Victimizing the victims.
According to tort reform proponents, business is beleaguered by a wave of plaintiff lawsuits with huge damage awards. The only hope for relief, claim the business lobbyists, is to limit the number and scope of these lawsuits.
"Lawsuit abuse raises consumer prices, cripples companies, drives down shareholder value and clogs our courts with frivolous lawsuits that do little more than enrich unscrupulous lawyers," says Lisa Rickard, president of the Institute for Legal Reform, an affiliate of the U.S. Chamber of Commerce.
But the numbers don't support the corporate claims. The frequency of tort suits has been declining for a decade. According to an April 2004 Department of Justice study, the number of tort cases in state courts declined by nearly a third (32 percent) between 1992 and 2001. Only 3 percent of cases ever go to trial and the median jury trial award fell by more than half, from $64,000 in 1992 to $28,000 in 2001.
To date, special interests and Republican lawmakers have been unable to capitalize on their political gains to achieve tort reform at the federal level--though state limits on the ability of victims to sue makers of defective products, negligent doctors and other perpetrators are spreading like wildfire.
Over the past two years, the GOP has moved the tort reform efforts to the top of its agenda. Three Bush administration-supported measures have passed the House of Representatives but died narrowly in the Senate. Medical malpractice reform, significant changes to class action lawsuits, and limitations to asbestos liability claims have all been flagship measures in the broader tort reform effort of the big business-Republican alliance.
Medical Malpractice: Approximately 80,000 people die annually in the United States as a result of medical error and negligence in hospitals alone, according to the Harvard School of Public Health, and hundreds of thousands more suffer from lesser injury or disease due to malpractice. A relatively small fraction of these injured patients or their families sues for compensation--many remain unaware that their ailments are due to malpractice and were preventable.
Doctors have contended the real problem is not bad care, but excessive lawsuits. They contend that frivolous lawsuits have driven up the cost of malpractice insurance, thereby driving up the overall costs of health care.
"The civil litigation system in the United States has evolved into a 'lawsuit lottery' where a few patients and their lawyers receive astronomical awards, and the rest of society pays the price," wrote the president of the American Medical Association (AMA) in endorsing a medical malpractice reform proposal introduced by Representative Jim Greenwood, R-Pennsylvania. Greenwood's legislation would cap pain and suffering awards for medical malpractice suits at $250,000. Consumer groups say the plan would disregard the extent of injuries patients suffer and unfairly disadvantage children and seniors with little income to justify economic damages (primarily income lost due to injuries).
A tiny number of doctors commit the majority of malpractice cases. About half of recent malpractice premium increases are related to losses insurers faced on Wall Street, not increases in lawsuits, according to the General Accounting Office, the Congressional research arm. Moreover, it is not easy to win a malpractice claim--in part, consumer groups charge, because jurors have been poisoned by anti-patient propaganda from the insurance industry and doctors' groups. Only about a quarter (27 percent) of plaintiffs win malpractice cases, according to the 2004 Department of Justice study.
The broad medical malpractice legislation supported by the AMA failed in the Senate in July 2003, but efforts to tailor it to certain specialists continue.
Class Action: Class action lawsuits allow individuals who may have small individual claims to pool their interests with others. Together, they can bring a single economically viable suit. Class actions have been a vital tool when many consumers are slightly damaged by a corporation's actions--like small overcharges on phone bills or credit cards--which in total could cost many consumers a great deal.
Proposed class action "reform" legislation, introduced under the name of the Class Action Fairness Act, would fundamentally change the way class action lawsuits could be brought, handing corporate defendants important procedural advantages, primarily by moving class action lawsuits from state to federal courts. Federal courts often interpret state laws narrowly and conservatively. Moreover, certifying a class of plaintiffs in federal court is more difficult than in many state courts, reducing the number of approved class action suits.
"Jurisdictional changes mandated by [the legislation] are designed to impede class action, not to make them fairer or more efficient," argued the U.S. Public Interest Research Group and the Consumer Federation of America in an April 2003 letter. "The Class Action Fairness Act will substantially reduce the effectiveness of one of the most important legal tools consumers now have."
Despite the hype from business interests, few class action suits are filed. Regardless, industry and trade associations hired 475 lobbyists during 2000 2002 to promote the class action legislation. The Chamber of Commerce spent $22 million lobbying Congress in 2000-2002 to advance its overall tort reform agenda, of which class action changes were the key element.
Despite the pressure from business interests, in October 2003 the class action measure failed to garner enough support to pass the Senate. Democrats, who receive strong financing from trial lawyers and are lobbied heavily by consumer groups, refused to support the proposal. After failure of the deal, a handful of Democratic Senators--enough to get a bill passed--agreed to a compromise only mildly different than the legislation that had been rejected. At press time, it remains unclear whether the Republican leadership will be able to maneuver to get the revised class action bill debated and passed.
Asbestos: Asbestos-related diseases cause 10,000 deaths a year in the United States, a figure projected to remain steady over coming decades, based on old exposures and even though most uses of asbestos are now banned. Evidence uncovered in lawsuits show the companies that produced and used asbestos concealed the risks of asbestos for decades. The Environmental Working Group recently publicized the asbestos industry's secret memos detailing efforts to hide the effects of asbestos on workers.
A 1958 memo by National Gypsum noted "just as certain as death and taxes is the fact that if you inhale asbestos dust you get asbestosis."
Nearly 20 years later, an internal Exxon memo stated "not only are we violating the existing regulations concerning clothing by not providing such clothing and laundering it, but we are also failing to protect our employees and the families of our employees from asbestos exposure."
The gross disregard for the health of workers is one of the reasons the asbestos industry fares so poorly in the courtroom. Many of the original asbestos manufacturers have gone bankrupt, so exposed workers are suing the companies that used asbestos in their equipment and thereby exposed them. The enormous number of victimized workers, and the widespread use of asbestos despite dangers known to corporations, means that lots of companies--including Owens Corning, Halliburton, WR Grace and U.S. Gypsum--have major outstanding asbestos liabilities.
A bill to consolidate and protect asbestos companies and companies that used asbestos products has struggled through the Congress for several years. The companies have tried to limit their financial exposure by setting medical limits on who can receive damages from companies that made or used asbestos that are so stringent that many victims would be ineligible.
Senator Orrin Hatch, R-Utah, provided the rationale for such measures in a statement on the Senate floor this April: "The fact is that unscrupulous personal injury lawyers are abusing the system and getting a windfall. They know that companies, even ones with the most remote connection to asbestos, are fearful of runaway verdicts."
Supporters of the bill contend that the asbestos liability suits are driving these companies into bankruptcy. But consumer and labor groups say the bankruptcy provisions are relatively attractive for corporations facing asbestos liability, so it is no surprise that companies are seeking bankruptcy protection. Nearly 80 companies are already enjoying the asbestos bankruptcy provisions, and most are prospering.
Republicans and the Bush administration have not been able to force through their asbestos bill. Organized labor has been receptive to a compromise arrangement that would provide for arbitration of asbestos claims and impose limits on what exposed workers could recover, but not on the terms offered by Republicans. In April, asbestos bill negotiations stalled in the Senate.
Victims' rights to sue makers of dangerous products and bad doctors exist more precariously now than ever before, and may even face a major setback through class action revisions this year. Whether the narrow Senate minority blocking the full range of such business-backed changes continues, and whether there is a White House that eagerly supports such proposals, will depend largely on the November elections.
|Printer friendly Cite/link Email Feedback|
|Title Annotation:||IV. Consumer Rights|
|Date:||May 1, 2004|
|Previous Article:||Bankruptcy rules: leave the children behind.|
|Next Article:||Mad cow, mad policy.|