Australia's Embrace of American Tort Is Bad for Australia
In a courtroom Down Under, one of the first serious applications of American plaintiff-bar tactics in a non-U.S. case will go to trial in September. Is this the future of global litigation?
The Australian Competition and Consumer Commission (ACCC) – the Aussie version of our Federal Trade Commission -- has launched a media-driven, brass knuckles attack against Kimberly-Clark, an American maker of a popular consumer product – facts, the public’s health and normal procedures be damned.
The consumer product – flushable toilet wipes -- is the first truly new approach to a familiar task since the Scott brothers (founders of Scott paper) patented the now-ubiquitous perforated paper roll in 1891. That invention has gone through numerous refinements since then. It was not until the 1930s that a maker could assure consumers that they would find it “splinter free.” It had been on the market for over a century before manufacturers introduced moistened sheets that were strong enough to hold up during use but would break apart moving through pipes.
The 2001 Kimberly-Clark product launch came after extensive research on consumer preferences and development of new paper-related technologies. Now found in a fifth of U.S. homes, flushable wipes turned out to be an unexpected boon for some users. Elderly women are particularly susceptible to urinary tract infection. Regular use of the wipes helps stop UTIs, which, untreated, can aggravate symptoms of dementia.
The Australian march toward litigation began in 2015. A consumer advocacy group called Choice complained to the ACCC that flushable wipe should not be flushed. There had been news about so-called London “Fatbergs,” multi-ton accumulations of cooking fats and debris that had been pulled out of sewers in the United Kingdom. Smaller accumulations were later pulled from Australian sewers. The British and Australian cleanups were expensive, perhaps reflecting inadequate maintenance practices before that. In Washington, DC, a recent court filing put annual costs at less that a thousandth of one percent of that city’s water and sewage operating budget.
American trial lawyers typically launch their high-profile assaults on deep-pocket manufacturers to an orchestrated chorus of activist agitation and sensational headlines. Tactics like that were used in Australia. The company cooperated with the ACCC investigation and attempted to negotiate a resolution. But the agency preferred grabbing headlines to solving problems. In December 2016, it filed its suit, unleashing an anti-corporate media blitz as it did.
ACCC’s doption of the American trial-lawyer-cage-match style of litigation was just beginning. The agency brought in professional witnesses from the United States and the United Kingdom. It charged that the global industry standards to which the Kimberly-Clark products conformed failed to take into account “Australian conditions” while offering no explanation of how those conditions differed from the essentially identical U.S., British and European plumbing for which they were designed. It dismissed the global guidelines because the wipes industry itself had developed them. It called for toilet-paper-based standards of “flushability”, although, so far as anyone can determine, there has never been such standards anywhere in the 126 years since the Scott brothers received their patent.
In media-driven U.S. suits, trial lawyers always accuse their targets of lying, no matter what the evidence. In Australia the ACCC charged that Kimberly-Clark lied that its product would break up or disintegrate in a manner and timeframe similar to toilet paper and was suitable to be flushed down the toilet. But in February 2016, eleven months before the ACCC went to court, New York City released a study that found less than two percent of the residue that might clog that city’s sewers were from flushable wipes, none made by Kimberly-Clark. Later that year, in August, four months before the ACCC filing, the city of Vancouver, Washington, reported that Kimberly-Clark’s flushable wipes broke down better and faster than toilet paper in a study it conducted. Meanwhile, the ACCC and water authorities throughout Australia have refused Kimberly-Clark’s help with designing and conducting such a study. None has commissioned one on its own.
What is going on in Australia? Why has an agency of the national government chosen to play American-trial-lawyer-smash-mouth rugby against a foreign corporation that was trying to cooperate? Looking at similar “don’t bother me with the facts” aggressiveness in Washington, DC's’s attack on flushable wipes, Sally Pipes, a Canadian-American who heads the San Francisco-based Pacific Research Institute, recently concluded that, “The only convincing explanation [is] hostility to business, particularly big corporations.”
America urgently needs to reform its trial bar culture. Media-driven, no-holds-barred litigation has undermined due process and compromised confidence in equal justice. No other country should try to copy our approach to litigation. Australia’s embrace of it is bad news for common sense, elementary justice and rule of law – not just in Australia but here and everywhere.
