In its Dec. 15 issue, Newsweek details some of the ways in which lawsuits for personal injuries, medical malpractice and other things have reduced the quality of life in America. Children's playgrounds have been closed and sports tournaments canceled, ministers are afraid to comfort their parishioners, coaches fearful of suits when a child is not picked for a cheerleading squad, and on and on. Major cities like New York and Chicago have been forced to cut back services to the poor because of the cost of lawsuits. In 1999, the City of New York alone paid out $418 million to settle various suits.
Of course, legitimate personal injuries deserve compensation. But, less and less of each dollar awarded in tort suits actually compensates for injury. According to the Tillighast study, only 22 cents on the dollar compensate for actual economic loss. The rest went to lawyers or involved punitive damages or those for "pain and suffering" that went far beyond compensating actual loss.
Because juries are now willing to award absurd sums, the court system has become like a lottery, encouraging sleazy lawyers and greedy plaintiffs to take advantage of it. Newsweek notes that $28 billion was awarded by a jury to a woman who blamed the tobacco companies for her smoking habit and subsequent lung cancer. An Alabama jury awarded $12 billion to the state (which was known to be suffering a budget crisis) from ExxonMobil for violating lease agreements. The magazine details other multibillion dollar awards, as well.
If it were only a matter of money, the problem might not be so bad. Judges routinely reduce such awards on appeal. But because companies still have to worry about jackpot awards, they change their behavior in ways that are often injurious to everyone. For example, it is thought that $50 billion to $100 billion is wasted each year on unnecessary medical tests that doctors order just to protect themselves from a lawsuit. Pharmaceutical companies have cut back on the manufacture of vaccines in large part due to lawsuits, leaving many unprotected.
People are not unaware of the heavy cost they pay for an out-of-control legal system. A poll earlier this year for the American Tort Reform Association found that 76 percent of Americans believe that their health costs are higher because of excessive medical liability lawsuits. By a two-to-one margin, people believe that lawsuits are hurting the economy and discouraging the creation of jobs. Yet every effort to reform the system is blocked by the trial lawyers who have gotten rich off of it. And as the biggest contributor to the Democratic Party, they have the clout to do it.
Bruce Bartlett
Bruce Bartlett is a former senior fellow with the National Center for Policy Analysis of Dallas, Texas. Bartlett is a prolific author, having published over 900 articles in national publications, and prominent magazines and published four books, including Reaganomics: Supply-Side Economics in Action.
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