Fixing the legal system.
EVEN THOUGH growth is picking up, the U.S. economy is suffering greatly because of the nation's tort system. With the explosion of litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute.
When a person begins a civil lawsuit, the person enters into a process called litigation. , our legal system is out of control. Courts are clogged with frivolous Of minimal importance; legally worthless.
A frivolous suit is one without any legal merit. In some cases, such an action might be brought in bad faith for the purpose of harrassing the defendant. lawsuits. According to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. the most recent figures, about 15 million suits are filed in state courts each year, or one every two seconds. This litigious litigious adj. referring to a person who constantly brings or prolongs legal actions, particularly when the legal maneuvers are unnecessary or unfounded. Such persons often enjoy legal battles, controversy, the courtroom, the spotlight, use the courts to punish climate costs about 2 percent of our Gross Domestic Product and will rise to 2.4 percent. That means costs of about $200 billion a year could reach $300 billion by 2005. While insurers, including AIG AIG addressee indicator group (US DoD)
AIG American International Group, Inc
AiG Answers in Genesis (religious group in defense of Scripture)
AIG Artificial Intelligence Group
AIG Australian Industry Group , are directly affected by the tort problem, this is an issue for every CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. as we head into 2004.
The core of the problem is that trial lawyers have led many in our country to believe we live in a "riskless" society, lf you trip, become ill, lose money in a speculative investment or gain weight, someone else has to pay for it. A sense of accountability has been lost. Americans expect to be reimbursed by somebody. They don't recognize that in reality, everybody is paying.
The major beneficiary in all this has been the trial bar. They are profiting at the expense of the broader economy. Look at what's happening in the medical malpractice Improper, unskilled, or negligent treatment of a patient by a physician, dentist, nurse, pharmacist, or other health care professional. field. Many doctors have given up their practices because of malpractice costs. Even some hospitals can't afford the insurance. Republican Senator Bill Frist of Tennessee has talked about getting a federal law change to bring that problem under control and bring some standards to the negligence field. The problem will have to be dealt with on a state-by-state basis. That will be a long, hard struggle.
Two other major issues are asbestos and class-action lawsuits. So far, the asbestos morass has taxed the economy with $54 billion in litigation costs. Some 70 companies have gone bankrupt, causing 60,000 jobs to be lost. Moreover; it's estimated that 128,000 jobs have not been created. Having bankrupted the asbestos manufacturers, the trial lawyers are now going after the distributors and retailers. Businesses that had anything to do with asbestos, no matter how remotely, are on the hit list for the trial bar.
Since early this year, Congress has been considering action on the asbestos issue. Meaningful asbestos reform would centralize cen·tral·ize
v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es
1. To draw into or toward a center; consolidate.
2. all pending and future asbestos claims in a federal court. We would have uniform medical criteria, and plaintiffs would have to demonstrate impairment. And there would be limitations on attorney fees.
Senate Judiciary Chairman Orrin Hatch Orrin Grant Hatch (born March 22, 1934) is a Republican United States Senator from Utah, serving since 1977.
Hatch is a member of the U.S. Senate Committee on Finance, where he serves on the subcommittees on Energy, Natural Resources, and Infrastructure and Taxation and IRS decided in the spring to support a trust-fund approach in which defendants and insurers would contribute a finite amount of capital to pay all asbestos claims on a no-fault basis. The at traction to this idea is that compensation would be paid on a timely basis, and there would be an end to this decades-old issue. That presumes that enough money will be available to pay victims over the anticipated 50 years of the life of the fund. A successful trust-fund approach would have to bring together not only the defendants and the insurance industry, but also organized labor Organized Labor
An association of workers united as a single, representative entity for the purpose of improving the workers' economic status and working conditions through collective bargaining with employers. Also known as "unions". and the trial bar. Senator Frist has been working to achieve a compromise.
Class-action reform also has been under consideration at the federal level. Class actions were originally conceived as a means for people with similar grievances to join a common suit and receive compensation. But now, they've turned into a lucrative avenue for lawyers to attack companies on behalf of clients who may be unaware that they're being represented and, thus, never really compensated. In most settlements, consumers receive only a small fraction of the total award. In a recent award involving a cereal manufacturer, lawyers received $2,000 an hour, while class members got coupons for cereal. In a settlement last year with a large video retailer, trial lawyers took in $9.25 million in fees and expenses. Plaintiffs got two free movie rentals and $1-off coupons.
In addition to federal legislation, we need to focus on the state level, where there has been some modest progress. Just recently, Texas passed changes in its tort law A body of rights, obligations, and remedies that is applied by courts in civil proceedings to provide relief for persons who have suffered harm from the wrongful acts of others. as it affects medical malpractice. It took a constitutional amendment to bring this about. Nobody would have thought that possible. Many other states are now looking at their legal systems.
To accelerate change on a state-by-state basis, the U.S. Chamber of Commerce The U.S. Chamber of Commerce is the world's largest not-for-profit federation of businesses, representing more than 3 million businesses and organizations in the United States. As of 2003, the chamber was comprised of 3000 state and local chambers and 830 business associations. has ranked every state, from best to worst. Companies that operate internationally typically rank countries, particularly developing countries, on the adequacy of their legal systems, on how they treat foreign investment and on the transparency of the regulatory process. Why shouldn't we also do this for every state? The general counsels of several hundred companies took part in this effort.
Then the chamber ran an ad with its ranking. You'd be surprised at the number of governors and legislators who called and asked, "Why are we No. 40?" or "Why are we No. 45"?" It got their attention. Why would business invest in those states? Why would any company want to invest in a state that treats you like the enemy and where the court system is rigged against you? Why would an insurer buy their municipal bonds? Virtually every state is confronting a budget deficit and job losses. There has never been a better season to bring about some change.
In the absence of meaningful tort reform, insurance companies might flatly refuse to insure certain types of risk, no matter what the premium is. I cannot speak for the entire industry, but why would an insurer want to continue to risk its capital insuring enormous risks that are virtually impossible to quantify? If Congress and the states do not take necessary action, writing insurance in high-risk areas--whether they be financial lines or liabilities resulting from the latest health scare--would be tantamount tan·ta·mount
Equivalent in effect or value: a request tantamount to a demand.
[From obsolete tantamount, an equivalent, from Anglo-Norman to writing a blank check Blank check
A check that is duly signed, but the amount of the check is left blank to be supplied by the drawee. payable to the trial bar.
There clearly are other national costs associated with the litigation frenzy. It's estimated the average family pays a "tort tax" of $1,000 a year. And innovation will continue to be impaired in states where litigation is frequent and costly.
The tort issue affects every CEO. I urge all of you to join us in what shapes up as a long and bruising bruising
discoloration and actual hemorrhage at the site of injury, and a serious disadvantage in the meat trade. In the first 12 hours after injury the bruise is bright red, at 24 hours it is dark red, at 24 to 36 hours it loses its firm consistency and becomes watery and at 3 or battle to fix a system that's run amok Amok (ā`mŏk), in the Bible, post-Exilic Jewish family. .