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Tillinghast

January 31 roundup

by Walter Olson on January 31, 2012

  • Latest of periodic Towers Watson (formerly Towers Perrin/Tillinghast) surveys: tort costs fell in 2010 excluding oil spill liability [Towers Watson]
  • “Will Newt Neuter the Courts?” [James Huffman, Defining Ideas] Obama’s high court appointees are fortunately friendlier toward civil liberties than he is [Steve Chapman]
  • Unanimous Cal Supremes: companies not legally responsible for other companies’ asbestos products used as replacement for theirs [Cal Biz Lit, Jackson, Beck, Mass Tort Prof]
  • Claim: jurors considered policy implications of verdict and you can’t have that [On Point; defense verdict in Baltimore, Maryland school-bullying case]
  • Airfare display mandate: “‘Protecting’ Consumers from the Truth About the Cost of Government” [Thom Lambert, TotM]
  • Critical assessment of AP-backed new copyright aggregator “NewsRight” [Mike Masnick] Promises not to be “Righthaven 2.0″ [Cit Media Law]
  • Restatement (Third) of Torts drafters vs. Enlightenment scientific views of causation [David Oliver in June]

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December 18 roundup

by Walter Olson on December 18, 2007

  • “Of all the body parts to Xerox!” Another round of stories on efforts to reduce liabilities from office holiday parties [ABA Journal, Above the Law, and relatedly Megan McArdle]
  • New edition of Tillinghast/Towers Perrin study on insurance costs of liability system finds they went down last year, which doesn’t happen often [2007 update, PDF]
  • Vermont student sues Burger King over indelicate object found in his sandwich; one wonders whether he’s ruled out it being a latex finger cot, sometimes used by bakery workers [AP/FoxNews.com]
  • Good discussions of “human rights commission” complaints against columnist Mark Steyn in Canada [Volokh, David Warren and again @ RCP, Dan Gardner; for a contrasting view, see Wise Law Blog]
  • Having trousered $60-odd million in fees suing Microsoft in Minnesota and Iowa antitrust cases, Zelle Hofmann now upset after judge says $4 million in fees should suffice for Wisconsin me-too action [Star-Tribune, PheistyBlog]
  • Australian rail operator will appeal order to pay $A600,000 to man who illegally jumped tracks, spat at ticket inspectors, hurt himself fleeing when detained [Herald Sun]
  • Lawyers’ fees in Kia brake class action (Oct. 29, Oct. 30) defended by judge who assails honesty of chief defense witness [Legal Intelligencer]
  • Who deserves credit for founding Facebook? Question is headed for court [02138 mag]
  • Yes, jury verdicts do sometimes bankrupt defendants, as did this $8 million class action award against a Kansas City car dealer [KC Star, KC Business Journal]
  • Dispute over Burt Neuborne’s Holocaust fees is finally over, he’ll get $3.1 million [NY Sun]
  • So long as we’re only fifty votes behind in the race for this “best general legal blog” honor, we’re going to keep nagging you to vote for Overlawyered [if you haven't already]

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I’ve long complained that the Tillinghast/Towers Perrin estimate of the cost of the tort system is a fundamental underestimate because of its lack of measurement of second-order effects.

I haven’t had a chance to analyze the PRI report in detail, but their figure of $865 billion/year (6.6% of the GNP), which includes the effect of the tort system on safety, employment, innovation, rent-seeking, and rent-avoidance, is around the right order of magnitude, though it’s a little much to expect three-digit accuracy from the estimates the study makes. (Cross-posted at Point of Law.)

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The West Virginia Trial Lawyers Association says it will file a Federal Communications Commission complaint unless radio stations yank ads from the U.S. Chamber of Commerce which compare injury lawyers to crocodiles and cite the widely circulated (but trial-lawyer-loathed) Tillinghast studies on the cost of the liability insurance system. (Jake Stump, “Trial lawyers want radio ads pulled”, Charleston Daily Mail, Apr. 6). Carolyn Elefant, Mike Cernovich and Prof. Childs comment. More watch-what-you-say-about-lawyers stories: Jan. 13, 2005, Dec. 23, 2004, and links from there.

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Litigation-driven surgery

by Ted Frank on August 24, 2005

Another cost of the litigation system not measured by the Tillinghast Towers Perrin study: pregnant women across the country are being required to undergo unnecessary C-sections so the doctors can avoid John-Edwards-style demagoguery in the event of pregnancy complications. C-sections now comprise 27.6% of pregnancies, and the cerebral palsy rate hasn’t declined at all.

Doctors and hospitals say they fear lawsuits if they allow a patient to attempt a vaginal birth after a C-section — called a VBAC — and something goes awry.

“We think the risk is more of a legal risk than a medical risk,” acknowledges Bob Wentz, CEO of California’s Oroville Hospital, which banned VBACs two years ago.

Thomas Frank asks what’s the matter with Kansas: it might be that a woman wanting to avoid a C-section has to travel 280 miles to find a hospital that will allow a VBAC. (Rita Rubin, “Battle lines drawn over C-sections”, USA Today, Aug. 23).

Newsweek, as is typical for a newsweekly, published only a terse editorial response (see previous post) to the litigation lobby’s concerted attack on its reporting. However, Stuart Taylor, Jr., the distinguished veteran journalist who (with Evan Thomas) was principal author of the feature, has kindly consented to let us reprint his more detailed point-by-point rebuttal to ATLA’s official gripe catalogue, published under the title “Spin or Facts? A Look Behind Newsweek’s Series ‘Lawsuit Hell’“. Because of the length of Taylor’s response, we’ve split it into two posts, the first responding to the first six points of ATLA’s critique and the second responding to the rest. Check out in particular, under heading #6, ATLA’s false (and remarkably brazen) assertion that the Tillinghast study’s $233 billion estimate of the cost of the liability insurance sector includes “the cost of the entire property/casualty insurance industry” and in particular the cost of hurricanes and similar damage. (It doesn’t.)

[click to continue…]

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“The U.S. tort system cost $233 billion in 2002, a $27.4 billion increase over 2001, representing the largest dollar increase in U.S. history. Current costs translate into $809 per U.S. citizen, $87 more than in 2001 and $797 more than in 1950.” So say the people at Tillinghast Towers Perrin, who’ve issued the newest update to their widely followed series of estimates of the size of the liability insurance sector of the U.S. economy. Liabilities tied to asbestos payouts jumped to $11 billion, double the level of just two years earlier, and medical malpractice, class actions and shareholder suits all exerted upward pressure on the totals. Less than 50 cents on the dollar of these costs were returned to claimants, and only 22 cents went to compensate actual economic losses, the report says. “Tort costs increased by a total of 30% in the last two years — the largest two-year increase since 1986/1987.” (“U.S. Tort Costs Climbed to Record $233 Billion in 2002, According to Tillinghast Study”, Dec. 10, executive summary (PDF).

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March 10-11 – “Burglars to be banned from suing victims”. United Kingdom: “Burglars who are injured while committing a crime are to banned from suing their victims for compensation. David Blunkett, the Home Secretary, has bowed to public pressure after the outcry over the case of Brendon Fearon, the burglar who is trying to sue Tony Martin for £15,000 after being shot while breaking into his home.” (David Bamber, Daily Telegraph, Mar. 9). (DURABLE LINK)

March 10-11 – Clear Channel = Deep Pocket. “With damage claims in the Rhode Island fire expected to run up to $1 billion, two lawyers representing victims have set their sights on a potential defendant with very deep pockets: Clear Channel Communications. The broadcasting giant owns WHJY-FM, a Providence radio station that ran ads for the Great White concert at The Station that ended moments into the first song when pyrotechnics set off by the band ignited the nation’s fourth-deadliest fire. A popular disc jockey at WHJY, Michael Gonsalves, introduced Great White and was among the 99 who died in the fire or from injuries suffered in the blaze. The two Providence lawyers, who between them represent about a dozen victims, said yesterday their expected lawsuits will almost certainly name Clear Channel as a defendant. The company, the largest operator of radio stations in the country, has assets that far outstrip those of the 14 defendants who were named in the only lawsuit filed so far.” (Jonathan Saltzman, “R.I. fire victims’ lawyers eye firm”, Boston Globe, Mar. 8). (DURABLE LINK)

March 10-11 – New Medicare drug benefit? Link it to product liability reform. “Even drugs like aspirin, which cause hundreds of deaths each year, could not meet the safety standards patients expect today,” argues Scott Gottlieb of the American Enterprise Institute. ” … But putting [older] patients on the pills they need means we need to prepare to tolerate more side effects or tolerate more lawsuits. Litigation should not be a cost of commerce when government puts itself in the business of pushing pills. … Without product liability reform, prescription drug coverage will transform into a full employment act for the lawyers, limiting development of new drugs and driving up prices for everybody.” (Scott Gottlieb, “More Drug Use Will Mean More Lawsuits,” AEI On the Issues, Mar.). (DURABLE LINK)

March 10-11 – Lawsuits vs. free speech, cont’d: jailhouse rock. Last year VH1 aired a special entitled Music Behind Bars, featuring the music of prisoners. Now the family of a West Virginia man murdered in 1994 by one of the inmate-performers is suing the network. The family’s lawyers are arguing that whether or not the network compensated the convicted killer for his performance — it says it did not — its broadcast occasioned the family emotional distress for which it should have to pay compensatory and punitive damages. (Maria Lehner, “Murder Victim’s Family Sues VH1″, Fox News, Mar. 6). (DURABLE LINK)

March 8-9 – Tobacco fees: feds indict former Texas AG. One of the biggest developments yet in the tobacco-fee saga: a federal grand jury is charging former Texas attorney general Dan Morales and his friend Marc Murr with conspiracy and mail fraud over Morales’s attempt to gain hundreds of millions of dollars in fees for Murr from the state’s tobacco settlement. More recently, Morales has suggested that he might be able to furnish information that would throw in question the fee entitlements of five politically influential trial lawyers who managed the state’s case (R. G. Ratcliffe and Clay Robison, “Former Attorney General Dan Morales indicted”, Houston Chronicle, Mar. 6; April Castro, “Ex-Attorney General Morales Indicted”, AP/Washington Post, Mar. 6; “Former Texas Attorney General Surrenders”, AP/ABC News, Mar. 7). For earlier coverage, see Jul. 15, 2002 and links from there; Jan. 10-12, 2003. (DURABLE LINK)

March 8-9 – Should have watched his step answering call of nature. Update: an appeals court in the Australian state of New South Wales has overturned the $60,000 judgment (see Mar. 5, 2002) awarded to Paul Jackson, who after a night drinking with friends walked home along a highway and “stepped over a low guard rail in order to urinate, not realising there was a drop of several metres.” The “plaintiff was not taking reasonable care for his own safety as he was obliged to do,” the justices said. (“That’s a long drop”, Sydney Morning Herald, Mar. 5; “Wee change in fortune for Wollongong man”, Aust. Broadcasting Corp., Mar. 5). (DURABLE LINK)

March 5-7 – Update: hospital rapist’s suit dismissed. Sandusky, Ohio: “A judge has dismissed the $2 million lawsuit filed by a convicted rapist who claimed the hospital where he sexually assaulted a woman was negligent because it didn’t prevent the crime, according to court records.” ((Richard Payerchin, “Ruling: Convict responsible for his own crime”, Lorain Morning Journal, Feb. 20)(see May 22-23, 2002). (DURABLE LINK)

March 5-7 – Stuart Taylor, Jr., on lead paint litigation. At his most scathing: “[O]ne group deserves a special niche in the annals of those who have perverted the legal system for personal and political gain at the expense of everyone else: the politically connected trial lawyers who have signed up Rhode Island, Chicago, San Francisco, St. Louis, and dozens of other governments, school districts, and housing authorities to sue over health hazards associated with sales of lead pigment and paint for indoor use. The last of those sales took place more than 45 years ago.” With details on the unusual “retainer agreement” with which former Rhode Island AG Sheldon Whitehouse signed over the state’s sovereign authority to two influential private law firms: “It not only guaranteed the lawyers a contingent fee of 16.67 percent of any money recovered, plus all litigation expenses; it also gave them considerable control over whom to sue, what to claim, whether to settle, and on what terms.” (Stuart Taylor Jr., “Perverting the Legal System: The Lead-Paint Rip-Off”, National Journal/The Atlantic, Feb. 19) (DURABLE LINK)

March 5-7 – Incoming link of the day. From the website of a Fort Worth, Texas cardiology practice: “We do not provide ANY email advice regarding medical issues. DO NOT contact us by email with clinical questions. The email addresses above are for business correspondence only. For some insight as to why, click here.” (DURABLE LINK)

March 5-7 – $6 million fee request knocked down to $25,000. Ouch! An appeals court in El Paso has upheld a trial judge’s decision to “award a group of plaintiffs’ lawyers $25,000 in attorney fees instead of the nearly $6 million they sought under a contingent-fee contract.” However, the attorneys, led by brothers Stephen F. Malouf and E. Wayne Malouf, are unlikely to go hungry; they’ve apparently obtained upwards of $2 million in fees from other aspects of the case, a complex litigation over oil rights. (Brenda Sapino Jeffreys, “Appeals Court Says Trial Judge Had Discretion to Reduce Fees”, Texas Lawyer, Feb. 26). (DURABLE LINK)

March 4 – “The Tort Tax”. “According to a new study by Tillinghast-Towers Perrin, the total cost of the U.S. tort system reached $205.4 billion in 2001, an increase of 14.3% over the previous year — far faster than the rate of economic growth. This is like a tax of 2% on everything in the American economy that takes $721 per year out of the pockets of every citizen.” Also cites a certain “excellent website that, unfortunately, I find too depressing to read regularly”. (Bruce Bartlett, syndicated/National Review Online, Mar. 3). (DURABLE LINK)

March 4 – Thrill of the chase. NYC: “A half-dozen personal-injury lawyers were charged [last week] in a scam that allowed a network of corrupt hospital employees to do the ambulance-chasing for them, authorities said. In at least three hospitals — Elmhurst, New York Presbyterian and Lincoln — emergency-room workers sold the attorneys confidential medical records of car-accident victims, evaluating the sales potential of the information as doctors were evaluating the patients for treatments, authorities said. Officials were clued in on the scheme — which ran for seven years — by a hospital employee after patients began complaining about calls at home from strangers who knew a lot about their medical conditions, according to Manhattan District Attorney Robert Morgenthau.” (Tom Perrotta, “Personal Injury Lawyers Indicted for Soliciting Scam”, New York Law Journal, Feb. 27; Laura Italiano, “Lawyers Charged in Hosp. E.R. Scam”, New York Post, Feb. 27). (DURABLE LINK)

March 4 – “Edwards doesn’t tell whole story”. In stump speeches since the outset of his political career, Sen. John Edwards has invoked the case of little Ethan Bedrick, a cerebral palsy victim, as emblematic of “the kids and families I’ve fought for.” One reporter was curious to learn more about Bedrick’s case, but Edwards’s campaign press secretary “told me if I wanted to know any details, I should ‘look it up.”’ So she did. It turns out Edwards’ firm obtained a settlement, often described as being for $5 million, of a lawsuit charging that asphyxiation during delivery caused Ethan’s disability. Edwards’s speech picks up the story only later, when Ethan’s family battled a health insurer to obtain needed therapy (Lynn Sweet, Chicago Sun-Times, Feb. 27) (& see letter to the editor, Mar. 31). (DURABLE LINK)

March 3 – By reader acclaim: “Man who threw dog into traffic sues dog’s former owner”. “A man who threw a dog to its death in a fit of road rage is suing the dog’s former owner and a newspaper, alleging mental anguish and seeking more than $1 million in damages. … [Andrew] Burnett was sentenced in July 2001 to three years in jail in the death of Leo, a bichon frise whose owner tapped Burnett’s bumper in rainy-day traffic in February 2000 near the San Jose Airport. Burnett threw the little dog into traffic before driving off.” (AP/San Francisco Chronicle, Feb. 28; Dan Reed, “Leo the dog’s killer claims mental anguish in suit”, San Jose Mercury News, Feb. 28). (DURABLE LINK)

March 3 – Update: Lockyer sues complaint mill. Following a continuing furor in California (see Jan. 15-16) about entrepreneurial lawyers’ practice of filing assembly-line complaints against thousands of small businesses, which then are informed that they must pay thousands of dollars to get the charges dropped, state Attorney General Bill Lockyer has announced that he is suing the most-publicized such law firm, Trevor Law Group, under the same unfair-business-practices law that it employs in its complaints. “Trevor Law Group operates a shakedown operation designed to extract attorneys’ fees from law-abiding small businesses,” Lockyer said. “They’ve abused one of the state’s most important consumer protection statutes and dishonored attorneys who practice law in the public interest. There’s some delicious irony in turning the weapon around and using it on them.” (Monte Morin, “State Accuses Law Firm of Extortion”, Los Angeles Times, Feb. 27; Dan Walters, “In ironic twist, law firm finds itself on other end of suit”, Sacramento Bee, Mar. 3). See also Jessica V. Brice, “Wave of lawsuits threatens 70-year-old consumer law”, AP/Sacramento Bee, Jan. 21). (DURABLE LINK)