Question: Are Americans overly litigious?
Answer: Few Americans who are injured in accidents turn to the liability system for compensation.1 One of the main reasons other countries appear to have lower litigation rates is that they “typically provide more government and first-party compensation benefits to injured accident victims, thus making resort to the litigation process both less necessary and less lucrative than it is in the United States.”2 A 1991 RAND study pointed out that in the preceding decade, other countries have experienced a greater rate of increase in the amount of litigation than the United States.3
Of the Americans who receive some compensation annually for accident related losses, “tort liability payments are mentioned by only about 10 percent of all persons receiving compensation.” This may be the case because many receive compensation from their own insurance company.4
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Question: Has litigation caused an insurance crisis in America?
Answer: The insurance industry is cyclical. A study found that the “insurance crisis” of the 1980s was largely due to the intensely competitive nature of the U.S. insurance market. This competition caused insurance rates to be comparatively lower in the U.S. from 1979 through 1983 than in other countries, and when increases occurred between 1984 and 1986, “they were all the more dramatic when compared with rate increases in other countries because they occurred against the background of artificially low rates.”5 The same cycle seems to be operating today.6
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Question: Are jurors biased against corporations?
Answer: An extensive scientific study of Delaware jurors in lawsuits against corporations found that jurors were suspicious of plaintiffs’ claims,7 and were sympathetic to business, and sensitive about the costs to society of a verdict in favor of the plaintiff.8
Another study of big business litigation in the U.S. federal courts between 1971 and 1991 found that “businesses win overwhelmingly, both as plaintiffs and defendants, against other parties. … [T]hey are certainly not ‘victims.’”9
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Question: Is it true that Americans have to pay a “tort tax” on everything they buy?
Answer: There is no such thing as a “tort tax.” Compensating someone who is injured by a negligent company is not a “tax” on other people. The cost of an injury exists regardless of who pays for it. The question really is whether someone who is injured should be the one who pays when the injury is someone else’s fault.
As Prof. Mark M. Hager of American University’s Washington College of Law said, “We could buy things more cheaply by refusing to compensate victims for injuries stemming from producing and using the goods and services. But then the low costs would represent a subsidy we enjoy at the expense of suffering victims – unless, of course, we find ourselves among the victims… Compensation payments themselves do not create additional costs. Rather, they distribute existing costs, the costs of injuries, over a wider number of people, so that the injured experience less of the cost and the rest of us, through higher prices, experience more.”10
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Question: Isn’t that increase in prices too much?
Answer: The Consumer Federation of America, an umbrella group for consumer groups, oversaw a study that found that costs for product liability insurance averaged 24 cents for each $100 of product sales from 1987 to 1996.11 And a 1995 survey of U.S. corporations’ total liability risk (not just tort liability) found the costs to be just 25.5 cents for every $100 of revenue.12
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Question: The Chamber claims that 58% of tort costs go to administration, claimants’ attorney fees and defense costs, and that injured plaintiffs get only 42% of the tort cost dollar. How can that be reasonable? top
Answer: Those are extremely misleading numbers. The 58% figure being cited includes every insurance cost, whether the cost has anything to do with lawsuits or not. The best way to control liability costs in general, of course, is to prevent them by making safe products. And the costs of lawsuits are also unnecessary if businesses compensate those who have been injured by products early on rather than requiring them to go to court.
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Question: Isn’t the problem really the contingency fee lawyer?
Answer: Contingency fees make it possible for people with limited resources, who are injured by defective products, to hold a manufacturer accountable in court. Lawyers who take cases “on contingency” get paid only if they win the case. They cannot afford to spend time and money on cases with dubious merit and they screen them out. Although most countries do not use contingency fees, the government in many of those countries provides free legal services to those who cannot afford them. Due to the cost to the government of such legal services, the British government in the year 2000 switched to using a contingent fee system similar to that in the U.S. for certain contentious personal injury cases.
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Question: Why should injured people get money for non-economic damages rather than just compensation for the money they lost due to the injury?
Answer: It is really not enough for negligent defendants to pay just for the economic damage they have caused to someone they have injured. Would you really want to tell the parent of a child who has been blinded, paralyzed, deafened or brain-damaged that it is enough that he or she is compensated for medical bills and other economic losses, but that the non-economic losses imposed upon the child are unimportant? Pain and suffering are real, and severely injured persons should not be deprived of compensation for these damages. top
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Question: Aren’t the courts being overrun by personal injury cases?
Answer: A personal injury case is one kind of tort. Tort cases, not including small claims matters, make up less than 2 percent of the total civil and criminal caseload in the state courts. In 2000, 92 million new cases were filed in our nation’s state courts.13 Of those, 31,280,000 of the new cases were filed in courts of general jurisdiction. Only 565,637 of them were tort cases.14
The trend in the number of product liability cases is down,15 and there were 50 percent more contract cases than tort cases in 2000.16
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Question: Are jurors overly generous in their awards in personal injury cases?
Answer: Research “does not support the widely made claims that jury damage awards are based on the depth of the defendants’ pockets, sympathies for plaintiffs, caprice, or excessive generosity. It also yields no support for the assertions about the proclivities of juries in handing out punitive damages.”17
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Question: What is being done to reduce court costs and delays in tort cases?
Answer: In the past 20 years, significant attention has been paid to factors that contributed to perceptions of high cost and extensive delay in litigation. Larger criminal caseloads that pushed civil cases to the back of the dockets, coupled with diminishing resources, were identified as important factors, and a number of developments and initiatives in the 1990s helped to improve the situation.
The Civil Justice Reform Act of 1990 imposed procedural reforms to improve the rate of case processing and reduce the cost associated with litigation in the federal courts. Studies of the act found that early case management and aggressive discovery oversight have an impact on the pace of litigation and the amount of time that lawyers spend on cases, although a few cases that generate high discovery costs garner significant attention in the public debate about cost and delay.18
This followed a push in the 1970s and 1980s to address cost and delay issues in the state courts. Major efforts were devoted to implementing caseflow management systems. Time standards for disposing of civil cases were refined, and offered new approaches to move along a docket growing in size and complexity. top
Between 1984 and 2000 (the most recent year for which data are available), civil caseloads grew by 40% in the limited jurisdiction courts and 21% in the general jurisdiction courts. However, civil case filings have decreased in general jurisdiction courts for the last three years, and for the last two years in the limited jurisdiction courts for which data are available.19 The proportion of the docket with the greatest increase in filings is domestic relations cases, with adoption and custody cases showing dramatic increases.20 In a study of 30 states, tort filings decreased by 10 percent between 1991 and 2000.21 Criminal case filings have decreased since 1998, reflecting the lower crime rates reported in this period.22 Most states, by a wide margin, are clearing 90% or more of their civil caseloads, with fully 15 states clearing at least 100% of their caseloads.23
These data, coupled with the improved procedures that have permeated court systems, suggest that the complaints about cost and delay that do persist may be limited to specific courts and specific kinds of cases. As the criminal dockets diminish, more resources can be devoted to civil cases. As time standards and case management techniques have become internalized in the court systems, cases move through the system in a more efficient and effective manner. Slowing economic activity takes a toll on the resources available to the courts, with concomitant effects on modernization and technological enhancements. It remains to be seen what impact these technologies might have on civil justice cost and delay.24 top
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