Archive for December, 2003

Cost of U.S. liability sector in 2002: $233 billion

“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).

Pet-sitter sued for $160,000

At first it seemed like a feel-good story: dog is lost and found two months later, though one doubts that the “white witch” and “four psychics” the owner hired were of great help. But a day later the Portland dog owner sued the pet-sitter who lost the dog for $160,000. The lawsuit asks for, among other things, $10,000 for “the temporary loss of the special value of Fremont based on his qualities, characteristics and pedigree.” (Joseph Rose, “Owner sues pet sitter in loss of dog”, Oregonian, Dec. 6). A follow-up story indicates community outrage. (“Street beat”, Oregonian, Dec. 9).

“Insult to Injury”

In recent decades, influenced by feminist views, the law’s treatment of domestic violence has swung toward a “mandatory arrest, mandatory prosecution” model in which the full weight of criminal law is brought to bear on alleged batterers even if the victim would prefer not to press charges; reinforcing this model are mandatory-reporting laws requiring medical and other professionals to report on cases of likely battering. In Insult to Injury: Rethinking our Responses to Intimate Abuse, however, NYU social work and law professor Linda Mills argues that in practice this model often works against the interests of actual victims of domestic violence, undermining their power to improve their situations and discouraging them from seeking medical attention or other forms of assistance. Description and prologue from Princeton Univ. Press; reviews by Cathy Young (Reason), Clay Evans (Scripps Howard), Trish Oberweis (Law and Politics Book Review)(see Mar. 16 and Mar. 29, 2000; Mar. 4, 2002).

McDonald’s coffee revisited

Professor Bernstein (also here) and the “Curmudgeonly Clerk” trade thoughts on the infamous McDonald’s coffee case ($2.9 million verdict for Ms. Stella Liebeck, who spilled a 49-cent coffee on herself), with the Curmudgeonly Clerk’s comments demonstrating how thoroughly the plaintiffs’ bar has infiltrated societal thinking.

The Clerk justifies the verdict on a couple of grounds: McDonald’s had 700 previous complaints; and Ms. Liebeck suffered horrific injuries.

To say that there were 700 previous complaints of burns (ranging from scalds to real injuries) from McDonald’s coffee begs the question. After all, 700 is just the numerator. What’s the denominator? The answer is in the tens of billions. A product that hurts one in twenty-four million people is not “unreasonably dangerous”, especially when the vast majority of the 700 incidents were not the sort of grievous injuries Ms. Liebeck had. (McDonald’s had settled previous cases, but the cases were incidents where the McDonald’s employees had spilled the coffee.) However, the jury took the 1-in-24 million statistic not as evidence that McDonald’s coffee was not dangerous, but as evidence that McDonald’s cared more about statistics than people — when in fact the statistic should have been used to throw the case out.

That Ms. Liebeck was surely serious hurt doesn’t change the underlying problem with the lawsuit: Ms. Liebeck was hurt because she spilled coffee on herself. If (as all fast-food restaurants do now) McDonald’s had the obvious statement “Coffee is hot and can burn you” on the cup (a juror later complained that McDonald’s warning was too small), would that have prevented her injuries? True: McDonald’s could have served luke-warm coffee or even iced coffee. But at the end of the day, the proximate cause of Ms. Liebeck’s injuries, as awful as they were, was Ms. Liebeck.

The argument for liability is that McDonald’s chose to serve its coffee hot and should have foreseen that people would burn themselves when they spilled coffee. But, here’s a question: the reason Ms. Liebeck’s injuries were so terrible was because she was wearing a sweatsuit that absorbed the hot liquid and held it close to her skin. Surely, clothing manufacturers can foresee that people will spill hot liquids on themselves. If Ms. Liebeck’s sweatpants had been made out of Gore-Tex or some other liquid-resistant material, she never would have been hurt. What’s the principle of tort law that holds McDonald’s liable, but not the clothing manufacturer?

Read On…

SUV wars: any means to an end?

Reviewing Adam Penenberg’s newly published book Tragic Indifference: One Man’s Battle with the Auto Industry Over the Dangers of SUVs, which recounts the Firestone tire/Ford Explorer imbroglio mostly from the standpoint of plaintiff’s attorney Tab Turner, FindLaw reviewer Matt Herrington (Oct. 10) writes that the book “provides an interesting view of the interrelationships between the plaintiffs’ bar, the expert and consumer advocacy industries, and corporate America” but is “painfully, almost comically, one sided”: “anyone who helps the plaintiffs is a hero” while “anyone who raises any obstacle to their quest for justice must be evil”. The result? “Even bad behavior, if it helps the plaintiffs, is depicted as heroism. For example, Penenberg describes how two experts who make their livings as critics of the auto industry obtained a purportedly ‘suppressed’ National Highway Traffic Safety Administration study of uncertain provenance; they believe the study contradicted NHTSA’s public statements. But they got the study ‘through the mail’ — it was not an official document, it had no provenance — it was not, and here is the key point, admissible evidence. This technicality is resolved through trickery that is at least unethical, and likely illegal too. Penenberg reports that one of the experts ‘stashed the analysis in one of the [NHTSA] dockets concerning rollovers and then went off for lunch. When he returned, [he] informed a clerk he needed a certified copy of the report, and described where to find it. A couple hours later [he] got it back complete with NHTSA’s official seal and tied with a blue ribbon.’

“That’s not a cute story. Not even close. It’s a story of an ethical violation, a lie to the government, and a confidentiality breach.”

Oz reforms: no tears for laid-off lawyers

“Lawyers losing their jobs because of the NSW government’s clampdown on public liability claims have received little sympathy from Premier Bob Carr. The government’s tort law reforms have reportedly forced the closure of a whole floor of lawyers at one Sydney firm. And NSW Bar Association president Ian Harrison has warned that up to a third of barristers could lose their jobs.

“But the premier gave the lawyers short shrift, saying he would rather see money going to workers than lining legal eagles’ pockets. ‘Australia would have been put out of work if we hadn’t reformed the tort laws and reined in this culture of litigation in NSW,’ he said.” (“Lawyers get no sympathy”, AAP/Melbourne Age, Dec. 5).

“The Civil Liability (Personal Responsibility) Act and its amendments introduced caps and thresholds on compensation and shifted the balance towards greater personal responsibility to avoid long and expensive court cases. The result has been a sharp drop in casework for solicitors and barristers specialising in personal injury cases.” (Alex Mitchell, “Get over it, Carr tells jobless lawyers”, Sun Herald/Sydney Morning Herald, Dec. 7).