Monday, October 18, 2004

Why Trial Lawyers Suck...(The Life Out of All of Us)

Let me preface this diatribe by admitting something: I am a lawyer. Lest someone think this harsh criticism is simply armchair quarterbacking by someone who does not know anything about the subject; I am the subject. I write this because I am painfully aware that the Democratic Vice-Presidential candidate is a very successful trial lawyer. I believe I know what John Edwards stands for, and I do not want someone who has his values in office.
Plaintiffs’ lawyers suck huge jury verdicts out of the coffers of businesses, insurance companies, and anyone who can afford to pay out a little something in legal extortion. However, the big jury verdicts are not the only monetary damage wrought by lawsuits. Even when a plaintiff loses, we all suffer.
I worked for the last three and a half years as an insurance defense attorney. I would estimate that 90% of the cases I dealt with had little or no merit. For example, the typical case I would see consisted of a rear-end collision at less than 20 miles per hour, with usually less than $1000 in property damage to both vehicles. Sometimes the damage was almost not apparent to the naked eye.
There was always some sort of claimed injury, however. The plaintiff had neck and back problems, and went to a chiropractor for months of treatment. Usually, they would have $5,000 worth of MRI scans. Sometimes they would consult with an orthopedic surgeon, who would say they needed to continue chiropractic treatment indefinitely.

The plaintiffs in these cases typically stopped at a law office before seeking treatment. Speaking personally, if I felt I had been hurt, the last person I would talk to would be a lawyer. In my mind, severe pain equals hospital and/or doctor.
After whatever first aid the lawyer inflicted on the prospective plaintiff, they were sent to a chiropractor. This chiropractor did not expect payment at the time of service. The attorneys usually sent the chiropractor a letter stating the attorney would do their best to protect the chiropractor’s bill. In other words, they would make sure to pay what they could of the bill immediately after the settlement.
Usually the chiropractic center also owned an MRI facility, and had several doctors and surgeons on staff. These doctors were more than ready to write glowing recommendations about how much good the chiropractic care was doing, and how the plaintiff was more than likely never going to be 100% again. There were pages and pages of documentation to support these injuries, and pin all of the plaintiffs’ problems on the auto accident.
On the rare occasions where the plaintiff hit the chiropractic centers first, they were referred to an attorney. The chiropractor would give a plaintiff a list of lawyers they could use. Some places refused to treat the plaintiff unless they retained an attorney.
A personal injury attorney typically had a contingency fee arrangement with their plaintiffs. They charged 40% of the recovery if the case had to be tried, and 35% if the case was settled before trial. They charged 30% if the case settled before a lawsuit was even filed.
As a rule, these cases mostly settled below the amount of the claimed medical damages. Oddly enough, a case would settle nicely when the amount offered was divisible by three. The lawyer got a third, the doctor got a third, and the client got a third. Often, a lawyer would reduce their fee in order to make the post-litigation settlement numbers work.
Typically, the plaintiffs had a prior history of car accidents where they recovered some money. Sometimes they would have a history of slip-and-fall accidents. Invariably, they complained of the same exact injuries in each and every case. Sometimes they used the same lawyers, sometimes not. They certainly would not disclose their prior accident history unless they had to.
I was one lawyer working for only one insurance company, in one relatively tiny part of the state of Texas. I had an average of over seventy active cases. Of those seventy, 90% were of the type I just described. I worked in a law firm with 15 other lawyers, who shared an identical caseload.
These numbers serve to illustrate the magnitude of the problem. If each insurance company has at least 15 lawyers working for it in this area alone, with an average of 70 cases; each company has about 1,050 cases going on right now, just in this area. This number is on the low side, since I am only figuring one law firm per insurance company. It is not unusual for an insurance company to hire several firms to defend its cases in an area the size of the Dallas-Ft. Worth Metroplex. I know the carrier I worked for had several firms they used, in addition to the one I worked with.
Think about the cost of having that many lawyers floating around out there to defend these suits. The insurance company has to foot the bill for all these defense lawyers. Defense lawyers in this area bill their clients somewhere between $100-200 per hour. A typical law firm requires its associates to bill 2000+ hours per year.
Does the reader wonder why their insurance premiums skyrocket every year?
Insurance premiums are a relatively easy way to illustrate what the plaintiff’s bar does to the rest of us. Lest the reader think only the insurance company has to pay this tab, look where else the plaintiff’s lawyers nail us.
The majority of the civil courts’ dockets are tied up with personal injury lawsuits such as I described. Looking at the numbers from my personal perspective, one is forced to conclude that most of them have little or no merit. I am not even considering the thousands of medical malpractice suits that are out there, or anything other than a small car wreck.
Even if one managed to exist without buying any type of insurance whatsoever, there is still a cost to the average American. If the reader lives, breathes, buys something, or otherwise exists; they are paying taxes. Taxes are necessary to fund the judicial system. There have to be courts to file these cases in. Each of those courts has a judge. Judges need staff. The staff needs clerks. All of the above want health care, free parking, and employee of the month stickers; not to mention a salary. All of that takes money, which comes from taxes. Any governmental entity is a leech; it requires taxes to sustain itself. They do not earn money on their own.
The number of lawsuits being filed determines how many courts there are in a particular county. The more cases filed, the more courthouses have to be built. Courthouses are not cheap. To fund a new courthouse, more than likely taxes will go up. So tax money is going to fund a nice place for the plaintiffs’ lawyers to file their junk lawsuits in.
While the cost of creating new courts is enormous, the economic drain does not stop there. Each case in district court is tried to twelve jurors. Each county court case is tried to six jurors. Each of these jurors would more than likely rather be off earning real money, and contributing something useful to society. The jurors who are unfortunate enough to make it on a panel are paid a whopping ten dollars a day for their services. They lose much more than that in productivity and salary. The rest of us no doubt lose the benefit of their services while the jurors perform their civic duty.
It gets worse. Almost every product the American consumer buys has become more expensive because of legal costs. Think about the cars we drive. How many times has Ford been hauled to court for a product defect? Each of us pays a higher price for the product. What about our food? Even the fast food places are now getting sued because some genius lawyer says it makes people fat.
Let us not forget McDonalds took a hit for having hot coffee. Yes, the stuff is hot. Most of us like it that way. While I am not a smoker, the price of tobacco has skyrocketed because of taxes and lawsuits against the tobacco companies. By the way, cigarettes are bad for your health. It says so right on the package. I would bet there is not a product in use in America that has not been sued for some sort of alleged defect.
A business owner can be sued for someone coming in and falling on their property. They can be sued for some form of discrimination. They can be sued because their product allegedly does some sort of harm to the consumer. They can be sued for something one of their employees does or does not do. They can be sued for a contract dispute with their suppliers or vendors.
Companies that produce a product have to foot the bill to defend this garbage. Companies cannot expand because more capital is tied up in paying high insurance premiums, or paying for judgments against them. Again, this does nothing but make the price of the product go up, but the overall effect is far more serious.
When a business succeeds, it hires more people. That means more jobs and more money for everyone. A lawsuit never managed to create economic growth. Lawyers have made business owners afraid of expanding, or sometimes even going into business at all for fear of getting sued.
Add to that a myriad of government regulations and permits needed before a new business can even open its doors. A potential new business owner can very well be scared away before they ever get started.
We all suffer because of this. Lack of competition also forces the price of the products we all buy straight up. If only the big companies can bear the cost of a lawsuit, the smaller companies do not have much of a chance. That means less of a choice in where and who we can all buy from.
This is not to say that a business or insurance company does not always do the right thing. Sometimes they do have to be brought to justice. Again, the majority of the lawsuits I saw had no merit. The alleged tortfeasor either did not cause any appreciable harm, or was not negligent in any way that I could see. That did not prevent them from being dragged into a lawsuit in what amounts to legal blackmail. While that word might seem to be a bit harsh, it appears to me to be totally apropos.
Often, the cost of defending these cases forces insurance companies or businesses to settle the case, rather than face a trial. The plaintiffs’ lawyers know this, and would settle out marginal cases rather than face a trial themselves. Their strategy was to hold out for the biggest settlement they could; an insane bluffing game. In other words, the plaintiff’s lawyers out there knew the case was not worth anything. They just wanted to squeeze as much as possible out of it.
Plaintiffs’ lawyers know their money is made by settling cases before they go to trial. For the most part, juries did not want to listen to some jobless loser whine about how his neck hurt after a rear-end collision at less than five miles per hour. They reacted accordingly when it came time to hand out verdicts. Plaintiffs’ attorneys try to settle as many cases as possible before they are tried. Often, the cases will settle below their actual medical damages. The only way the lawyers make any money on these cases is to handle an incredibly high volume of them.
This explains why late-night television and daytime programming are full of lawyer commercials. They have to have a constant influx of cases to live on. Each ad promises big bucks to a plaintiff who has not been treated fairly by an insurance company. Each ad promises the lawyer will fight tooth and nail for the best settlement possible. Each ad suggests that the poor viewer is a victim of circumstance, and that they need that lawyer to stand up for their right to get money from the big bad insurance company. By portraying the insurance company as a greedy conglomerate intent on shafting all comers, the standard lawyer ad creates a victim mentality that seems to be prevalent in American society as of late.
Trial lawyers help bring out one of the worst traits in humans: the tendency to blame something else for our misfortunes and problems. Let us face the cold hard facts: if one smokes cigarettes, there are certain health repercussions one will have to deal with. This should come as surprise to no one. Again, it says so right on the package. If one eats at McDonald’s every day, one will probably get fat. That should not come as a shock.
Human nature tends to make us avoid personal responsibility on unpleasant things. Dying of cancer? It must be the tobacco companies’ fault. Never mind the fact that they have been telling us that their product was dangerous for at least 50 years. Did that cut back on the number of people who smoke? No way. The lung we just hacked up on the floor is black because we smoked 3 packs a day. We knew this might happen, and did it anyway.
There is no such thing as personal responsibility to a plaintiff’s lawyer. A personal injury attorney has never seen a client who is at least partially responsible for what happened to them. In part, it is a survival mechanism. It would be hard to go in and fight for someone who does not really deserve what they are asking for. At least, I think so. I know some of my attorney brethren have no qualms about it whatsoever.
There is no gatekeeper to prevent these lawsuits from being filed. When an unmeritorious case gets filed, somebody is going to have to pay to defend it. That somebody is the average taxpayer, one way or the other. There needs to be some procedure in place to stop these cases from being filed in the first place.
The plaintiffs’ attorney would argue that an unmeritorious case can be disposed of by the court before the case comes to trial. There is a procedure called summary judgment. However, that does not stop the lawsuit from being filed. It does not prevent months of discovery being exchanged by the lawyers on both sides. It does not prevent the defense lawyers from billing merrily the whole time.
Even if a motion for summary judgment is filed, that does not mean a judge would do the right thing and dismiss the case. Judges are elected creatures, and they have to finance their campaigns somehow. Usually, their biggest contributors are the lawyers who appear in front of them. If one side feels treated unfairly, they might not contribute when the election rolls around.
It is far easier for the judge to claim a fact issue exists in a case. That way, they do not have to summarily dismiss it. By not dismissing the case, they usually force a settlement. Even if the case did not settle, the judge has managed to avoid making a decision that could potentially result in an appeals court finding error and reversing the decision. Reversals can lead to bad publicity, which leads to somebody else getting the bench when the next election comes up.
So if the judge cannot or will not prevent these cases from getting kicked out of the legal system, what can be done? The answer is to stop them from ever getting filed in the first place. That means tort reform, which makes the American Bar Association scream like stuck pigs when suggested. Tort reform basically discourages certain kinds of suits from being filed by taking away the financial incentives in the suit. By limiting jury awards in certain types of cases, plaintiff’s attorneys lose their primary motivator: money. By forcing plaintiff’s attorneys and their clients to bear the cost associated with defending a bogus lawsuit, the natural result is that not as many lawsuits will be filed. This is not a bad thing, unless one is a plaintiff’s attorney.
The more lawyers there are, the more lawsuits there will be. The more lawsuits are being filed, the more taxes have to be raised. The more taxes go up, the less money the reader will bring home to try and make his or her American dream happen.
On reflection, does this smack of the worst sort of hypocrisy? Again, it should. Trial lawyers make money when people want to be victims.
Everything in the natural order of the universe requires balance. Lawsuits have been used historically to keep some bad people honest. Those days are pretty much gone. In their place, we have a system of too many lawyers who are basically parasites. When the parasite becomes too much for the host to handle, there are problems. If the parasite kills the host, then both will die. It is really that simple.
In other words, if the lawyers put the insurance companies out of business, we all have no more insurance. If they sue a business and make it close its doors, a whole lot of people are going to be without jobs. If they make it so expensive for a businessman to open up a business, there will be a lot less money put into the economy. That makes the tax burden much higher on the people who do have jobs and earn money. That is exactly the point this country is about to reach. Putting a plaintiff’s attorney into the Vice President of the United States of America’s office is begging for trouble. Tort reform seems to be catching on in some places. You can bet that despite his promises to the contrary, John Edwards will not be a strong advocate for continued tort reform.

1 comment:

Reaganesque said...

You have a great blog. I found it on Hugh Hewitt's website. Hope you stop by and take a look at mine :)