Thursday, June 09, 2005

Tort Reform or Jury Elimination?

Tort reform is high on the Presidential agenda. It is also on the table in many states, unless, of course, it has already passed. All the talk about those evil trial lawyers is a smokescreen, however: what the tort reformers really want to eliminate is the civil jury system.

Think about the tort system from the perspective of a plaintiff's lawyer. The plaintiff's lawyer only gets paid if he wins, and then receives a percentage of the jury award. (This is called a contingency fee.) The lawyer puts a great deal of time into the case, and usually advances the funds to pay experts. This can quickly run into the tens of thousands of dollars, sometimes hundreds of thousands.

If the case is lost, so is that money.

Obviously, plaintiff's law is a high risk business - like drilling oil wells. You sometimes win big - and sometimes lose big.

What tort reform does is put caps on the wins, with no similar caps on the losses. So what happens? Difficult or expensive cases won't be litigated, because the downside risk will be more than the potential upside reward. Now mind you, we're not talking about frivolous cases here (good lawyers won't take frivolous cases, because they are by definition losers). We are talking about substantial cases, in which real people have been injured, often seriously, but which are so expensive to litigate that the verdicts can never cover the costs of litigation.

If Judge William G. Young, quoted in my 6/2/05 blog entry, is correct, and the jury system IS dying, tort reform is one huge nail in its coffin. By limiting the compensation a jury can give injured people for their injuries, arbitrarily, regardless of the circumstances, tort reform reduces jury power and authority in those cases that are tried, while keeping many more cases from being litigated at all.

What the tort reformers, who are by and large conservatives, fail to realize is that tort reform is socialist. We limit the individual responsibility of tortfeasors in the name of "public good," while forcing their victims to bear the costs of the injuries the tortfeasors caused, because society thinks it is too expensive to give them justice.

The ends (reducing health care costs) cannot justify these means (eviscerating individual rights and responsibilities in the civil justice system.) Nor, of course, are health care costs lower in those states with tort reform than those without.

It has been argued, by a group of law professors called "behavioralists," that juries are incapable of rendering rational punitive damage awards. Some might think it relevant that their major work, a volume called Punitive Damages: How Juries Decide was funded largely by Exxon and other corporations. Obviously, Punitive Damages certainly seems to support the corporate desire to take punitive damage awards away from juries.

A number of articles, however, have shown that the behavioralist research is logically flawed. Perhaps Temple Law School Associate Prof. David A. Hoffman's article How Relevant is Jury Rationality? does the best job of showing that the cost-benefit analysis that behavioralism uses as the sole test of jury rationality is only one of many factors juries and society must take into account.

If punitive damages are cost-efficient, they may fail to provide the degree of deterrence that juries find reasonable. Furthermore, juries may find it important to flat-out punish tortious conduct that was willful, reckless, or dishonest. It seems outrageous to take such decisions away from juries merely because a few law-and-economics types find it cost-effective to do so.

The tort reform battles have not yet exhausted themselves. It is important, however, to recognize them for what they are: a smokescreen for an attack on the jury system. And a dishonest attack, at that.


At 6:47 AM, Blogger Joshua Karstendick said...

I've never seen anyone frame it like that before.

At 8:46 AM, Blogger Joshua Karstendick said...

Crime & Federalism also has a good post on juries and tort reform: link.

At 10:42 AM, Blogger rattlerd said...

I guess I am probably a law-and-economics type - a CPA with an econ undergrad who is about to start law school - but I can appreciate what is conveyed here. Still, doesn't the legal profession have to admit to a certain level of abuse considering cases like the never-ending litigation of fen-phen and asbestos? Or at least accept that a perception of abuse is legitimate on behalf of the public when they see Texas Hammer and Strong Arm types airing TV commercials with cash register sound effects?


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