0

SHOULD WE SHARE IN TORT REFORMERS’ PRIDE FOR THEIR CORPORATE IMMUNITY LAWS?

If you appreciate your constitutional rights, the answer is a resounding “No!”. Tort reform organizations like ATRA have successfully changed tort laws and tort related laws to shield and protect wrongdoers. The reformed laws and the implications of these reforms is that they created a corporate immunity not well understood by these organizations™ supporters. They only understand what they have been told. The comparison below will provide a glimpse into the propaganda and the real effect of tort reform. Tort reform’s real attack is on trial lawyers and their ability to make political contributions to democratic candidates. The casualties of this war as with any war – are the innocent victims who only seek compensation for their injuries and damages.

LAW ATTACKED

ATRA PROPAGANDA[1]

EXPLANATION OF AFFECT OF REFORM

JOINT AND SEVERAL LIABILITYATRA supports replacing the rule of joint and several liability with the rule of proportionate liability. In a proportionate liability system, each co-defendant is proportionally liable for the plaintiff’s harm. For example, a co-defendant that is found by a jury to be 20% responsible for a plaintiff’s injury would be required to pay no more than 20% of the entire Settlement. More moderate reforms that ATRA supports include: (1) barring the application of joint and several liability to recover non-economic damages; and (2) barring the application of joint and several liability to recover from codefendants found to be responsible for less than a certain percentage (such as 25%) of the plaintiff’s harm. 

 

Joint and several liability is a theory of recovery that permits the plaintiff to recover damages from multiple defendants collectively, or from each defendant individually. In a state that follows the rule of joint and several liability, if a plaintiff sues three defendants, two of whom are 95 percent responsible for the defendant’s injuries, but are also bankrupt, the plaintiff may recover 100 percent of her damages from the solvent defendant that is 5 percent responsible for her injuries. 

As with the violation of a criminal law, if the people hold up a store and one of them murders the clerk, all are responsible for the murder.

If 3 companies are involved in the act or circumstances that kill someone, why should one of the civil murderers escape from full liability?

The argument that holding all accountable in a civil case as is done in a criminal case imposes a hardship on all of the co-defendants because they perceive that are required to pay damages beyond their proportion of fault is senseless.

Thirty nine states have modified the rule of joint and several liability.

THE COLLATERAL SOURCE RULEThe collateral source rule of the common law says that evidence may not be admitted at trial to show that plaintiffs’ losses have been compensated from other sources, such as plaintiffs’ insurance, or worker compensation. As a result, for example, 35% of total payments to medical malpractice claimants are for expenses already paid from other sources. 

 

The collateral source rule of the common law says that evidence may not be admitted at trial to show that plaintiffs’ losses have been compensated from other sources, such as plaintiffs’™ insurance, or worker compensation. The real effect of this harshly unfair rule is this: 

  1. if the dollar amount of medical care an innocent victim receives has a direct relationship to the amount of compensation that innocent victim can receive, and
  2. if the dollar amount of medical care incurred by an innocent victim for his medical care related to the incident is $20,000, and
  3. if the innocent victim’s insurance or other sources paid $15,000 of those medical bills, then
  4. the innocent victim can only use the remaining, unpaid $5,000 as a compensation measurement of the severity of his injuries, then
  5. the amount of compensation that the innocent victim can receive is drastically reduced and is not representative of the full extent and severity of his injuries and will not fully compensate the innocent victim.

Twenty-four states have modified or abolished the collateral source rule. Two states have had reforms struck down as unconstitutional and have not enacted additional reforms.

PUNITIVE DAMAGESPunitive damages are awarded not to compensate a plaintiff, but to punish a defendant for intentional or malicious misconduct and to deter similar future misconduct. While punitive damages awards are infrequent, their frequency and size have grown greatly in recent years. More importantly, they are routinely asked for today in civil lawsuits. The difficulty of predicting whether punitive damages will be awarded by a jury in any particular case, and the marked trend toward astronomically large amounts when they are awarded, have seriously distorted settlement and litigation processes and have led to wildly inconsistent outcomes in similar cases. ATRA recommends four reforms: 

Establishing a liability trigger that reflects the intentional tort origins and quasi-criminal nature of punitive damages awards – actual malice.

Requiring clear and convincing evidence to establish punitive damages liability.

Requiring proportionality in punitive damages so that the punishment fits the offense.

Enacting federal legislation to address the special problem of multiple punitive damages awards; This would protect against unfair overkill, guard against possible due process violations, and help preserve the ability of future claimants to recover basic out-of-pocket expenses and damages for their pain and suffering.

Punitive damages are awarded to compensate a plaintiff and in doing so, are designed to punish a wrongdoer and deter similar future misconduct. Punitive damages awards have become harder to obtain from juries and their size has greatly decreased because of tort reform propaganda and efforts. Where they were are routinely asked for in civil lawsuits, such is not the case today. Whether punitive damages will be received by any innocent victim first depends on whether the presiding judge will allow an evidence to support such an award, and then whether the damages will be awarded by a jury in any particular case, and then whether the judge will honor the jury’s decision if the jury does award punitive damages. Without the threat of punitive damages, wrongdoers are not deterred from similar future misconduct. 

Thirty-three states have reformed punitive damages laws. One state had reforms struck down as unconstitutional and has not enacted additional reforms.

NONECONOMIC DAMAGESATRA believes that the broad and basically unguided discretion given juries in awarding damages for noneconomic loss is the single greatest contributor to the inequities and inefficiencies of the tort liability system. It is a difficult issue to address objectively because of the emotions involved in cases of serious injury and because of the financial interests of plaintiffs’ lawyers.Noneconomic damages are damage awards for pain and suffering, emotional distress, loss of consortium or companionship, and other intangible injuries. They are called œnoneconomic because they do not involve direct economic loss. Noneconomic have no precise value, and their value is left up to the jury to determine based on the facts of the injuries involved. A jury’s award of noneconomic damages is based on the evidence, and it the wrongdoer believes the award was excessive, it should look closely at the injuries it caused the innocent victim. 

Juries should have broad discretion in awarding damages for noneconomic losses as long as the evidence shows that the innocent victim suffered pain and suffering, emotional distress, loss of consortium or companionship, and other intangible injuries.

Twenty-three states have modified the rules for awarding noneconomic damages. Four states have had reforms struck down as unconstitutional and have not enacted additional reforms.

PREJUDGMENT INTERESTIn the absence of an applicable statute or rule, the courts generally applied the traditional common law rule that prejudgment interest was not available in tort actions since the claim for damages was unliquidated. In an effort to compensate tort plaintiffs for the often-considerable lag between the event giving rise to the cause of action, or filing of the lawsuit, and the actual payment of the damages, many state legislatures have enacted laws that provide for or allow prejudgment interest in particular tort actions or under particular circumstances. In addition to seeking to compensate the plaintiff fully for losses incurred, the goal of such statutes is to encourage early settlements and to reduce delay in the disposition of cases, thereby lessening congestion in the courts. Although well-intended, the practical effects of prejudgment interest statutes can be inequitable and counter-productive. Prejudgment interest laws can, for example, result in over-compensation, hold a defendant financially responsible for delay it may not have caused, and impede settlement. 

At a time when policymakers are attempting to lower the cost of the liability system in an equitable and just manner, prejudgment interest laws that currently exist and new proposals should be reviewed to ensure that they are structured fairly and in a way designed to foster settlement. At a minimum, the interest rate should reflect prevailing interest rates by being indexed to the treasury bill rate at the time the claim was filed and an offer of judgment provision should be included.

Every single American citizen, corporations and business entity expects to receive interest on its money. They expect to receive interest on the money they have a right to while they are waiting to receive it. It should be no different for compensation for personal injuries: Innocent victims should be able to expect to receive interest on the money they have a right to while they are waiting to receive it whether prior to or after a jury verdict and judgment and until paid in full. 

Neither pre or post judgment interest results in over-compensation. If the defendant had fairly and promptly evaluated and paid the innocent victim’s claims against it, there would be not necessitating the payment of interest on that money to the innocent victim.

When the wrongdoers stop expecting and receiving interest on the money they have a right to while they are waiting to receive it, then so shall their innocent victims on the wrongdoer’s compensation to them for their personal injuries.

Eighteen states have enacted prejudgment interest reforms.

PRODUCT LIABILITYProduct liability law is meant to compensate persons injured by defective products and to deter manufacturers from marketing such products. It fails, however, when it does not send clear signals to manufacturers about how to avoid liability or holds manufacturers liable for failure to adopt a certain design or warning even if the manufacturers neither know, nor could have anticipated, the risk.Product liability law is meant to compensate persons injured by defective products and to deter manufacturers from marketing such products. It is the only action that sends any signal to manufacturers about how to avoid liability and to change its behavior and adopt certain designs, warnings or marketing practices that will prevent the risk of these injuries. Manufacturers know when their designs, warnings or marketing practices pose the risk of injury to their consumers. 

Twenty states have enacted laws specifically to address product liability. Three states have had reforms struck down as unconstitutional and have not enacted additional reforms.

CLASS ACTION REFORMOnce considered a tool of judicial economy that aggregated many cases with similar facts, or similar complaints into a single action, class actions are now often considered a means of defendant extortion. Today, some class actions are meritless cases in which thousands, or millions, of plaintiffs are granted class status, sometimes without even notifying the defendant. In many of these cases, the victimized consumers often receive pennies, or nearly-worthless coupons, while plaintiffs’ counsel receives millions in legal fees. State class action reform can more equitably balance the interests of plaintiffs and the defendant.Class Actions serve as a tool of judicial economy because they bring the claims of all similarly situated innocent victims in one suit. The claim that Class Actions are a means of defendant extortion are nonsense, and the courts do not support that claim. The courts prefer the aggregation of claims into Class Actions to minimize the costs of litigation, unclog the courts’ case loads, and move the claims through the court system efficiently and economically. Contrary to ATRA and tort reform propaganda, meritless law suits are not filed. 

Eleven states have reformed their laws pertaining to class actions

ATTORNEY RETENTION SUNSHINEIn state recoupment litigation against the tobacco industry, most states retained plaintiffs personal injury lawyers on a contingent fee basis to assist them with their litigation. Unfortunately, many of 

these contracts, inked without competitive bidding, and with little or no outside oversight, were rife with political favoritism, inside dealing, and in at least one case, amid the stench of corruption.

Many of these billion-dollar fees (which bore little or no relation to the value of the work performed) are being strategically reinvested into the political process, and into still more litigation. Attorney sunshine legislation requires legislative approval of most large contingent fee contracts, and reasserts the legislature’s oversight of œregulation through litigation.

In state recoupment litigation against the tobacco industry, most states retained plaintiffs personal injury lawyers on a contingent fee basis to assist them with their litigation. Unfortunately, many of 

these contracts. This was necessary because the states attorney generals did not have the economic or staffing resources to fight the most powerful and successful defendant-litigant of all time. The states™ attorneys general hired teams of the best and most well funded law firms in their respective states to take on the tobacco industry, and battle that would take years and the investment many tens of millions of dollars with no guarantee of a return.

Republican politicians fought the receipt of the contracted for attorneys’ fees because they did not want those fees to end up in the campaign war chests of democratic challengers. They sought to void contracts, yet retain the benefit of the work and investment of the attorneys who performed and invested millions of their own money under those contracts. Attorney sunshine legislation is simply a republican political dam designed to prevent the best and most well funded lawyers from doing the work the states cannot do on their own, and from receiving the full benefit of the bargain contracted for in terms of contingency fee compensation and reimbursement of expenses. It requires republican dominated legislative approval of most large contingent fee contracts, and reasserts that same republican legislature’™s oversight of regulation through litigation.

Eleven states have adopted this proposal.

APPEAL BOND REFORMAccording to Lawyer’s Weekly USA, the total amount of 1999’s top ten jury verdicts was three times higher than 1998’s level, and 12 times higher than the 1997 total. While many of these verdicts are overturned or reduced on appeal, defendants in many states are required to post an appeal bond sometimes equal to 150 percent of the verdict in question. In an era when billion-dollar verdicts are no longer uncommon, appealing an outrageous verdict can force a company or an industry into bankruptcy. Appeal bond waiver legislation limits the size of an appeal bond when a company is not liquidating its assets or attempting to flee from justice.Appeal bonds must be sufficient to protect the party that prevails in a lawsuit during the appeal of the judgment it won. Appeal Bond waiver legislation limits the size of an appeal bond and jeopardized the innocent victims ability to be fully compensated years down the road when the appeals process is exhausted by the wrongdoer. Appealing a judgment is no less than delaying justice, and reducing appeal bonds to the point where they will not cover the entire verdict and all interest is no more than allowing a wrongdoer to flee from justice. 

Thirty-nine states have adopted this proposal.

JURY SERVICE REFORMThe right to a trial by a jury of one’s peers is one most Americans support and take for granted. Recently, however, our juries are becoming less and less representative of the community. Some studies indicate that up to 20% of those summoned for jury duty do not respond and some jurisdictions have an even higher no-show rate. Occupational exemptions, flimsy hardship excuses, lack of meaningful compensation, long terms of service and inflexible scheduling results in a jury pool that makes it difficult for working Americans to serve on a jury and disproportionately excludes the perspectives of many people who understand the complexity of issues at play during trial. ATRA supports legislation to improve the jury system so that defendants and plaintiffs alike receive a fair trial. 

Eliminating occupational exemptions that give allow members of certain professions to opt-out from jury service.

Ensuring that only those who experience true hardship are excused from jury service.

Providing jurors flexibility in scheduling their service and guaranteeing potential jurors they will not spend more than one day at the courthouse unless they are selected to serve on a jury panel.

Protecting employees from any adverse action in the workplace due to their responding to a juror summons.

Establishing a lengthy trial fund, financed by a nominal court filing fee, to pay jurors who serve on long civil trials.

The right to a trial by a jury of one’s peers is one most Americans support and take for granted. Recently, juries have been tampered with and unduly influenced by tort reform propaganda. Juries are no longer the innocent victim’s peers. They have been jaded against every aspect of a civil suit, from a filed claim being presumed to be meritless and frivolous to the belief that the sustained physical and emotional injuries are nonexistent or if the exist, are overstated and exaggerated. 

The propaganda has caused many Americans summoned for jury duty to not respond and serve. Occupational exemptions, flimsy hardship excuses, lack of meaningful compensation, long terms of service and inflexible scheduling results in a jury pool that makes it difficult for working Americans to serve on a jury. Those who show and serve do so because the have a politically charged axe to grind.

Fourteen states have enacted reform.


[1] ATRA Tort Reform Record 2011. ATRA stands for American Tort Reform Association.