April 2, 1998
New PPI report on "lawsuit lottery" puts trial lawyers on defensive
The Public Policy Institute has issued a hard-hitting new report on the lawsuit industry-and the report instantly put the New York State Trial Lawyers Association on the defensive.
The Institute, the research arm of The Business Council, said that New York is trapped in a "lawsuit lottery" system that erodes justice, encourages lawsuits against defendants with deep pockets regardless of fault, and works largely to benefit an army of trial lawyers.
'An Accident and a Dream': How the Lawsuit Lottery is Distorting Justice, and Costing New Yorkers Billions of Dollars Every Year was released March 25.
Within days, the New York State Trial Lawyers had formed a new front group, collecting a gaggle of "consumer" advocates, labor lobbyists and the like to complain that "big business" is trying to "gut" consumer protections.
The title of the PPI report comes from a slogan found on a trial lawyer's license plate frame: "All You Need Is an Accident and a Dream." The line echoes a theme of the New York State lottery, and illustrates the lottery-like mentality some trial lawyers seek to inject into the legal system.
"As consumers, drivers, taxpayers, and workers, New Yorkers are paying more and more every year to support a lawsuit industry that has quietly begun to dominate and distort our system of justice," the report warns.
The report shows that:
- The lawsuit industry costs New Yorkers $14 billion each year, or almost $800 per person.
- It adds hundreds of millions of dollars every year to the property tax burden, because of runaway lawsuits against municipalities.
- It increases consumers' and businesses' costs in hundreds of ways. For example, it adds $600 to the cost of giving birth and $400 to the cost of insuring a car for a year.
The report documents how some trial lawyers are fostering a lottery-like, get-rich-quick mentality with the goal of engendering new suits.
The report urges New York to follow similar states in tort reforms to limit the cost and range of lawsuits. Possible reforms include: a statute of repose, a state-of-the-art defense, and other fundamental product liability reforms; early recovery guidelines to encourage early settlements in part by reducing fees to attorneys who reject settlement offers; and caps on contingency fees in some cases.
An Accident and a Dream documents an apparently related series of trends in the lawsuit lottery: the increasing number of lawyers in the state; the growing number of tort suits; and increasingly visible efforts of trial lawyers to recruit plaintiffs.
Tort filings in New York jumped 58 percent between 1988 and 1996, from 53,104 to 84,089 cases. This increase, the third highest in the nation, included a surge in motor vehicle-related claims-despite a sharp drop in the number of injury-causing traffic accidents (from 220,000 to 190,000), the presence of a no-fault auto insurance law that is designed specifically to minimize lawsuits, and a population that increased only slightly during the same period.
This lawsuit explosion is clogging the courts; the proportion of cases that are not disposed of within the timeframe needed to meet the state court system's standards jumped from 26 percent to 42 percent between 1988 and 1996.
The trial lawyers' new front group, dubbed "S.O.S. Justice," claimed that tort reform is being pushed by what they called "insurance company bean-counters" to "fatten their already bloated bottom line."
Click here for the PPI news release.