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Legal Reform Resources
Statistics
82 percent of teachers and 77 percent of principals say the current legal climate has created a phenomenon that could be called defensive teaching—decisions are motivated by a desire to avoid legal challenge.
77 percent of principals think that principals (other than themselves) avoid making decisions they believe are right, simply to prevent legal disputes.
85 percent of teachers say fewer laws, rules and legal mandates would improve the quality of their schools.
78 percent of teachers said students are quick to remind them that they have rights or that their parents can sue.
49 percent of teachers reported they have been accused of unfairly disciplining a student.
55 percent of teachers said that districts backing down from assertive parents causes discipline problems in the nation's schools.
"Between 1877 and 1934, more than 70% of the presidents, vice presidents, and cabinet members combined were lawyers."
"Today, government attorneys comprise about 15% of all American lawyers."
..."According to the Statistical Abstract of the
United States
... in 1980 there was one lawyer per 403 people in the
U.S.
, by 1990 that number rose to one lawyer per 340, and by the year 2000, the proportion is estimated to be one lawyer per 300 people."...
Donald E. deKieffer, Esq.
..."There were four times as many published appellate decisions concerning legal malpractice in the 1970's as during the 1960's. During the 1970's alone, there were almost as many reported legal malpractice decisions as there were in the previous history of American jurisprudence. In the 1980's, the number of reported decisions tripled over the prior decade." ...
Ronald E. Mallen and Jeffrey M. Smith
How does the Civil Justice System Affect me?
Overall Impact: The
United States
Economy
The cost of the
U.S.
tort system for 1994 was $152 billion. Over the past ten years, it has increased 125%.
Between 1930 and 1994
U.S.
tort costs have grown almost four times faster than the rate of growth of the
U.S.
economy.
The
U.S.
tort system is the most expensive in the industrialized world.
U.S.
tort costs are 2.2% of Gross Domestic Product (GDP), substantially higher than that of other developed countries studied and two and a half times the average of those studied.
The
U.S.
tort system returns less than 50 cents on the dollar and less than 25 cents for actual economic loss to claimants.
Tillinghaust-Towers Perrin. Tort Costs Trends: An International Perspective, (New York, New York, 1995)
Facts About Tort Liability And Its Impact On Consumers
Overall Impact: The
United States
Economy
The cost of the
U.S.
tort system for 2001 was $205 billion, or $721 per citizen.
U.S.
tort costs increased 14.3 percent in 2001, the highest percentage increase since 1986.
U.S.
tort costs are 2.04% of Gross Domestic Product (GDP).
The
U.S.
tort system is inefficient; it returns less than 50 cents on the dollar and less than 22 cents for actual economic loss to claimants.
Tillinghast-Towers Perrin.
U.S.
Tort Costs: 2002 Update, (
New York
,
New York
, 2002)
Productivity & Employment: Positive Changes To The Tort System:
A recent study revealed that when states pass tort reform, productivity and employment increase. These increases range from 7 or 8% for productivity to 11 and 12% for employment. If a state enacted more than one reform, increases ranged from 10 to 20% for productivity and employment.
When states pass laws that increase liability such as comparative negligence or prejudgment interest, there is a significant decrease in productivity and employment.
Campbell, Thomas J. The Causes and Effects of Liability Reform: Some Empirical Evidence. National Bureau of Economic Research, Inc. Working Paper # 4989, 1995.
Empirical Evidence in the States
Texas
: Tort Reform Spurs Economic Growth
In 1995 the Texas Legislature passed a series of bills to reform the state’s civil justice system. These bills addressed: limits on punitive damages, joint and several liability, sanctions for filing frivolous suits, limits on venue shopping and out-of-state filings, modifications to deceptive trade practices and medical malpractice reform.
According to the study, The Impact of Judicial Reforms on Economic Activity in
Texas
, the total cost of the
Texas
tort system in 2000 was $15.482 billion. Without reforms, it is estimated that the total cost would have been $25.889 billion. Of the $10.407 billion in total direct savings, approximately $2.777 billion may be attributed to improvements at the national level while $7.630 billion in savings were from reforms in
Texas
. Of the total savings, $2.542 billion went directly to benefit consumers.
The Perryman Group. The Impact of Judicial Reforms on Economic Activity in Texas
Overall Economic Impact on State’s Economy. (August 2000)
Facts to Consider: Benefits to Consumers
It is estimated that reforms enacted in 1995 resulted in savings of $2.542 billion that directly benefits consumers.
$1.796 billion in annual cost savings from reduced inflation ($216 per household)
$7.056 billion in annual total personal growth income ($862 per household)
The net result was a savings of $1,078 per year to the typical
Texas
household.
The Perryman Group. The Impact of Judicial Reforms on Economic Activity in Texas Overall Economic Impact on State’s Economy. (August 2000)
Lawsuit Industry Generates Billions
By Marguerite Higgins
The
Washington
Times
Trial lawyers raked in $40 billion last year from lawsuits, according to a report released yesterday by a
New York
think tank.
Lawsuits over issues such as asbestos, mold and medical malpractice — but not tobacco settlement payments — cost a total of $205.4 billion last year, according to the report by the Manhattan Institute, which promotes free-market economics.
The study surveyed the lawsuit industry's size, scope and reach in the
U.S.
economy, reporting that lawsuits from 1975 through 2001 had cost $2.8 trillion.
"Most Americans can point to a wacky lawsuit, but many aren't aware just how large of a big business" the industry is, said James Copland, director of the institute's Center for Legal Policy.
Attorney fees at large firms have jumped from $500 an hour to as high as $30,000 in the last decade, according to figures from global management consulting firm Tillinghast-Towers Perrin.
Plaintiffs' attorneys take home 19 percent of an average settlement, while defense attorneys net 14 percent. Plaintiffs receive 22 percent for economic losses and 24 percent for other injuries. The rest goes toward administrative costs.
The high legal fees and large settlements have turned some lawyers into overnight millionaires.
About 300 lawyers from 86 firms were projected to earn up to $30 billion total over the next 25 years from the 1998 tobacco settlement, in which four big tobacco companies agreed to pay the states $246 billion.
Those lawyers have turned their interests to other industries "with deep pockets," the report said.
Baltimore
trial lawyer Peter Angelos, who claimed $1.1 billion after representing
Maryland
in the tobacco settlement, led the movement for asbestos lawsuits. He now is suing manufacturers of cell phones for failing to warn consumers about the risks of brain tumors.
Lawyers so far have brought 600,000 asbestos lawsuits, which have bankrupted 67 companies and resulted in $54 billion in settlements. The final price tag is projected to reach $275 billion, the report said.
Congress is considering legislation to limit asbestos-related lawsuits. The plan would establish a trust fund for victims and set defined medical standards for claims.
Medical malpractice awards have risen to an average of $1 million, while insurance premiums have jumped 30 percent to 75 percent nationwide in the last two years.
While
Maryland
and
Virginia
have caps on medical malpractice lawsuits, no limits have been set in the District.
Maryland
limits pain and suffering damages this year to $620,000 per case with an increase of $15,000 per year.
Virginia
sets a total cap at $1.7 million.
Trial lawyers have expanded into new markets by targeting industries like food companies, lead-paint manufacturers, pharmaceutical companies, health care firms, toy makers and security services.
They also contribute to political campaigns, use "consumer action groups to improve their media image and seek new plaintiffs through direct mailings, the Internet and television commercials," the report said.
The lawyers argue that lawsuits are part of an individual's fundamental right to seek justice in the courts.
"This is another recycled study financed by the insurance industry and put out by organizations supported by the insurance, tobacco, chemical and other industries," said Carlton Carl, spokesman for the Association of Trial Lawyers in
America
.
The report, backed by the U.S. Chamber of Commerce and Sen. Jeff Sessions, Alabama Republican, comes as Congress has introduced a wide array of tort-reform bills.
While the Senate rejected a proposal to cap medical malpractice awards, other legislation is pending, including a bill that would keep more class-action lawsuits in the state courts and a measure prohibiting obesity-related lawsuits against the food industry.
"When we talk about a $40 billion operation that is bigger than Coca-Cola or Microsoft, we're talking about a big business that deserves the same scrutiny and regulation like any other big business," Mr. Sessions said yesterday at the Manhattan Institute's press conference in
Washington
.
Mr. Carl argued that the legislation would cause further harm to victims of fraudulent health maintenance organizations, credit-card billing practices, toxic substances and corporate accounting scandals.
"At the end of the day, that sort of legislation takes away the legal rights and says the sponsors don't trust the juries — the American people — to decide on cases," he added.
Former U.S. Attorney General Dick Thornburgh said the report highlights the need for legislation to prevent "frivolous" lawsuits from clogging the court system.
"Litigation reform won't happen overnight, but there is a growing public support to fix what has become a very broken system," he said.
When calculating the costs of the litigation, Tillinghast-Towers Perrin included insured costs and overhead, self-insured costs and medical costs. The measures did not include tobacco settlement costs, most contract and shareholder litigation costs, most punitive damages costs or indirect costs like reduced innovation or investment
Jim Cramer, the lawyer, co-host of the Kudlow & Cramer Talk Show, regularly mentions that civil litigation in America costs the economy 2% of GNP (Gross National Product) each year. In other words, the sum of goods and services produced in America is reduced by 2% because of the economic confusion, distractions, delays, and dislocations caused by the American method of handling civil litigationTwo percent (2%) does not seem like much but consider that economists believe that one percent of GNP translates into about 1.2 million jobs. So it could be said that the American civil litigation system causes about 2.5 million people to be unemployed who would otherwise have jobs. Tillinghast-Towers Perrin, an independent consulting firm, tracks the national costs of this litigation explosion by adding up the costs of damage awards, settlements and attorneys' fees. They report that in 2002, the total costs from tort litigation jumped by 13% to $233 billion. That's an astonishing 2.23 percent of our entire Gross National Product, and the costs are passed on to all consumers in the form of higher prices for goods and services. According to the Department of Treasury, this "tort tax" works out to $809 for every individual and more than $3,200 for a family of four, every year. We all pay the price, and that price is growing at double- digit rates.
Today’s most aggressive election donors by far are lawyers. As of July, law partners had donated $112 million to 2004 political candidates; by comparison, the entire oil and gas industry donated only $15 million. And wealthy lawyers now tilt strongly Democratic: 71% of their money goes to Democrats, only 29% to Republicans.
The share of America’s GNP that is devoted to litigation has tripled over 50 years. We spend two to three times more on it, in terms of percentage of GNP, as the industrial democracies. The figure for how much is spent annually on liability insurance in the U.S.—a relatively easy thing to measure—is now $721 per citizen, which comes to over $2800 per year for a family of four. So are we getting our money’s worth?
We have conducted a study that provides evidence of the ideological imbalance at elite law schools—of which we have heard no plans to rectify. We reviewed all federal campaign contributions over $200 by professors at the top 22 law schools from 1994 to 2000. During that time, close to a quarter of these law professors contributed to campaigns—a proportion far greater that the average citizen. The proof is stark: as the Anglican church was one described as the Tory Party at prayer, the legal academy today is best seen as the Democratic Party at the lectern. America splits evenly between the GOP and Democrats, but 74% of the professors contribute primarily to Democrats. Only 16% do so to Republicans.
These overall percentages substantially understate the effect of the partisan imbalance at most schools. Republican-contributing law professors are very disproportionately concentrated at two schools—the University of Virginia and Northwestern. In contrast, many other elite schools have few or no politically active Republicans. At Yale, where almost 50% of the faculty donate, almost 95% give predominantly to Democrats. At Michigan itself the ratio is eight to one. Sometimes the amounts donated can be instructive: in the last six years Georgetown law professors have donated approximately $180,000 to the Democratic Party, $2,000 to the GOP and $1,500 to the Green party. Conclusion? Mainstream conservative ideas ore no better represented than those on the leftist fringe.
John O. McGinnis, Professor of Law at Northwestern University; Matthew Schwartz, law student at Columbia University Wall Street Journal 4-1-2003 p.a14
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