Jewish World Review Sept. 30, 2002 / 24 Tishrei, 5763
The U.S. Chamber of Commerce's recent warning that its members should avoid doing business there was not "big business" picking on the poor. Ninety-six percent of the chamber's member businesses have fewer than 100 employees and 75 percent have fewer than 10. Mississippi needs business more than any other state. It ranks 50th among the states in per capita income.
But in the chamber's survey of 800 corporate counsels, Mississippi's liability system ranked worst in the nation. Worst in terms of judges' competence and impartiality, juries' fairness, the use of technical and scientific evidence, overall treatment of tort and contract litigation, and timeliness of summary judgments and dismissals.
A recent study found the system costs Mississippi 7,500 jobs a year.
Mississippi juries have awarded plaintiffs $1.8 billion since 1995. The Mississippi law that allows plaintiffs to combine their cases with others nationwide, along with a notoriously pro-plaintiff local judge, has made Jefferson County (population 9,695) the wonder of the legal world: Between 1995 and 2000, some 21,000 plaintiffs sued there. No wonder Mississippi's insurance commissioner says 71 insurance companies have stopped doing business in the state.
Most Mississippi cities with populations smaller than 20,000 no longer have obstetricians. They have fled skyrocketing jury awards and the consequently high malpractice insurance premiums. In Las Vegas and surrounding Clark County, Nev., 42 percent of ob-gyns recently said they are planning to leave the state unless the liability crisis is solved.
The U.S. Chamber estimates that American consumers pay an annual $1,200 "litigation tax" in the form of lawsuit costs that businesses pass along to consumers, including $60 billion to $100 billion for extra tests and other measures to avoid litigation.
The need for tort reform is obvious. So is the impediment to it: Jeffrey Birnbaum of Fortune says lawyers' and law firms' political contributions in the last two years ($50 million) almost equal organized labor's. In this 2001-2002 cycle, the Association of Trial Lawyers of America is the largest single contributor to federal candidates, with most of its $2.3 million going to Democrats.
The president's Council of Economic Advisers estimates that 58 cents of every dollar from tort settlements goes for administrative costs, defense costs and, especially, fees for plaintiffs' attorneys.
The threat of exorbitant claims, made in a context of judges' excessive deference to juries ruling in ways no reasonable person could anticipate, turns tort law into a tool of extortion. Except it is not law, because due notice is not given as to what behavior triggers liability and what standards control compensation.
By preventing agreement on reasonable limits to liability for terrorism insurance purposes, the trial bar and the Democratic Party are causing delays or cancellations of $10 billion in construction projects.
The tort bar is also implicated in a potentially lethal liability crisis germane to bioterrorism. There need to be reasonable limits on the liability of vaccine manufacturers arising from rare and unavoidable instances of harmful reactions to vaccines. This is adversely affecting the development and availability of medicines on which millions of lives could suddenly depend.So remember the candidates who support tort reform when you vote on Nov. 5.
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