Americans have access to one of the finest and most robust judicial systems in the world. And, while justice is not perfectly served, it remains the goal toward which we still aim. Historically, the U.S. has been good about correcting legal imbalances and unfairness, at least when injustices come to public light. But, a problem that is unknown can’t be fixed. Trial lawyers who prey upon vulnerabilities and loopholes in the law cannot be trusted to self-correct bad behavior.
A hidden (albeit growing) problem in our legal system is mass tort litigation. Mass tort litigation is not a term many people are familiar with, but people are familiar with examples when they see it. First, torts are civil cases, not criminal proceedings. If, for example, a person is harmed by a defective product and seek redress, they have now entered the world of tort law. When injuries occur to several people, and they collectively bring suit, that is mass tort litigation.
There are any number of famous mass tort cases. What trial lawyers learned early on is that tort redress on a large scale proves extremely profitable. Today it is a multi-billion-dollar industry, fueled by slick marketing, that takes advantage of weaknesses in the legal system to turn incredible profits. Whole industries like medical, automotive, and consumer products (to name a few), are routinely shaken down by dishonest trial lawyers who understand that even the threat of mass tort litigation can result in huge settlements.
Of course, the damages are not sustained only by industry. Thanks to rampant abuse, companies are forced to build in potential liability damages into the cost of products. In real terms, the sum of tort costs passed on to consumers is just under $500 billion, just over 2 percent of the country’s gross domestic product (GDP). If anybody ever wonders why their automobile or medical insurance is on the rise, thank your local trial lawyer association.
Unsurprisingly, America has significantly higher liability costs than peer nations. And, thanks to the unchecked abuses, the direct economic costs of the tort system grew at an annual rate of 6 percent year over year between 2016-2020. This exceeds both the rate of inflation and GDP growth. Thanks to these outstanding liability costs, American manufacturing costs are less competitive, foreign direct investment is negatively impacted, and innovation is deterred.
And for those wondering if the poor plaintiffs (on whose behalf the trail lawyers ostensibly go to war) ever receive appropriate compensation from a successful mass tort litigation, the numbers speak for themselves. For every dollar paid in claimant compensation, 88 cents went to legal and related costs.
It doesn’t makes sense to allow this lawsuit abuse to continue in the U.S., where it is estimated each citizen bears a yearly $1300 tort tax. This only happens because the trial lawyer association is powerful, well-organized, and territorial. They know how their bread is buttered and don’t want the good times to end.
If U.S. lawmakers (encouraged by voters) could get serious about tort reform with teeth, much of the recent inflationary pain could be alleviated. And the fixes don’t have to be complicated. For example, increasing penalties for filing frivolous cases and capping fees litigators can collect will go a long way in checking trial lawyer rapaciousness. States can also begin reforms by prohibiting their own attorney generals from relying on trial lawyer contingency arrangements to bring mass tort litigation.
It is clear that progress won’t be made if Americans stay on the sidelines. Mass tort abuse is slowly coming to light, and something needs to be done about the problem.
