1. Criticisms and Defenses of Civil Justice and Tort Systems
A.
Criticism
Response
Excessive damage awards – defendant’s are being “punished” instead of just compensating the victim for actual injuries suffered
· 31K median tort recovery.
· 15% of torts and contracts Ps recover > 250K
· only 5% > 1 million
· most severely injured undercompensated
· Damage caps exist in most states and State Farm
· Missing P’s.
· Remittitur role usually not reported in press
Tort damages lead to high (inefficiently high) health insurance premiums
Medical malpractice is under-litigated
Withdrawal of certain goods and services from the marketplace (OB-Gyns) – also
· medical malpractice is actually under-litigated. Only 2-10% of victims who could bring suit actually do.
Pricing goods out of the market (health insurance)
· true that some goods are more expensive because of law suits (health insurance) BUT Croley’s “law of conservation of accident costs” – costs don’t disappear, they just get reallocated (higher insurance costs)
· if jury verdict indicates actual risk of products, then particular products will be more expensive (chain saws, birth control) – it’s not a random sample of products that are affected
Lawyers get a disproportionate proportion of the damage awards
· could be argued that lawyers fees are capped by ethics rules.
Frivolous Lawsuits
· lawyers have no economic incentive
· not ethical to bring frivolous lawsuits (Rule 11)
· lawyers can face state ethics boards, sanctions, criminal liability
· Low ex ante returns; contingency fees prevent this.
Leads to an overly litigious society (people recognize as injuries things they never would have sued for before)
· part of the litigiousness is related to the fact the US has so much localized control
· 75% of MMP P’s lose.
· 52-71% of Product Liability P’s lose
· Federal tort trials decreased from 1980-2003 by 79%
· Business lawyers filed 4x the suits individual P’s lawyers file
· Largest damages award go to businesses not P’s
People with good claims have to wait longer because of bad claims
· Lawyers generally don’t take bad claims b/c of contingency fee system
If state
to finance lit.
C. Section 1983—Helps enact civil rights suits. In cases against the U.S., attorneys can recoup fees.
D. D’s make hourly fees
E. Statutory Fee-Shifting: Legislature creates cause of action and provides for payment of winner’s attorney’s fees. Usually civil rights cases. Recovery limited to ‘reasonable” fee..
F. Prisoner Litigation Reform Act. Example of lit. drying up b/c no financing. Enacted b/c lit. by prisoners took up 1/6 of all lit. in 1996. Capped fees at 150% of actual damages, but b/c prisoners win so little, no incentive for attorneys to represent.
G. Rule 23—Class Actions
1. Common fund: all members of class bare some of cost from a common fund created by representative P.
2. Spreads fees among all members of class. Not fee-shifting.
3. Class Action settlement must be approved by judge to protect class b/c they have no voice.
Rule 68—Offer of Judg
