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West Virginians understand why President Bush is fighting for tort reform as part of his ‘ownership society’ agenda. The state has one of the most dysfunctional legal systems in the nation. In fact, Harris Interactive conducted a poll of senior corporate lawyers who rated West Virginia’s courts the second worst in the country, topped only by Mississippi. With comprehensive tort reform taking effect in Mississippi on September 1st, West Virginia is a likely candidate for bottom of the list in the coming years.
The harm caused by this broken court system is enormous. Litigation costs alone are a burden to the state economy, and legal costs in West Virginia are rising more than ten times faster than the economy as a whole since 1978. More importantly, frivolous lawsuits are chasing businesses out of the state. The Perryman Group, an economic analysis firm, found that West Virginia’s court system cost 10,678 jobs in 2001 because companies left West Virginia for more favorable legal climates.
Even when businesses do stay in the state, consumers ultimately bear the price of litigation. Firms pass tort costs onto consumers in the form of higher prices. While this regressive “tort tax” is a problem for all Americans, it is especially acute for West Virginians. The Perryman Group found that families in West Virginia would pay almost a thousand dollars due to a combination of lower wages and higher prices relative to the US by 2006 due to frivolous lawsuits.
The end result is a poor business environment and slower growth in West Virginia . The state economy is expected to grow at half the rate of the national economy, according to West Virginia University forecaster George Hammond. If West Virginia does not reform its courts, it will continue to lag behind the rest of the country in the foreseeable future.
Fortunately, the November 2nd elections could be a turning point for the Mountain state. As one of the swing states, West Virginia will have an opportunity to affect the outcome of the national elections. President Bush has made tort reform a key part of the “ownership society,” his agenda for economic growth, and in this year’s election in general. On the state level, in November West Virginia voters will choose the next governor and fill a twelve-year seat on the West Virginia Supreme Court. This is an important opportunity to push for reform of the courts on both federal and state levels.
The momentum for tort reform already exists in West Virginia. Doctors were leaving the state due to frivolous medical malpractice suits and exorbitant awards. Citizens worked with striking surgeons from Wheeling Hospital for reform, and their persistence forced Governor Bob Wise to push through medical malpractice reform, capping pain and suffering awards in malpractice suits to $250,000 and trauma awards to $500,000. Just four weeks after this legislation was passed, Charleston Area Medical Center saw increased physician recruitment. This isn’t the final answer on medical malpractice lawsuit abuse, but it is a good start.
Now it is time to fix the problems with medical malpractice, product liability, forum shopping, workers compensation and class action lawsuits in West Virginia and the country as a whole. The West Virginia House of Delegates only narrowly missed an opportunity to pass meaningful tort reform at the end of the 2004 session. The state House Education Committee, by a vote of 22-3, inserted a provision into the education bill that would have eliminated third-party bad faith lawsuits. These suits allow plaintiffs to file lawsuits against not only the defendant, but also the defendant’s insurance company, ultimately driving up premiums. Unfortunately, the House Rules Committee struck down the measure.
We are also continuing to work for tort reform on the federal level. The House of Representatives passed the Class Action Fairness Act of 2003, which would have moved cases to federal courts where there is less potential for abuse. In spite of bipartisan support, the Senate killed the measure by a one vote filibuster.
West Virginians can expect the well-funded trial lawyer lobby to fight against legal reform tooth and nail. Using the money they get from unreasonable awards, the trial bar aggressively blocks virtually all common-sense tort reform legislation. The trial lawyers won a number of victories this year, the biggest of which was the choice of trial lawyer John Edwards for vice president on the Democratic tickets. Edwards is a Senate leader against curbing abusive lawsuits.
Despite it all, the facts are on our side. Thanks to the involvement of volunteers like you, the tide is beginning to turn. In West Virginia, more than 7,000 volunteers became involved in Citizens Against Lawsuit Abuse this year. A number of other states have passed meaningful reforms as well. The trial lawyers are on the run, but only hard work by citizen activists can bring justice back to West Virginia’s courts.