most visible component and, as such, set the going rates for valuing cases at settlement, where the bulk of personal injury matters are concluded. As juries become more reluctant to make awards, or they reduce the value of certain types of injuries, insurance companies and adjusters, well attuned to the "market pricing" of injury, have lowered their settlement offers.

As an Austin attorney who primarily represents people involved in auto crash cases reported,

We know we're going to get unfair offers [from insurance companies]. The [companies] will deny this till their dying breath, but we talked about it at our trial lawyers meeting. We know the month, I forget what it is right now, but about two years ago they were paying basically three times your specials. They changed it to two and one-half.

Reluctant plaintiffs

The reform rhetoric also has a secondary effect on the general public that manifests itself as increased reluctance by an injured person to pursue a legal action. One lawyer we interviewed said, "Ninety percent of my clients who come in here tell me lawsuits are bad, and they apologize for being here. ... It's just outrageous. I'm sitting here having to convince my own client not to apologize because of that movement [tort reform]."

A Dallas lawyer was a bit more graphic in his remarks on the subject.

People come in to me, and they are abjectly apologetic. They say things [like]: "I've never sued anybody before. I don't really want to sue anybody. I wouldn't be doing this if it weren't ..." ... and I don't know whether this is true for everybody else, but ... people around here, if they have to sue somebody, it's like admitting that they've sexually abused their children. They are embarrassed about it. It's incredible,

That individuals are becoming even more reluctant to pursue remedies in the civil justice system for harm caused by others is a matter for concern because, as research has shown, contrary to the picture of an overly litigious populace, the vast majority of people who are wrongfully injured do not even consider pursuing personal injury claims for compensation.

A 1991 national survey by the Rand Institute found that not only do most people injured by the actions of another person not consider claiming, but even if they do, they rarely pursue the matter. The study found that only 1 in 10 injured people turned to the formal legal system for compensation.[6]

Many lawyers with whom we have spoken have changed or are changing their practices to reflect these alterations in the legal landscape. For a great number of them, replacing workers' comp cases, which accounted for between 20 percent and 40 percent of their practices, has required substantial restructuring. Perceived changes in the litigation and settlement arenas are provoking responses as well.

Some lawyers are diversifying their practices beyond personal injury cases. For one segment of the traditional plaintiff bar, this includes expansion into commercial litigation, taken on a contingent basis if possible. Another group of personal injury lawyers is branching more broadly into the personal legal service sector, taking on bankruptcy and family law matters. Others are struggling with the question of whether to remain in a plaintiff practice at all.

Some lawyers who continue to handle personal injury cases are altering the ways they construct their practices. As jury pools become more reticent and insurers and their adjusters ratchet down the value of injury, plaintiff lawyers are screening their cases even more carefully than before.

One Fort Worth attorney described his firm's screening process for auto cases:

We take it from the perspective that the odds are stacked against us no matter what the facts are.... The statistics are that 7 out of 10 rear-end collisions are losing because of the propaganda factor. So that means that if somebody is sitting at a traffic light and gets smashed in the back, they can lose the lawsuit if there's no proximate cause found, which is ridiculous, but that's what happens. So we take that perspective on every case we take. The odds are against us no matter what it is....

This attorney said the ideal situation for most plaintiff lawyers is

to limit the number of ducks you have to chase and make [your case mix into] a situation where they are going to be more profitable to work on, not as risky, if you can: better fact patterns. . . . Pretty soon [you're] filtering everybody out but the very best, which is great to do if you have that choice, but then a lot of people get left in the dust, too. And that bothers me.

The people "left in the dust" are the ones who may be the unfortunate beneficiaries of the more subtle yet pervasive effects of "tort reform." While the plaintiff bar reacts to the changes wrought by "tort reform," the gates to the courthouse will be offering restricted access. Without access, legal remedies lose their value.

For the most part, there is no place for an injured worker to go in Texas. There are fewer places for a person to go who has soft tissue damage from an auto crash or from a premises incident that was not his or her fault. As a practical matter, "tort reform" is about disenfranchisement.

Notes

(1.) Joseph Calve, Poured Out, tex. law., Dec. 16, 1996, at 1.

(2.) Herbert Jacob, Law and Politics in The United States 123 (1986).

(3.) Stephen Daniels & Joanne Martin, Civil juries and the politics of reform 237 (1995).

(4.) Valerie P. Hans & William S. Lofquist, Jurors' Judgments of Business Liability in Tort Cases: Implications for the Litigation Explosion Debate, 26 Law & Soc'y Rev. 85,93 (1992).

(5.) Elizabeth Loftus, Insurance Advertising and Jury Awards, A.B.A. J., Jan. 1979, at 69.

(6.) Deborah Hensler et al., Compensation for accidental injuries in the United States 121 (1991).