As I was doing my sweep through the blogs I read regularly, I saw a link over at TortsProf Blawg to the Jackpot Justice report put out by the Pacific Research Institute.
Now, I am not the smartest person in the world, and I hate math. However, in going through study, there were a few things that struck me. This report is described as a study of the cost of our system. However, as a general observation, and perhaps I missed this in the calculation, they were only concerned with the costs from the side of the perceived losers (i.e. the insurance companies and corporations).
First, one of the basic premises of the report is that the United States' system of private civil justice (also known as tort law, personal injury law, consumer rights, etc.) is inefficient because it costs too much. Now, ignoring that the cost is the one that they arrived at, they are comparing the United States' civil justice system to the justice systems found in Poland, Denmark, France, United Kingdom, Switzerland, Japan, Belgium, Spain, Germany, and Italy. Of those countries, only the United Kingdom is a common law country. Meaning that the system itself is very different.
Rather than trusting people to act as the triers of fact, a civil law system the power resides with the judges. Beyond that, civil law systems are code based systems. This means that the code is source of law, rather than allowing judges to interpret the law.
But getting back to their point. The authors of the study say that .9 of the GDP is the correct level of cost. Anything over that, and the tort system is ineffective and causes too much of a drag on society. Now, since the systems that they are comparing our system to are fundamentally different (except for England in the U.K.), how can that number be anything more than an arbitrary point of reference?
The second point that jumped out at me was data about how much an injured person recovers as a result of the civil justice system. Under their rationale, only approximately 46% of the money spent goes to paying those claiming injuries. When you consider that this number represents a percentage of all the money spent, then this is not bad. There has to be a system in place for civil justice that people will have faith in. Only a third of the money goes to the attorneys for either side (plaintiff and defense). It's as if they are saying "controversy" but then there is nothing there. If the data were to show that a plurality of the funds or a majority of the funds were going to the lawyers, then that would be a story. There has to be a cost for the system. Could the cost be lower and the recovery for the injured more, possibly yes.
Now, the third point was the contention that tort-reform actually saved lives. Now, it seems like their argument goes like this: tort litigation prevents industries from introducing new life-saving products (either safety devices, improved products, etc.) and that there has been an increase in deaths because of this. Now, this argument seems , at least to me to be counter-intuitive. The claim is based on a law review article entitled, "Tort Reform and Accidental Deaths" by Paul H. Rubin and Joanna M. Shepherd. Now I read through the article and the article looks simply at death rates versus difference types tort reform systems. It does not seem to take into account advances or the effect that litigation has had. The article seems to state that by decreasing the costs and making those costs more foreseeable, corporations and industries will become safer. Furthermore, it seems to be missing an actual link that between tort reform in states and an increase in saved lives that cannot be explained to other things, not limited to including tort cases.
PRI also talks about asbestos in particular. They use this as the example of a mass tort run amok. According the PRI report, the litigation has destroyed industries that will never be replaced. A pretty bold statement, backed up only by the sad story of Crown Cork & Seal. In the report, the PRI authors state that approximately 51,000 workers have been put out of work as a result of asbestos-related bankruptcies. Now, the report seems to assume that these people never worked again. However, there is no mention of the 10,000 people a year who die as a result of exposure to asbestos. If you take that number from 1980, when the first case I am aware made it past the Supreme Court, that makes 25 years x 10,000 = 250,000. Yet, that cost is not subtracted from the alleged cost to the United States' economy.
When it comes down to it, this report tries to cast itself as an objective, dispassionate view of the costs of our current tort system. However, the data it is using seems to only deal with the costs of the people seeking the tort-reform. For the study to be valid, it should take into account the costs paid by both sides of the equation. It should have an objective standard for the right cost to a society, not an arbitrary one which sounds nice but fails when it attempts to compare two completely different systems of justice.
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