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Commonwealth Foundation


Lawsuit Lottery Must End

by Leah Achor
 

In 2004, a Hazelton-area community pool closed after a man jumped into the water, slightly cutting his heel, and then filed a lawsuit claiming $100,000 in damages. While the settlement was significantly less, the owner, fearing future lawsuits, shut down the pool. Now, this once-thriving business, beloved as a summer retreat for families and a source for jobs, is no more.

Unfortunately, this is not an isolated incident in Pennsylvania. As lawsuits for exorbitant damages like this occur too often and are encouraged by current state law, the commonwealth has become a breeding ground for the lawsuit lottery and jackpot justice.

Upon taking office in January, Governor-elect Tom Corbett will face the burden of addressing the numerous economic and fiscal problems facing the Keystone State. One of the most pervasive is lawsuit abuse, a dangerous trend we ask him stop in the name of growth, fairness and families.

The Pacific Research Institute's 2010 U.S. Tort Liability Index ranks Pennsylvania 46th of the 50 states in ability to control lawsuit costs. Meanwhile, state residents, doctors, and businesses paid out $7.6 billion in lawsuit awards in 2008, resulting in obscene medical malpractice insurance rates that have stifled doctors' ability to practice and made the state uncompetitive.

Pennsylvania must follow lawsuit abuse reforms like those recently enacted in other states used to fuel economic growth. Texas has seen the number of medical malpractice suits plummet, and the number of doctors moving to the state skyrocket, since passing lawsuit reform in 2003. Contrast that with Pennsylvania, which has been one of the states least likely to attract new doctors.

Unfortunately, trial lawyers continue to push even more dangerous tort policy, such as giving attorneys the ability to argue a dollar amount for emotional damages during closing arguments. This past year, the trial lawyers association nearly got legislation to do just that. Essentially increasing lawyers' power to line their own pockets, emotionally swayed juries would be more easily persuaded to give exorbitant amounts of money to injured victims, causing a domino effect and higher insurance rates. Thankfully, this provision was nixed following an outcry from grassroots activists.

Although a small victory, the prospect of hitting the lawsuit lottery for hungry lawyers and often greedy plaintiffs remains too high. This attraction is seen as just one more reason why frivolous lawsuits continue to clog our courts. Pennsylvania should cap awards for pain and suffering, as Texas, Michigan, Ohio, Colorado, California, and other states have done. While this would require an amendment to the state constitution, such reform has proven successful.

Punitive damages and non-economic damages such as emotional distress must be given only in cases of purposeful harm, not accidents. Measures should be taken to avoid similar errors in the future, but large awards to punish honest mistakes (i.e., lawsuit awards on top of actual damages) do more harm than good. Purposeful harm or gross negligence, on the other hand, can be prevented by swiftly punishing those at fault.

Additionally, joint and several liability must be eliminated. This type of liability puts full financial responsibility upon the defendants that have the deepest pockets. For example, if three defendants lose a case to one plaintiff, but only one has the ability to pay a large sum, one defendant can be forced to pay the entire award, even if they had little to do with the case.

Walt Disney World v. Wood is the most infamous case involving joint and several liability. A defendant defaulted, and the wealthy Disney Corporation had to pay the entire damage award though it was only 1 percent liable for the plaintiff's injury. Pennsylvania's current system does not properly determine parties' actual responsibility, but defaults to awarding huge sums of money to victims and their lawyers.

Ultimately, Pennsylvania's tort system that rewards lawsuit abuse is detrimental to the state's economic vitality. The current policies and laws will continue to inhibit economic growth until we enact reforms to make Pennsylvania attractive to doctors and businesses again. But even more importantly, it can curtail the human toll taken on our society by protecting good people and good business from jackpot justice.

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Leah Achor was a summer research fellow with the Commonwealth Foundation (www.CommonwealthFoundation.org), an independent, nonprofit public policy research and educational institute based in Harrisburg.
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