The Rising Tide of Torts
Every year, more than a million civil cases are filed in the Unified Court System of New York State. The vast majority are small claims and landlord-tenant disputes--important to the parties involved, to be sure, but also simple enough to be handled in lower courts on the city and county level.
The remaining new civil matters--roughly one out of every six, on average--are filed in State Supreme Court, the trial court of general jurisdiction that handles most substantial monetary claims in New York's state court system. And in recent years, a growing share of these major civil cases has been comprised of tort claims--a rising tide of torts that increasingly threatens the court system's ability to adjudicate cases on a timely basis.
Filings headed upwards
When the state began its present system of judicial record-keeping in 1988, torts made up 40 percent of new civil filings in Supreme Court--a total of 53,104 cases out of 134,103 filed that year.
By 1996, the number of new tort filings had risen to 84,089--a 58 percent increase in just eight years. Tort claims now make up 44 percent of all new Supreme Court civil filings.
The rate of increase in tort filings is similarly high when expressed as a share of the state population, which rose only slightly during the same period. In 1988, there were 300 new tort filings per 100,000 residents in New York State; by 1996, the tort filing rate had risen to 460 per 100,000.
In the latest published comparison of state court systems, New York had the third highest tort filing rate in the nation. New York's rate of increase in tort filings per 100,000 residents was also the third highest the country between 1990 and 1995--a period that saw a net decrease in tort filings in other states, according to the study.(23)
Revealingly, this pattern of litigiousness in the tort arena does not extend to contract cases (for which lawyers are usually paid on an hourly basis). The filing rate for contract cases in the Empire State has dropped in recent years and is among the lowest in the country.(24)
More cases, more trials
A civil suit in New York State Supreme Court begins with the filing of a summons and complaint. This is followed by pre-trial motions and "discovery"--the process in which both sides can question witnesses under oath, review documents related to the case, and inspect physical evidence. When this phase is completed, the plaintiff files a note of issue, signaling to the court that the case is ready for trial.
Of the 88,781 tort suits disposed of in state Supreme Court in 1996:
- 50,579 cases, or about 57 percent, were resolved before the filing of a note of issue, either through settlement or dismissal.
- 2,547 cases, or 2.9 percent, were transferred to lower courts.
- 25,284 cases, or about 29 percent, were settled after the filing of a note of issue.
- 7,283 cases, or about 8 percent, were "marked off or stricken," or otherwise resolved (by means other than a reported settlement) after the note of issue.
- 3,088 cases, or 3.5 percent, ended in a jury verdict or a judge's decision, indicating they went to trial.
The number of tort suits going to trial in New York State rose by nearly 50 percent between 1988 and 1996. The percentage of cases disposed of after trial also rose during that period.
Medical malpractice cases were most likely to go to trial, with 6.8 percent of all 1996 malpractice dispositions coming through jury verdicts or non-jury decisions; trials were the route of disposition in 3.5 percent of motor vehicle cases and 3 percent of all other torts.
Opponents of tort reform cite the relatively small number of trials as evidence that there is no real litigation crisis. But this argument conveniently misses the point: The tort tax is driven largely by the number of tort claims and settlements, not just trials and verdicts.
Lawyers for both sides in New York's ongoing game of lawsuit lottery closely monitor jury awards, bench verdicts and appellate decisions in tort cases. A trend of verdicts and appellate rulings favoring one side or the other in any category of liability tends to have a ripple effect; today's verdict sets the stage for tomorrow's claims. Trials resulting in large awards and in broader definitions of liability inevitably inspire more and bigger claims--and more strategic surrenders by defendants, regardless of fault, in the form of pre-trial settlements.
Clogging the judicial arteries
Official statistics for 1988-96 indicate that the growth in tort cases is taking a toll on court efficiency and causing increased delays in case dispositions in New York State.
Since 1979, the state court system has set its sights on "standards and goals" (known in the system as S & G) calling for final disposition of all civil cases within 15 months of the filing of a note of issue. As of 1988, 74 percent of all tort cases were disposed of within the S & G timeframe. By 1996, however, only 58 percent of tort cases met that disposition deadline.(25)
And as the number of tort filings in New York State has grown, so has the backlog of tort cases awaiting final disposition in state Supreme Court.
At the end of 1988, there were 102,324 tort suits pending in state Supreme Court, including 26,014 awaiting trial and 4,665 trial-ready cases that had been pending for more than 15 months.
By the end of 1996, there were 180,117 tort suits pending--up roughly 77 percent from eight years earlier. The number of cases awaiting trial had increased by 90 percent, to 49,368. And the number of trial-ready tort suits pending for more than 15 months had more than doubled, to 10,350.
In contrast, the backlog of contract cases barely changed at all between 1988 and 1996. Three-quarters of all contract cases are finally disposed of within 15 months.
These statistics confirm findings of other studies indicating that tort suits are taking longer to resolve in New York State. For example, in a 1992 study of courts in 45 local jurisdictions around the nation, New York County (Manhattan) ranked fourth in both the median duration of tort cases (634 days, or about 21 months) and in the share of cases that took more than two years to reach final disposition (43 percent). In contrast, New York County was one of the most efficient jurisdictions studied when it came to resolving contract cases.
Jury Verdict Research (JVR), a Pennsylvania-based firm that follows tort cases in every state, estimates that the average New York case takes 47 months (including the pre- note of issue period) to be processed to final disposition.
No estimates are available on how much it costs the court system to process different types of cases; the state court budget does not separately break out the expense of running the civil parts of state Supreme Court. But the old adage that "time is money" is probably more true of lawsuits than of most activities--and the statistics make it clear that torts in New York are both costly and time-consuming.
The motor vehicle connection
What's "driving" the increase in tort litigation in New York? No pun intended, but the answer has a lot to do with wheels.
The number of motor vehicle tort filings in state Supreme Court increased from 22,108 in 1988 to 41,668 in 1996--an 88 percent jump. Motor vehicle cases rose every year and accounted for nearly two-thirds of the increase in all tort filings in New York during that period. The smallest annual increase in motor vehicle cases was in 1991; in 1996, motor vehicle filings were up 11 percent, the largest increase since 1989.
These increases would be understandable if matched by some equivalent increase in car crashes--or, at the very least, in car accidents involving personal injuries. Instead, as shown in the graph above, motor vehicle accident and tort filing rates have moved in precisely opposite directions, with fewer accidents but more lawsuits.
The number of personal injury accidents in New York State decreased from 220,000 in 1988 to 190,000 in 1996--a drop of 25,000 during a period that saw 19,000 more lawsuits. The ratio of lawsuits to personal injury auto accidents doubled, from 0.11 : 1 to 0.22 : 1.
In other words, more than one out of every five personal auto injury accidents in New York State now results in a lawsuit--despite the existence of a no-fault insurance law, which is supposed to discourage litigation. As explained in Section 1, it appears that trial lawyers are finding ever more potential loopholes in the law's "serious injury" exceptions.
While comparable state court statistics are not available prior to 1988, an industry study indicates that increased motor vehicle litigation stems from a long-term trend in the state of rising insurance claims for injuries in car crashes. Between 1980 and 1995, the Insurance Research Council reported, the number of bodily injury claims per 100 automobile property damage claims in New York rose by 31.2 percent (from 11.5 to 15.1 per 100), and the average loss paid per claim rose by 187 percent (from $640 to $1,837).(26)
The rise in tort filings also has coincided with a sharp increase in auto insurance costs in New York. As of 1990, when the Insurance Information Institute began reporting a consistent state-by-state measure of average auto insurance expenditures,(27) New York ranked seventh in the nation with an average expenditure of about $706. That was 23 percent above the national average of $574.
By 1995, the latest year available, New York's average auto insurance expenditure had risen to fourth highest, at $906--36 percent above the reported national average of $666. Hawaii was the only state to experience a larger increase in its average auto insurance expenditure during that period; only New Jersey, the District of Columbia and Hawaii had higher overall average auto insurance burdens in the latest rankings.
Other tort filing categories
The slowest rate of increase in tort filings over the eight-year period was in the category of medical malpractice cases, which increased by 2.9 percent. However, this figure includes a steep drop in malpractice filings in 1988 and 1991. The number of new medical malpractice filings rose every year from 1991 through 1996, increasing by a total of 30 percent during that period.
The remaining category of tort filings, classified by the court system as "other torts," includes product liability, premises liability actions, lawsuits against local governments and lawsuits against professionals other than physicians. The number of cases in this category rose by 42 percent, from 26,698 in 1988 to 37,998 in 1996.
New York's large verdicts
What has been the trend in the size of verdicts and settlements in New York? Are municipalities the targets of more or fewer suits? What types of injuries are most frequently involved in tort claims?
Answers are available to some of these questions, but not all of them--because the courts of New York State, like the courts of most other states, do not systematically collect and record data on the outcomes of civil cases. Information on jury verdicts is compiled only by private firms, like Jury Verdict Research, in databases that are used by lawyers to decide how much to demand (or how much to offer) in the way of damages.
One out of every four jury awards in New York State reported in the 1997 New York Jury Verdict Survey published by Jury Verdict Research exceeded $1 million between 1990 and 1996. The median verdict for all types of cases was estimated at $273,000--roughly five times the national median.
Broken down by case categories, the median jury award was estimated by JVR at $189,500 for vehicular liability, $210,000 for premises liability, $350,000 for government liability, $480,000 for contractor negligence and $1 million for medical malpractice.
Juries in the Empire State tend to award far more in damages for the most commonly claimed injuries in tort cases than juries elsewhere in the country, as shown in the following JVR comparison of New York median awards to national medians:
Type of injury
|Median Award in New York||Median Award, Nationally|
|Disc injuries||$ 180,000||
|Spinal nerve injuries||206,933||
|Knee cartilage & ligament injuries||202,553||
These huge disparities in jury awards inevitably mean that it also costs more to settle a case in New York. The latest JVR survey estimated the median New York settlement at $200,000; nearly one-third of all settlements were for more than $500,000, and 16 percent exceeded $1 million. Among different categories of tort cases, overall New York settlement medians were estimated at $100,000 for vehicular liability, $125,000 for premises liability and $700,000 for medical malpractice.
Other independent national studies of verdicts also show exceptionally high figures in New York State's largest jurisdictions.
As of 1992, the median award to plaintiff winners in jury cases in New York County (Manhattan) was $150,000, the highest among the 45 large counties studied that year by the National Center for State Courts. The average award in Manhattan ranked third, at just under $1.2 million. The "trim mean," which drops the largest 5 percent and the smallest 5 percent of awards from the calculation of the average, was $431,740, also the third highest among the 45 counties studied.
All of the estimates for awards and settlements share one thing in common: As much as one-third of the total is pocketed by plaintiff's lawyers, in the form of contingency fees. Because tort cases in New York produce exceptionally large awards and settlements, plaintiff's lawyers have an especially strong incentive to aggressively market their services and file more claims in the state.
Reaching for still more
As if the system were not already producing a bumper crop of tort cases, plaintiffs' lawyers in New York are pushing hard for legislation designed to pave the way for larger verdicts and more lawsuits in the few areas where the state's definition of liability is not already expansive.
Two of the highest-priority items on the trial lawyers' 1997-98 legislative agenda would:
- Authorize plaintiffs in "wrongful death" cases to seek damages
for bereavement, inviting a quantum leap in multi-million dollar
claims revolving around the emotion-charged issue of compensation
for emotional and psychological damages associated with the loss
of a life.
Trial lawyers are telling bereaved families that existing state laws treat human life as if it were "worthless." But remember that lawsuits are pursued not on the basis of the wrongfulness of the injury, but on the basis of the deep pockets or heavy insurance coverage of the potential defendant. In this light, it would be more correct to argue that it is the lawsuit industry, which can do nothing about the loss of life taken by, say, an uninsured drunk driver, that treats those lives as "worthless."
According to an analysis by the American Insurance Association, adoption of a "wrongful death" lawsuit law alone would cost New Yorkers $1.1 billion a year, the largest chunk of that in higher auto-insurance premiums.
- Allow lawsuits against health-maintenance organizations, insurers,
and self-insured employers for "any personal injury, death or damage" allegedly
caused by a health-care plan's delay, failure, or refusal to provide any service
in a timely manner (the timeliness and necessity of the treatment
in such cases assessed, of course, by jury, not by medical professionals).
Health plans could be sued even if a denial of a request
or refusal to pay for a service was a rational decision based on
simple and convincing medical evidence--and even if they were
not negligent in any way.
Opening the door to such lawsuits would drive up the cost of health insurance--which, as has been demonstrated time and again, will inevitably lead to a reduction in the number of people who have health insurance. So this is one more example of the process by which the lawsuit industry attacks the underpinnings of the healthier and safer society we have today.
The people are fed up
While the trial lawyers are pushing for ever more lawsuits, the voting public seems to want things to move in the opposite direction. An authoritative survey of New Yorkers conducted last year by Zogby International of New Hartford, N.Y., found that the people overwhelmingly believe that the cost of lawsuit awards is too high, and that the current liability system needs major reform.
Fully 80 percent of survey respondents agreed that "many people see lawsuits as a way of easy money or a financial windfall," and 87 percent agreed that the amount of money awarded in lawsuits "has gotten out of hand."
The survey found strong support for a number of specific ideas that could cut the cost of lawsuits. More than half of respondents said they would favor a $250,000 cap on awards for "pain and suffering," even if a member of their own family was injured, and 67 percent said damages should be limited in wrongful death cases.
"Support for tort reform is wide and deep," said John Zogby, president of Zogby International. "The survey offers a portrait of a constituency ready for a broad sweep of reforms in the system of liability lawsuits."(28)
23. "Examining the Work of State Courts, 1995: A National Perspective from the Court Statistics Project," National Center for State Courts, p. 28.
24. Ibid., p. 29.
25. American Bar Association standards call for speedier dispositions, suggesting that 90 percent of cases should be concluded within one year and 98 percent should be concluded in 18 months.
26. Trends in Auto Injury Claims, 1996 Edition, Insurance Research Council, New York.
27. Intended to reflect what consumers actually spend on insurance for each vehicle, the average is calculated as total written premiums divided by liability-car years.
28. The survey canvassed 716 likely voters across the state. It was conducted on behalf of New Yorkers for Civil Justice Reform, a coalition of small and large businesses, local government groups, physicians, non-profit groups, professional associations and others campaigning for a reform of the state's liability laws and practices.
The Public Policy Institute of New York State, Inc.
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