Bush: "Frivolous lawsuits" hurt business

[Brown]

From Yahoo and AP:

"The costs of frivolous lawsuits in some cases make it prohibitively expensive for a small business to stay in business or for a doctor to practice medicine, in which case it means the health care costs of a job provider or job creator is escalating," Bush said.

Bush spoke at a two-day White House economic conference, reiterating his oft-stated plea for Congress to impose caps on legal awards.

This is just more Bush bull****.

There already is a law against frivolous lawsuits brought in federal court, and it protects businesses and doctors. For that matter, it protects everyone from suits that are without merit in fact or law.

There are also laws in place to protect defendants from extreme jury awards. A judge who has heard the evidence in the case and is familiar with its merits can disallow or scale down a jury award when the judge determines that the award is based upon emotion or prejudice, rather than the evidence.

When little Bush asks for caps on jury awards, he is not curbing frivolous lawsuits. Instead, he is limiting recovery in meritorious lawsuits. The ones who would be hurt by such a law are the people who were most seriously hurt, and the ones who would benefit the most from such a law are the wrongdoers who do the most harm.

"Justice ought to be fair," the president said. "Those who have been hurt ought to have their day in court. But a judicial system run amok is one that makes it really hard for small businesses to stay in business."

To hear this from the President of the United States--who ought to know better--is really discouraging. The extreme value of jury awards in some places IS a problem, but the solution is NOT to to limit recovery for all claimants without regard to the evidence or the individual circumstances of their cases, and say that all big-damage cases are "frivolous."

What can be done? First, limit punitive damage awards. Second, make class action lawsuits for damages MUCH more difficult to bring. Third, liability based upon scientific or technical grounds beyond the knowledge of lay people should be reviewed by a court-appointed expert. Fourth, allow regulated companies the opportunity to defend themselves based upon compulsory regulation. (The bill pending in Congress, when I last checked, would make this a complete defense, but only for drug companies. Bad approach.) Fifth, scale back indemnity rights in work-related injury cases. Sixth, don't dole out sweetheart protections to big contributors; don't make others pay for their wrongs.

Chances are that we won't hear little Bush pushing other approaches, probably because he he simply doesn't understand the subject matter.

 

[Bentspoon]

John Edwards said it

With regard to tort reform. I have been harping for years on the lawyers responsibility for frivolous law suits. I had lost hope that anyone in politics would think that way since they are all or are all beholding to lawyers. I never heard any politician bring up the responsibility of lawyers themselves until the VP debates and John Edwards, of all people, made the statement.

I think you are right about Bush in that he is interested in saving small businesses, ethical or not, as opposed to real justice reform

Bentspoon

 

[Ed]

The advice, often, is "settle".

 

[Dorian Gray]

Someone needs to tell Bush that he can stop campaigning.

 

[davefoc]

Brown, I assume you are talking about federal lawsuits.

California businesses before the passage of proposition 64 were absolutely being subjected to shake down tactics by lawyers. It remains to be seen if the measure will be upheld for all claims or just claims based on incidents subsequent to the passage of the measure.

There remains considerable abuse of the worker's comp system in California. I assume that you didn't mean that this problem had been solved either by the existing law that you referred to against frivoulous law suits.

Could you provide a little more detail about the specifics of this law against friviouls law suits and exactly what kinds of cases it applies to?

 

[shuize]

davefoc, my thoughts as well.

Most "tort law" is state law, no? I mean, how many slip and fall cases go to federal court?

 

[WildCat]

The advice, often, is "settle".

Yes, and in secret settlements after considerable public expense and time in the courts. There should be no secret settlements once a case is filed.

 

[Leif Roar]

How on earth does caps on legal awards help to protect small buisnesses? Not only does small buisnesses have proportionally less money than large buisnesses, but they also tend to have a higher percentage of their valuables tied up in hard-to-liquidate resources such as inventory or machinery. Either the cap is set so high that small buisnesses will still buckle under the cost of the legal award, or they're set so low that large buisnesses can ignore them completely.

 

[Bob Klase]

What can be done? First, limit punitive damage awards.

Why should the person(s) suing get the punitive damage awards anyway. They should certainly get actual damages, their legal bills, pain and suffereing awards, etc. But giving them the millions in punitive damages makes no sense- when the government gives someone a punitive fine for speeding does that money goes to other drivers he endangered?

Punitive damamges should be put into a fund to pay for specific things (maybe health care for people who can't get it). Of course the problem then would be the same as the money the governernment got from the big tobacco suits a few years ago- supposed to pay for only certainly things but once the politicians got their hands on it, it was just another windfall for them spend on pork.

 

[Brown]

Brown, I assume you are talking about federal lawsuits.

California businesses before the passage of proposition 64 were absolutely being subjected to shake down tactics by lawyers. It remains to be seen if the measure will be upheld for all claims or just claims based on incidents subsequent to the passage of the measure.

There remains considerable abuse of the worker's comp system in California. I assume that you didn't mean that this problem had been solved either by the existing law that you referred to against frivoulous law suits.

Could you provide a little more detail about the specifics of this law against friviouls law suits and exactly what kinds of cases it applies to?

Sure. Federal Rule of Civil Procedure 11 prohibits frivoulous lawsuits and frivolous activities (such as motions to the court), and provides for stern penalties against parties and lawyers that bring them. A lawsuit or activity is is "frivolous" if it is unsupported by fact and law, or is brought for an improper purpose, such as to harrass or delay. There are other federal rules that pertain to other abusive practices. Federal Rule of Civil Procedure 37, for example, includes penalties for discovery abuse.

Contrary to what the uniformed leader of the free world said, the federal courts are not running amok. On the contrary, federal courts generally do enforce their rules.

Many (if not most) states have comparable rules prohibiting frivolous actions, and they enforce them.

There is no question that in some places, lawyers "shake down" people (I do not use the term "shake down" in a strictly criminal sense) with disturbing frequency. In such places, it is up to the state's highest court to investigate the conduct and discipline those involved, when warranted.

One way to reduce this sort of activity is to create bigger hurdles for class action lawsuits for damages.

California's Proposition 64, as I understand it, limited private enforcement of governmental regulations. Private enforcement of governmental laws and regulations is generally allowed in many jurisdictions (including federal laws), but there ordinarily must be a specific statutory empowerment before there can be private enforcement.

Workers Compensation abuse may be a problem in some jurisdictions, but once again, this is a state concern. Typically a state administrative agency is empowered to prevent abuse.

In the tort system, workers compensation sometimes creates odd results. A surprising number of serious injuries occur "on the job," and therefore are covered by workers compensation insurance. The injured employee is entitled to compensation without any showing of fault on the part of the employer. The employee can also sue others (such as the manufacturer of the equipment he was using when he got hurt) for damages. Unfortunately, in those proceedings, the fault of the employer (which may be considerable) is irrelevant, and the employer may even be compensated from the jury award even though the employer was almost entirely at fault. In other words, there are many situations in which some businesses who bear little fault end up paying for the sins of others who were much more at fault.

 

[Brown]

Why should the person(s) suing get the punitive damage awards anyway. They should certainly get actual damages, their legal bills, pain and suffereing awards, etc. But giving them the millions in punitive damages makes no sense- when the government gives someone a punitive fine for speeding does that money goes to other drivers he endangered?

Punitive damamges should be put into a fund to pay for specific things (maybe health care for people who can't get it). Of course the problem then would be the same as the money the governernment got from the big tobacco suits a few years ago- supposed to pay for only certainly things but once the politicians got their hands on it, it was just another windfall for them spend on pork.

In some states, the bulk of a punitive damage award goes to the state, not to the party (although the party typically does collect a percentage). There can be an exception to this rule, however. In some cases, the punishable conduct of the wrongdoer is directed specifically at the party bringing the suit (e.g., when your neighbor deliberately defames you), and in such cases, the entire punitive award can be given to the party.

 

[Thanz]

What can be done? First, limit punitive damage awards.

Yes, and also make them much harder to get in all cases. If a company is simply negligent, they should not be paying punitives.

Second, make class action lawsuits for damages MUCH more difficult to bring.

This is a big problem. If you look at class action settlements, the plaintiff's lawyers are the ones who get the big bucks. The defendant company pays a huge amount, the lawyers get a big cut, and each class memeber gets very little.

Third, liability based upon scientific or technical grounds beyond the knowledge of lay people should be reviewed by a court-appointed expert.

Why? What is wrong with each side presenting their expert's opinion? How does the Court appoint an expert? How do you ensure the court appointed expert is impartial? I see a real problem with deferral to these court appointed experts.

Fourth, allow regulated companies the opportunity to defend themselves based upon compulsory regulation. (The bill pending in Congress, when I last checked, would make this a complete defense, but only for drug companies. Bad approach.)

Well, I think that compliance with regulations is always relevant to a defence. It is just evidence though, not a complete defence. You cannot expect a regulation to cover all instances.

Fifth, scale back indemnity rights in work-related injury cases.

No comment, not sure what you are talking about here.

Sixth, don't dole out sweetheart protections to big contributors; don't make others pay for their wrongs.

This should be common sense. Unfortunately, it is not how the world works.

I have a couple other suggestions, one of which is much tougher than the other. First, institute a "loser pays" system for costs of an action. You sue somebody, you lose, you pay some of their lawyer's costs. Here in Ontario we have such a system and some rules that are designed to encourage early settlement, using costs as the stick.

Second, get universal health care. The biggest problem with the tort system in the states is the lack of health care. Somebody gets hurt, has no insurance, gets big hospital bills, and needs to find some way to pay them. There is no shortage of lawyers willing to take on such cases on a contigency basis, and the lawsuits have proliferated - leading to the state you are in now. Big awards, suing anyone with deep pockets, lots of punitives. Universal health care takes away a lot of the real need for the lawsuits to begin with. I fear it may be too late to put the genie back in the bottle, however.

 

[Thanz]

Yes, and in secret settlements after considerable public expense and time in the courts. There should be no secret settlements once a case is filed.

Terrible idea. Just terrible. If you force all settlements to be public, you remove one of the big incentives to settle.

 

[pgwenthold]

Re: Re: Bush: "Frivolous lawsuits" hurt business

Why? What is wrong with each side presenting their expert's opinion?

Because it gives the impression that the matter is 50/50. Suppose it is a matter where the scientific community is set 99/1. Is the jury going to necessary understand that the plaintiff's "expert" is in a marked minority in their views? Kent Hovind could take the stand and spew his nonsense passing it off as science. Can a non-scientifically literate jury really judge the quality of the testimony?

How does the Court appoint an expert? How do you ensure the court appointed expert is impartial?

The court choses them based on their general scientific expertise, and not based on their knowledge of a specific case. In the case where they can admit they are unqualified, you consider their advice on who are the top scientists to testify, again with the direction that those scientists are chosen for their scientific advice, and not to testify for either side.

 

[pgwenthold]

Terrible idea. Just terrible. If you force all settlements to be public, you remove one of the big incentives to settle.

I think that is intentional. That means that plaintiffs will lose more often.

It increases the probably of getting absolutely 0 (and then costing). If you have a system where the chance of winning it all is 25%, the chance of getting a lesser settlement is 70%, and the chance of losing is 5%, the risk is small. But if the options are winning it all is 60% and losing is 40%, it is going to mean you are going to be less likely to file. Shoot, depending on the size of the award, I think many people would want at least an 80% of winning before trying it.

 

[Thanz]

Re: Re: Re: Bush: "Frivolous lawsuits" hurt business

Because it gives the impression that the matter is 50/50. Suppose it is a matter where the scientific community is set 99/1. Is the jury going to necessary understand that the plaintiff's "expert" is in a marked minority in their views? Kent Hovind could take the stand and spew his nonsense passing it off as science. Can a non-scientifically literate jury really judge the quality of the testimony?

I disagree that it gives the impression that it is 50/50. Further, while I admit I do not know all of the expert evidence rules in the US, I would be shocked if the weight of scientific opinion is as skewed as you suggest that the 1% would even be heard. The "expert" would simply not be allowed to testify.

The court choses them based on their general scientific expertise, and not based on their knowledge of a specific case. In the case where they can admit they are unqualified, you consider their advice on who are the top scientists to testify, again with the direction that those scientists are chosen for their scientific advice, and not to testify for either side.

Some kind of wandering science advisor? I see that as problematic as well. Too much reliance would be placed on this "expert", who could quite often usurp the function of the jury.

 

[Brown]

Re: Re: Bush: "Frivolous lawsuits" hurt business

Yes, and also make them much harder to get in all cases. If a company is simply negligent, they should not be paying punitives.

In the USA, mere negligence does not subject a defendant to punitive damges. In general, punitive damages are awardable when the defendant's conduct is intentionally wrongful or shows a reckless disregard to the health and safety of others.

This is a big problem. If you look at class action settlements, the plaintiff's lawyers are the ones who get the big bucks. The defendant company pays a huge amount, the lawyers get a big cut, and each class memeber gets very little.

As I've said before, class actions for damages tend to benefit everyone except the people that they are supposed to benefit, namely, the members of the class. Class actions for things other than damages (such as an injuction or to force an officer to do his duty) do not suffer from as much abuse as class actions for damages.

Why? What is wrong with each side presenting their expert's opinion? How does the Court appoint an expert? How do you ensure the court appointed expert is impartial? I see a real problem with deferral to these court appointed experts.

Sometimes a judge and jury are not knowledgable enough to understand some scientific or technical issues. Jurors that can't understand the issues pertaining to liability should not be entitled to decide liability based upon other factors, such as likeability of the expert or his credentials or how badly the plaintiff is hurt. In many jurisdictions, the judge has the option of selecting an independent expert to advise the judge about scientific or technical matters. This option should be exercised more often.

Well, I think that compliance with regulations is always relevant to a defence. It is just evidence though, not a complete defence. You cannot expect a regulation to cover all instances.

Basically, regulations are relevant to a defense in, say, a product liability case, but they are not a complete defense. The thinking is that regulations set a minimum level of conduct, not a maximum, so a company should not be immune from liability merely by adhering to the minimum standard. Unfortunately, some industries and companies are heavily regulated, and sometimes regulations don't just specify minimums.

No comment, not sure what you are talking about here.

I discussed this a little bit in a later post. Some laws allow employers who are largely at fault to be compensated by others who are far less at fault.

This should be common sense. Unfortunately, it is not how the world works.

Basically, the idea is not to grant legal favoritism to a group, merely because they are big contributors, and make everybody play by the same rules. You're right, it's probably unrealistic to expect this, especially with little Bush in the White House. His "administrations" as president and as governor of Texas were rife with favoritism and cronyism. Making everybody play by the same rules is not one of his "moral values."

I have a couple other suggestions, one of which is much tougher than the other. First, institute a "loser pays" system for costs of an action. You sue somebody, you lose, you pay some of their lawyer's costs. Here in Ontario we have such a system and some rules that are designed to encourage early settlement, using costs as the stick.

Second, get universal health care. The biggest problem with the tort system in the states is the lack of health care. Somebody gets hurt, has no insurance, gets big hospital bills, and needs to find some way to pay them. There is no shortage of lawyers willing to take on such cases on a contigency basis, and the lawsuits have proliferated - leading to the state you are in now. Big awards, suing anyone with deep pockets, lots of punitives. Universal health care takes away a lot of the real need for the lawsuits to begin with. I fear it may be too late to put the genie back in the bottle, however.

Both of these ideas have been recently proposed in the USA, and the response has been loud and negative.

When former vice president Dan Quayle proposed the "loser pays" rule to the American Bar Association on 13 August 1991, the lawyers (which included plaintiffs' lawyers and defense lawyers) almost lynched him. The feeling in the USA is that the "loser pays" rule: (1) would be unfair to people who can and can barely afford to litigate [the "theoretical" reason]; and (2) would cause Courts to waste their time determining whether an attorney's fees are "reasonable" [the "real" reason].

 

[WildCat]

I think that is intentional. That means that plaintiffs will lose more often.

It increases the probably of getting absolutely 0 (and then costing). If you have a system where the chance of winning it all is 25%, the chance of getting a lesser settlement is 70%, and the chance of losing is 5%, the risk is small. But if the options are winning it all is 60% and losing is 40%, it is going to mean you are going to be less likely to file. Shoot, depending on the size of the award, I think many people would want at least an 80% of winning before trying it.

that's a good part of it. The other is that a civil suit can take years to actually get to trial, and ties up the court system for many hours at great expense to the public. The public should have a right to see the result of a suit that costs the taxpayers lots of money, only to have a secret settlement in the 11th hour.

Another reason is that it gives defendants incentive to fight the suit, as many are settled just to avoid a public record (such as malpractice suits), and "no wrongdoing is admitted". Maybe the doctor did do wrong, but his patients never will know if it is secretly settled.

 

[Brown]

that's a good part of it. The other is that a civil suit can take years to actually get to trial, and ties up the court system for many hours at great expense to the public. The public should have a right to see the result of a suit that costs the taxpayers lots of money, only to have a secret settlement in the 11th hour.

Some states (such as Iowa) have rules that address these concerns. All civil cases are supposed to go to trial within a period of time (about eighteen months, if I remember right) or the case is at risk of automatic dismissal at the end of the calendar year. Continuances can be granted, but the plaintiff has to make a showing that s/he has tried to move the case to trial.

Iowa also penalizes 11th hour settlements. The parties can still settle, but they have to pay a substantial fee to the state.

 

[Rob Lister]

Someone needs to tell Bush that he can stop campaigning.

Get a clue. It isn't campaign rhetoric. He's been after tort reform for the better part of his term (at least the last three years). He's never had the votes to pass anything. Now, thanks to the democrat's silliness in the last election, he just might have the votes now.

Well it help? It depends on how its done. I'm mostly for it.