As accurately noted in the Wall Street Journal in a recent editorial, liability today has become what taxes were 20 or 30 years ago–an enormous drag on the U.S. economy and a political tool for redistributing wealth unrelated to any genuine injustice. An optimal fix would involve movement toward a British-style loser-pays system. Of course, that type of system is very hard to get passed given the wealth and strength of trial lawyer special interests. Therefore, it might be more realistic to work toward piecemeal reform such as the recently passed limitations on forum shopping by class action plaintiff attorneys.

Next up should be reigning in asbestos litigation abuse–a national problem that has already sent 75 major companies into bankruptcy. The scandal here is that the number of lawsuits continues to grow even as deaths related to asbestos exposure decline. It is estimated that some 90% of new claims are filed by healthy individuals who may never become sick. The best solution, already passed in Ohio, is to dismiss claims for cases that don’t meet AMA-sanctioned criteria and then let the rest continue. Okay, this makes too much sense. The Senate Judiciary Committee would like a system whereby a lifelong smoker with lung cancer but no sign of asbestos-related illness would get a $200,000 payout (thank you Yale Law School grad Arlen Specter!). Right now, we have a free-for-all that carries a great risk of landing on the lap of taxpayers as was exactly what happened with the 1978 Black Lung Disability Trust Fund.

Legal abuse is one of the most heinous forms of economic abuse and without an enormous populist push, it is unlikely to be addressed by a Senate dominated by attorneys and their special interests.

This entry was posted on Thursday, March 3rd, 2005 at 10:03 am by Insider and is filed under Brilliant, but uncategorizable. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.