Beware of Shark-Infested Waters!

As trial lawyers rob decent, honest Americans of their money, trust, freedom, livelihood, and peace of mind, we all pay the price. We all have heard the outrageous stories about the woman who spilled coffee on herself and won millions or the doctor who won millions because his BMW had a bad paint job. Lawsuit abuse is a major problem in our society and an enormous drain on our economy.

In the last 20 years alone, tort fillings have risen 60 percent. The question is no longer if or when a lawsuit will affect us, but by how much.

How Did Our System Become So Out-of-Control?

Today, the civil justice system too often rewards irresponsibility. Our civil justice system has evolved into a “general social insurance scheme” where innocent people are expected to pay the costs of an accident, regardless of fault. Instead of focusing on who caused the wrong, our legal system focuses on who has the most money. The recent breast implant litigation provides a perfect example of this phenomenon. On June 21, 1999 the National Academy of Sciences declared that silicone implants do not cause serious disease. This news was too little too late for Dow Corning, who eventually filed for bankruptcy because of all the lawsuits, and others who paid out over $7 billion in settlements.

The Real Victims Of Our Legal System.

In 1994, there were over 815,000 new tort cases filed — that’s a new case every thirty-nine seconds. It comes as no surprise that last year, victims with legitimate injury cases were forced to wait an average of 65 months to go to trial — 15 months longer than in 1990. Because the courts are saturated with frivolous lawsuits, those with legitimate cases are forced to wait for years.

Fear of lawsuit reduces the volunteer workforce on which organizations and many disadvantaged citizens depend.

The current civil liability system undermines personal responsibility. Spill hot coffee on your lap? Sue the company that made you the coffee! Your kid misses a pop fly and bruises his face? Sue the volunteer Little League coach!

Allowing lawsuits against volunteers — like the Little League coach — has consequences. Surveys show that half of the board members of these volunteer organizations report a decline in the number of volunteers in the past five years, and there is little doubt that this correlates with the increase in the number of frivolous lawsuits.

The Trial Lawyers: The Nation’s Best and Brightest.

The majority of lawyers are good people. However, there is a select group of personal injury attorneys who are ruining the system for all of us. These “ambulance chasers” prey on the injured.

Overall, more than 50 cents of every dollar paid into the tort system goes to lawyers and the legal system itself, not the injured parties.

The Costs to the Taxpayer.

The cost of the U.S. tort system is over $163 billion each year, or 2.3 percent of GDP — more than two and a half times the average industrialized country. This figure is substantially higher than in 1970, when the cost of civil lawsuits was only 1.4 percent of GDP.

The current civil liability system hurts consumers by increasing the cost of numerous products. This “lawsuit tax” — the financial burden litigation imposes on society — adds $100 to the cost of a $200 football helmet, $500 to the price of a new car, and $3,000 to the cost of a heart pacemaker. Although these costs are hidden, they are very real; all American consumers pay them. Reform could yield a number of benefits. For example, researchers predict in some states, tort reform could reduce annual premiums for auto insurance by as much as 30 to 40 percent.

In fact, studies produced by the Texas Insurance Commissioner found that civil justice reforms reduce insurance costs. In 1995, Texas passed comprehensive civil justice reform. In 1997, the insurance commission released a report that found insurance rates decreased 30 percent because of these reforms. In 1999, the Texas Department of Insurance ordered $685 million more in tort reform savings on various lines of liability insurance during 2000. A study concluded that this final round of tort reform rate reductions will raise the total savings to an estimated $3 billion since the reforms were instituted in 1995. Though savings have been greatest in the auto insurance and liability policies (with each realizing over $1 billion in savings), over $217 million in savings were realized in the area of medical malpractice.

Innovation Stopped.

A Conference Board Survey found that 47 percent of U.S. companies have withdrawn products from the marketplace and 39 percent have decided not to introduce new product lines because of product liability concerns. Twenty-five percent have discontinued some form of research for the same reason. Moreover, in 1976, 10 percent of liability jury awards were $1 million or more, climbing to 30 percent in 1994-95. This environment stifles innovation, hinders progress and hurts consumers.

With 40,000 product liability lawsuits filed in the United States every year, analysts predict that almost 90 percent of U.S. manufacturing companies will be sued at some point, significant legal costs to the company.

One out of eight companies listed on the New York Stock Exchange have been accused of fraud. Already, half of the high-technology companies in the United States have been sued.

How to Fix the Legal System.

We need to give back our legal system to decent, honest Americans with real grievances. This means we need a system that not only enforces contracts and settles disputes peacefully, but also allows those who are harmed to seek and recover compensation from those who are truly at fault. Our proposed changes will make the system stronger, fairer, and more reasonable for everyone — especially those who have honest complaints.

We urge our legislatures at the state and federal levels to enact legislation that makes reasonable and much needed reforms. Here are some of the ways we can fix the current civil justice system.

People should have to pay only for harm they caused, with the amount paid proportionate to the harm they caused. (Under the current system, even if you could be found responsible for only 10 percent of the harm you could be found responsible for 100 percent of the compensation.)

People who pay for the harm and/or damages they caused — like lost wages, medical bills and pain and suffering — should not be liable for additional damages meant only as punishment, unless they are found to have caused the injury purposely or acted with gross negligence.

If someone is injured, the trial should take place either where the injury happened or someplace logical such as where the injured party lives or where the person or business that caused the injury lives or is headquartered.

Junk science should not be brought into courtrooms and introduced as evidence. (The current system permits paid “experts” who sometimes offer questionable testimony.)

States Taking Steps Toward Reform.

Reform is not a lost cause. More than 100 state court decisions have upheld tort reform laws, and despite the pressure imposed by trial-lawyer special-interest groups, progress continues to be made.

Many states, realizing that this system is out of control, are taking the necessary steps to fix their civil justice systems… Most recently, citizens in Alabama and Florida successfully passed new laws designed to bring about common sense solutions to their lawsuit abuse problems.

Alabama, once dubbed “tort hell” by Time magazine, has instituted caps on punitive damages, improved the class action lawsuit process, and reformed venue selection to end “forum shopping.” Florida has been equally successful. Like Alabama, they also instituted caps on punitive damages. Additionally, they provided immunity against criminal plaintiffs. While these reforms are a step in the right direction, there is still much more to be done.

What You Can Do to Help.

You can help give back our legal system to decent, honest, Americans with real grievances. Grassroots support is successful; there really is strength in numbers. Our elected officials take note of the issues that concern their constituents. Make your priorities the priorities of your elected officials. Join CSEF and our battle against the failing legal system.

Here are several ways that you can make a difference:

Step #1

Contact Citizens for a Sound Economy Foundation, and we will send you information that includes:

The names, addresses, and phone numbers of your senators and representatives.

Written tips on this and other economic issues to help you make a better-informed call or write a more effective letter to your elected officials.

Step #2

Find information on where your elected officials and candidates for public office stand on the issue of civil justice reform. This includes your state and federal senators, and representatives.

Step #3

Watch the courts. Now more than ever, greedy trial lawyers use state supreme courts to advance their agenda of more and bigger lawsuits. A unified grassroots base possesses the power to stop the trial lawyers from exploiting our courts. In some states, the voters elect State Supreme Court Justices; in others, the Governor appoints the Justices.

Step #4

Using the information you just read:

Write your State Representative and Senator.

Write a letter to the editor of your favorite daily or weekly newspaper.

Attend town hall or other civic meetings where candidates who are running for public office will speak, and ask them to state their position on the issue of tort reform.

Step #5

Become more involved in the nation’s political process:

Whatever your political party, consider becoming more active in it by volunteering, or even seeking an official position in your precinct or county organization. This would give you much more influence over candidates and their priorities.

Consider running for public office yourself. For more information, or to get involved, call CSEF’s headquarters at 1-888-JOIN-CSE.