Tort Reform

Tort Reform

A discussion about nationalized healthcare cannot take place without mentioning tort reform. In essence, the thought is ‘reducing litigation or damages’ will reduce costs to healthcare. Of course, we could assume that would translate to all industries. Everyone remembers the lawsuit against McDonalds for serving hot coffee, spilled by the consumer. The initial amount of damages awarded was almost $3 million… and was eventually settled out-of-court for $600,000.

Similarly, businesses face threats of lawsuits daily from falls in parking lots or stores, misuse of products, or frivolous acts. A rampant industry of “legal theft” has been created by the television and billboard lawyers fishing for clients who may have an ailment never before considered, but with marketing and awareness suddenly thousands can suffer from imaginary problems, become part of a class lawsuit, and make money. The real winner is the law firm making millions in fees and taking a significant portion of the award.

Movies like “Erin Brokovich” and the many John Grisham novels/films have reminded us of the sympathetic need for our ability to litigate. In these blockbuster films the destitute win against the big, bad corporation and remind us they are evil and must be punished. In other parts of the world citizens cannot sue for millions and must bear the cost of legal fees when initiating a lawsuit and the defendant’s costs - should they lose. Neither method is perfect and creates unintended consequences. Americans appear frivolous and greedy in seeking justice and other countries appear to favor the big company over the individual.

Unfortunately we all face other consequences of our system. Imagine driving your car down Flagler Avenue and having a bicycle run into you. Several weeks later you may find a television lawyer serving you with a lawsuit. Regardless of fault, your insurance company will pay, not even argue the case, as the lawyer pursues an endless income stream from legal extortion. Similarly, a professional license is jeopardized by frivolous complaints and legal fees; to defend proper decisions can cost tens of thousands. Imagine the numbers professionals in the financial industry accused of “losing money” during the collapse of 2008-2009. Of course, the likes of Bernie Madoff permanently tarnished the reputation of those exercising due diligence.

Regardless of fault, a system of arbitration to bypass the expense of discovery should be established, especially on an individual basis. Principles costs money and often settlement to find personal peace through dismissal is a better option, but a feeling of admission of guilt is created when no guilt is present. “I do not add ‘within the limits of the law’ because law is often but the tyrant’s will, and always so when it violates the rights of the individual.” – Thomas Jefferson