Monday, September 24, 2007

Frivolous Lawsuits?

I'm a civil defense attorney. I deal with bogus claims all the time. You might suspect I support tort reform, right?

I do. But I oppose damage caps, the traditional tort reform weapon.

Damage caps do reduce payouts from civil defendants such as doctors, insurers, and large companies. However, they do so by reducing the maximum damage award that any plaintiff can obtain, whether his claims are legitimate or not.

This is a problem because it doesn't prevent frivolous lawsuits. It merely caps the value of any qualifying lawsuit. The fact that this reduces a jury verdict has huge secondary effects. If the maximum exposure decreases from $20 million to $250,000, settlement negotiations start WAY lower. This punishes the people with legitimate claims.

In some jurisdictions, if your 6 year old child is killed by a drunk doctor during a routine operation, your damages are capped far lower than if someone negligently burned down my house. Who is more culpable? Who suffered more damage?

Think of it this way: Teachers and coaches frequently punish an entire class or team, based on the misdeeds of a few. They do so to utilize peer pressure to encourage good behavior. This logic doesn't carry over to litigation.

First, even if the law did effectively cease all frivolous lawsuits, it would only result in punishing 100% of the valid litigants.

Second, the law doesn't offer any type of positive or negative reinforcement to those who file a bogus claim. Bogus claims can receive just as much as valid claims, even post-tort reform. It's just that all claims are capped.

I don't plan to vote for John Edwards, and I'm sure his plan has flaws. But requiring plaintiffs to establish that their claims have at least some basic level of legitimacy will prevent "frivolous" lawsuits far more than damage caps. More importantly, it won't have the huge fallout of robbing deserving plaintiffs of a legitimate recovery.

1 comment:

jason said...

Further, I am aware of several studies which have concluded that the states which have enacted caps have not seen any significant reduction in insurance rates. What a surprise...the insurance companies aren't passing on their savings to the consumers!