Ambulance Chasers Under Attack

Opening arguments against trial lawyers

Pity the poor trial lawyers. Efforts to limit jury awards and cut their exorbitant fees are breaking out all over the country. The New York Times reports today that bills to "limit awards for pain and suffering, reduce the amount of money that defendants must pay to appeal a decision, and apportion liability" have passed in 11 states and are pending in 20. A group called Common Good has just launched a campaign in 13 states to limit trial lawyers' take of a jury verdict in many cases to 10 percent of the first $100,000 of a settlement, and 5 percent of anything more, not the outrageous 33 to 40 percent that it is customary today. Common Good is basing its campaign on the fact that ethical rules require lawyers to charge only "reasonable fees." Seem reasonable to me.

In 1999, the top ten jury awards totaled nearly $9 billion, up from a mere $750 million in 1997. Given the current contingency fee system, the lawyers got around $3 billion of the take. More recently, the total of the top 100 jury verdicts in 2002 was 3 ½ times higher than the amount awarded in 2001.

We've all heard the stories of states denuded of obstetricians/gynecologists due to frivolous medical malpractice lawsuits. The absurd attempts to claim that gun manufacturers are responsible for the crimes committed using their products. The astronomical verdicts awarded people who damned well knew that smoking could kill them and refused to take responsibility for their actions. The lawsuits against McDonald's alleging that the company failed to warn its customers that eating too much fatty food would make them fat. And let's not forget the hilarious warning labels that decorate most consumer products nowadays including gems like the one on a composite fireplace log that reads, "Caution: risk of fire," or one on a baby stroller that warns, "Caution: remove baby before folding stroller."

When I was working as a staff writer for Forbes back in the early 1990s, I reported a story about a communications professor at the State University of New York in Buffalo who had a tremendously lucrative business designing warning labels for products. He would "scientifically" design labels that would have the greatest chance of capturing the attention of consumers. Among the warning labels he had designed were those for stepladders, tampons, and swimming pools. His research conclusively showed what we all know to be true—practically no one actually reads warning labels.

So why go to all the trouble? Well, because his most lucrative activity was testifying as an expert at product liability trials for companies who were defending themselves on the grounds that they were not liable because they had given adequate warning to consumers about the dangers posed by misuse of their products. This kind of defensive planning boosts the costs of products for us all without greatly increasing our safety. (By the way, the professor also told me there is one fact that 99 percent of Americans know for sure: Smoking is bad for you. He added that 99 percent of Americans don't even know who the current president is.)

Of course the ambulance chaser lobby is fighting back. Their chief public relations ploy is to argue that they are defenders of the little guy and that they are merely bringing the big guys of corporate America to heel. That pose would be a lot more convincing if they didn't line their pockets so richly from the jury verdicts. PR is all well and good, but like all special interests, trial lawyers are also trying to buy friends in high places; specifically they are the second largest bloc of contributors to the campaign chest of the Democratic National Committee.

Anyone negligently or intentionally injured deserves his or her day in court and just compensation. However, many Americans are now recognizing that the civil courts have become a lottery in which far too many people win much more than their cases merit. Trial lawyer avarice is at the heart of this dysfunctional system, and fortunately it looks like many states are finally taking steps to rein in their greed.

Comments

[BruceM]

As long as the trial lawyers are putting up their own funds to pay for all the pretrial and trial experts, investigation, collection and preparation of evidence, etc... and as long as they get nothing if they win then it's perfectly reasonable for them to get 33-40% of the judgment. Now, if you want to have taxpayers foot the bill to refund/subsidize the plaintiffs lawyers for their own monetary losses in preparing a case that ultimately ends with a losing judgment then I have no problem reducing the maximum fee recoverable to 10% or something smaller. If I have to shell out 5 to 10 million dollars of my own money, knowing i won't get a penny back if I win, then how is it unreasonable that I get a bigger reward with such a big risk? Correlation between risk and reward is fundamental economics.

For every multimillion dollar verdict you disagree with or think is too large, there are 100,000 wrong or unfair (too small) verdicts that you don't hear about. Plaintiff wins $1500 in toxic waste case doesn't make the front page (even if the attorney shelled out $500,000 in trial expenses).

I'm a lawyer but I don't do plaintiff's work, though I expect better from Reason, and I think all this crap is just big corporations using their clout (however much clout you think trial lawyers have it is dwarfed by corporate interests) to demonize lawyers and once again get people to vote against their own financial interests.

That being said, med-mal cases are a unique species and it should demand a higher degree of proof to bring a medical malpractice case. Just showing the doctor did something different than what the PDR says is standard should not be enough to merit a claim, let alone a judgment.