Whiplash Frenzy
AMERICAN tort (injury) law has drifted further and further from its original purpose. The traditional end was to compensate people for harms - by and large limited to physical injury - caused by another's negligence. To be held liable, a defendant had to have directly caused the plaintiff's injury; the plaintiff had to have acted in a reasonable manner; and damages were levied in amounts sufficient to ``make whole'' the injured person. Today, the chain of causation for liability is nearly endless, plaintiffs are viewed as having virtually no responsibility for their safety, and juries shovel money at complainants to compensate them for ``mental distress'' and to punish defendants.
So inventive have lawyers and judges become in shifting money from deep pockets to shallow ones that people with every imaginable - and sometimes imagined - grievance are flocking to court.
Some of the outcomes in this litigation explosion are bizarre. Multimillion-dollar judgments, once limited to the most severe injuries, are common. In a suit against Monsanto, a jury awarded each of the 65 plaintiffs $1 in compensatory damages but still socked the corporation with $16 million in punitive damages. The lover of AIDS victim Rock Hudson recently won $14 million from the movie star's estate for mental anguish, even though the man didn't contract the disease.
These distortions of the tort system impose heavy social costs:
They levy a $300 billion ``tort tax'' on goods and services, raising prices and reducing economic efficiency.
They chill innovation. A 1988 survey of corporate CEOs showed that liability concerns led nearly 40 percent to withhold products from the market.
They misallocate resources, for instance, by causing doctors to undertake unnecessary diagnostic and treatment procedures.
At the moral level, they foster the notion that one has a ``right'' to a risk-free life and erode the principle of individual responsibility for actions.
Of course, many injury claims are not frivolous, and people should be recompensed for avoidable harm. But the present system doesn't even work efficiently for plaintiffs. Clogged courts keep deserving people waiting years for payment. Moreover, less than half of the $16 billion a year Americans pour into tort litigation goes to compensating victims; the rest is devoured by the system, mainly as fees to lawyers.
Courts and legislatures need to bulldog the runaway tort system. They could begin by curbing punitive damages. Punishment should largely be a matter for the criminal courts, not civil courts (the Supreme Court has agreed to hear a case on the constitutionality of huge punitive damages). Then, standards of ``fault'' need to be made clearer, categories of merely emotional harm should be scaled back, and ways must be found to streamline the system. Also, now that barriers to lawyer advertising have fallen, bar groups should be doubly vigilant to discipline ambulance chasers.