"Lawsuit Hell" is this week's cover story in Newsweek. The reliably liberal weekly has chronicled the sorry tales of doctors, teachers, ministers and other professionals living in fear of litigation.
"These are the sorts of stories that fill schoolteachers and doctors and Little League coaches with dread that the slightest mistake -- or offense to an angry or addled parent or patient -- will drag them into litigation hell, months or years of mounting legal fees and acrimony and uncertainty, with the remote but scary risk of losing everything," recount staff writers Evan Thomas and John Stuart Taylor, Jr. In offering solutions, they celebrate the work of the author of The Death of Common Sense and founder of Common Good, Philip Howard, an attorney for Manhattan's Covington & Burling, who has become the point man of tort reform
The grand irony here is that Newsweek's story appears the exact same week that the reliably conservative Weekly Standard has run its own cover story entitled "In Defense (Sort of) of Trial Lawyers." For the first time in memory, a right-wing magazine has said something positive of the plaintiff bar.
What's going on? Are liberals and conservatives changing partners? Will the Republicans soon be fundraising at the Association of Trial Lawyers of America while the Democrats court the American Medical Association? Or are right and left simply doomed to take opposite sides, no matter what the issue?
As the author of the Weekly Standard article, I feel the obligation to make some sort of explanation.
Newsweek's concerns -- which come quite far along in the game -- arise because lawsuits have gone beyond the realm of corporate America. "American don't just sue big corporations or bad people," says the article (are they really that apposite?). "They sue doctors over misfortunes that no doctor could prevent. They sue their school officials for disciplining their children for cheating. They sue their local governments when they slip and fall on the sidewalk." In other words, trial lawyers are no longer just targeting "deep pockets." They're going after you and me.
My article is predicated on the long-standing conservative complaint that trial lawyers have carved a huge gaping hole in the American economy. From Peter Huber's Liability (1988) to Walter Olson's The Litigation Explosion (1991) to the many articles in Forbes and Fortune¸ the broad consensus has been that malpractice, product liability, and other legal strategies have become a "tort tax" amounting to $200 billion annually. "Trial Lawyers Inc. might well be the most profitable business in the world," intoned a recent broadside published by the Manhattan Institute.
Hold on a minute, I suggested. Before we engage in uninhibited lawyer bashing, let's admit that that something good does come out of the tort system. In fact, torts have become a form of private regulation, carried out without the burden of government bureaucracy. Lawsuits can zero in on important niches of health and safety without regulatory ineffectiveness or overkill.
In his recent book, Four Trials, for example, presidential candidate John Edwards recounts the case of a five-year-old girl who had 80 percent of her intestines sucked out of her body and was condemned to a lifetime of feeding tubes when she became caught on an uncovered wading pool drain. As her lawyer, Edwards discovered there had been nearly a dozen almost identical instances of death or severe injury involving the same drain. Aware of the problem, the company had simply dodged the issue. "Doesn't he know this kind of thing should never be put in writing?" was the response to one internal memo warning of the danger. In this situation, the $25 million damage award hardly seemed inappropriate.
Republicans would be foolish to get on the wrong side of these issues (just as Edwards is foolish to think that winning such cases qualifies him to become president). Yet despite the productive work done by trial lawyers, there are obvious flaws in the system. Both Newsweek and the Weekly Standard are attempting to pinpoint exactly what has gone wrong.
My view is that the system ultimately goes awry when malpractice or product liability lawsuits runs up against the limits of nature or human tragedy. Many early malpractice suits, for example, targeted anesthesiologists, who often underdosed or overdosed patients, leading to side effects and operating-room catastrophes. The discipline underwent a number of reforms in the late 1970s and now lawsuits against anesthesiologists are rare. Lawsuits against obstetricians, on the other hand, have become a counterproductive ritual.
The principle cause of action is cerebral palsy, a condition that appears at childbirth and results in severe lifetime disability. In the early years, malpractice attorneys argued that CP occurred because doctors were not performing enough caesarian deliveries. (Edwards' first big damage award was against an old-fashioned North Carolina doctor who thought women didn't need C-sections.) Yet caesarians have now risen from 4 percent of deliveries in 1970 to 25 percent today -- and the incidence of cerebral palsy has not fallen one bit. Obviously the theory is incorrect. Cerebral palsy has other causes. Many researchers now believe it results from genetic damage or early trauma in the womb. Yet lawyers keep bashing away at obstetricians, using the pathetic spectacle of severely inflicted children to win the sympathy of the jury. The result is obstetricians are going out of business and women must travel hundreds of miles to seek care.
Many veteran trial attorneys who pioneered liability law now agree the system is riddled with excesses. John O'Quinn, the Texas billionaire attorney who bankrupted Dow Corning over breast implants, supports a "loser-pays" system that would force attorneys to reimburse the defense's court costs when it loses. Jere Beasley, who just won $11 billion for Alabama over ExxonMobil gas leases, believes that punitive damages should go to the state rather than the individual plaintiff. Wayne Reaud, the Gulf Coast attorney who became a billionaire suing Texas oil companies over asbestos, rails against the "recruiting law firms" that have turned asbestos litigation into an assembly line. (Reaud's 47-year-old partner was murdered by a disaffected client who had been told, falsely, by a gristmill law firm that he had asbestos-related disease.)
Damage caps, special medical courts, outlawing contingency fees -- no one knows exactly which strategy offer the best promise of curbing the tort system's excesses while maintaining its basic advantages. But at least the discussion has begun.