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The Facts About Civil Lawsuits and “Tort Reform”

“Frivolous lawsuits”, “litigation lottery”, “tort explosion”, “medmal crisis”.  Chances are you have heard these terms a lot over recent years.  But are they real?  All of the unbiased data and scientific studies by independent groups indicate these “crises” are not based in fact at all.  Instead, they are manufactured by the Insurance Industry and other Big Corporations for simple reasons – to save money and increase profits.

Over the last twenty years, the Insurance Industry has spent millions of dollars on a massive propaganda campaign designed to turn public opinion against injured people and consumers.  “Tort reform” is the name they use to try and deceive the public into blocking their own access to the courts.  They have also spent millions of dollars lobbying lawmakers to pass laws designed to protect Big Corporations, Insurance Companies, HMO’s, and similar entities.

Insurance Companies are happy and friendly when you are paying premiums year after year, but if you have ever tried to make a claim for a significant loss, you know first-hand how difficult it can be and what lengths they will go to avoid paying legitimate claims.  They fight all claims – even the very legitimate ones.  The media has reported that a major Insurance Company (one that claims to be a “good neighbor”) recently forged inspectors’ reports to avoid paying valid hurricane claims.  Contrary to their ad campaign, this is not how good neighbors treat one another.

Most people may not know that lawyers who represent injured people (plaintiff’s lawyers) have to be extremely selective about the cases they take or they could be out of business quickly.  Plaintiff’s lawyers work on a contingency, meaning they do not get paid a dime unless they win the case with a settlement or jury verdict.  Since most people could never afford to sue an Insurance Company or Big Corporation, the contingency fee contract is the only way they can have a chance for their day in court.

Most, if not all, defendants in civil cases have insurance and the Insurance Company is paying their lawyers to fight the case.  The Insurance Companies typically hire the biggest corporate law firms and pay the lawyers hundreds of dollars an hour, and cover all the costs, to fight the case.  However, because of Florida’s “non-joinder” law, the jury is never allowed to know the defendant has insurance, or that the Insurance Company is defending the case.  Most of the big corporate law firms that represent insurance companies have their own websites touting their services and marketing for business from other insurance companies.  This creates a real David versus Goliath scenario where the individual or consumer is up against far greater manpower and resources.

Also, plaintiff’s lawyers advance all the costs in the case and risk losing them all if they lose at trial.  Most civil cases can take 2 or 3 years, or even longer, to get to trial.  Insurance Companies know the plaintiffs’ lawyers are not getting paid and fight to delay cases as long as possible in hopes that the lawyer or the injured person will give up.  For these reasons, most, if not all, plaintiff’s lawyers have to be very careful about only taking good cases where people have very real injuries to have a realistic shot a recouping the costs and winning the case.  Lawyers who take “frivolous cases” or even marginal cases go out of business quickly for these reasons.

An analysis of the facts and figures shows that both federal and state litigation has declined drastically over the last decade. Federal tort litigation peaked in 1985 (probably due to asbestos cases) but has since declined. At the state level, tort litigation has dropped 10 percent over the last decade.  NAT’L CTR. FOR STATE COURTS, EXAMINING THE WORK OF STATE COURTS (2004), available at www.courtstatistics.org/other-pages/examining-the-work-of-state-courts.aspx (last visited May 30, 2006).

Also, damages awards have dropped significantly in state courts, by as much as 56 percent. In 2001, the last year for which numbers are available, all the state courts in the country handled just over 100 million cases. THOMAS H. COHEN & STEVEN K. SMITH, BUREAU OF JUSTICE STATISTICS, U.S. DEP’T OF JUSTICE, BULLETIN: CIVIL TRIAL CASES AND VERDICTS IN LARGE COUNTIES, 2001 (2004). Of those, only 17.1 million (or about 17%) are civil, of which 67 percent were tort claims. BUREAU OF JUSTICE STATISTICS, U.S. DEP’T OF JUSTICE, COURT AND SENTENCING STATISTICS, available at www.bjs.gov/index.cfm?ty=dcdetail&iid=242  By far, the vast majority of lawsuits are businesses suing other businesses.

According to the National Center for State Courts (NCSC), criminal trials (not civil trials) are responsible for court overcrowding.  Some courts may be clogged but the court data reveals criminal cases and business v. business litigation are the primary reasons.

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