litigation has created a crisis in America. The time has come to
recognize this crisis and demand that our elected officials work
together to achieve a solution.
am astounded by the extraordinary increase in lawsuits filed in
recent years. At one time, we were a people who took pride in our
ability to work out solutions among ourselves. Now, the solution
of first choice is to sue.
result is staggering: some 16.5 million lawsuits in a typical year.
Class-action lawsuit filings rose more than 1,000 percent in state
courts and 300 percent in federal courts during the 1990s.
costs, too, have been staggering and are reflected in higher prices
for products and services about $233 billion a year, or $3,200
for every family of four.
just the tip of the iceberg. Excessive litigation is putting companies
out of business. Some 60,000 jobs have been lost due just to bankruptcies
caused by asbestos litigation, which ripple through state and local
economies. For every 10 jobs directly lost due to these bankruptcies,
another eight are lost in local economies.
crisis is taking its toll at every level of society. Americans are
afraid to volunteer for charitable organizations because they have
seen charity board members dragged into nuisance suits. Americans
are seeing their profits and dividends dry up, and as a result are
giving less to charities. Years ago, when you were at fault you
accepted responsibility for your actions. Today, we blame someone
else. Today we sue and the costs to state and local economies are
staggering. Taxpayers end up carrying the burden.
meanwhile, have to charge patients more to cover insurance bills
that have been driven through the roof by unfair punitive damage
awards and settlements. An Institute for Legal Reform study found
that 8 out of 10 physicians have ordered unnecessary tests because
they fear malpractice lawsuits. It is shocking that 43 percent of
doctors have considered leaving their medical practices.
we lose more talented doctors, we need to admit that the justice
system is broken and fix it.
big part of the solution is to put fair and reasonable limits on
punitive damage awards. Many of these awards are excessive and out
of control. In 2002, the top 10 jury awards alone totaled $32.7
billion. Again, that's the take from only 10 lawsuits. Reasonable
limits could save as much as $44 billion.
also have to recognize that trial lawyers have spent millions to
stack the deck in favor of abusive lawsuits $470 million
alone on federal campaigns since 1990. They also spend heavily in
state and local elections. They're spending tens of millions for
one reason only: To thwart meaningful legal reform.
are against damage limits. They also desperately want to keep laws
on the books that help them reap huge jury awards. One example is
laws that prevent juries from learning that injured plaintiffs were
not wearing seat belts at the time of an accident. Why hide that
fact? Because a jury is much less likely to reward people who can't
be bothered to fasten their own seat belt, and who is instead blaming
someone else often the company that built their car
for their injuries.
will not end this litigation crisis until we recognize it exists.
We need to get back to the American idea that we, as free and responsible
people, can settle our differences without lawyers who will drive
doctors out of business and harass people who serve on charity boards.
must admit that it would have been so much more difficult to start
The Home Depot if the legal climate then were as unfair and abusive
as it is now. I'm proud that The Home Depot employs more than 300,000
people and contributes greatly to the local economies of thousands
of communities. But I shudder to think how many tens of thousands
of new jobs have been lost because would-be entrepreneurs have decided
against starting companies because of our unfair legal climate.
time to tell our elected officials that they need to fix the broken
legal system before we lose any more doctors and good jobs. We should
not elect politicians who pay lip service to the American dream
while accepting contributions from trial lawyers to keep the deck
stacked in their favor.
Marcus is a private investor and a co-founder of The Home Depot.
This Commentary first appeared in the San Francisco Examiner.
September 15, 2004]
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