Review on Legal Reform

Review of article "Are lawyers burning America?"

The article, "Are lawyers burning America?", focused on the attempts to deal with tort reform by Congress and reported on legislation passed in the House of Representatives to set national restrictions for punitive damages. Press and Carroll (1995) focused on the case of Liebeck and McDonald's. The authors pointed out that there are no easy ways of regulating foolish and wasteful lawsuits.
In the case presented by the authors, the plaintiff was Stella Liebeck and the defendant was McDonald's. Stella Liebeck purchased a cup of coffee from McDonald's in New Mexico on the morning of February 27, 1992. While trying to open the lid, Liebeck was scalded by the 170-degree cup of coffee. By the time she entered the emergency room, Liebeck had second- and third-degree burns on her buttocks, thighs, and labia. After Liebeck went through a difficult recovery period, her family approached McDonald's for reimbursements, out-of-pocket expenses, and lost wages of her daughter, who stayed home with the plaintiff. The total out-of-pocket expenses were approximately $2,000. According to Liebeck, McDonald's offered only $800. The plaintiff sued the defendant and was awarded $2.7 million in punitive damages. A month later, the trial judge reduced the award to $640,000. The two sides settled for an undisclosed amount of money in an out of court settlement.
The authors claimed that the main focus of the bills that were fought over in 1995 were to change the balance of powers in the courthouses. One side consisted of the business, trade, and medical association; the other side was made up of the consumer groups and the Association of Trial Lawyers. The former pushed for setting national limits in the areas of punitive damages and medical malpractice; whereas the latter argued for a need to penalize immoral corporate misconduct.
I agree with the authors, that there are no quick or easy solutions to regulate the large numbers of unnecessary lawsuits. I also support the idea of the new reform that modifies the contingency fee arrangements. Under the new reform, the attorney fees would be capped at ten percent of the first $100,000 of the settlement and five percent of the rest of the settlement. Since new reform would put most of the awards and settlements in the hands of the people that were actually hurt by the defendants, there would be less incentive for the lawyers to take on unnecessary lawsuits on contingency bases.


References
Press, A. & Carroll, G. (1995, March, 20). Are lawyers burning America?
Newsweek,125(12), 32.

Alex Best