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(January 13, 2003 // link)

They Shoot Lawyers, Don’t They? Striking West Virginia doctors have returned to work. The doctors were striking (yes, it was a strike, but walkout sounds nicer, don’t you think?) to protest rising malpractice premiums. They returned to work on the promise of legislative intervention aimed at easing their burden.

Insurance companies blame rising premium costs on increasing jury verdicts in malpractice cases. This is in fact not true. Insurance company profits have little to do with the payment of verdicts and settlements and a lot to do with the investment of insurance premiums in bonds. When bond prices are low, insurance company profits are correspondingly low. When they are very low, as they are now, insurance companies start to raise premiums and blame lawyers.

Blaming lawyers is convenient. It’s easy because people have been conditioned to dislike lawyers, and to mistrust jury verdicts because of misinformation about those verdicts. Take the infamous McDonald’s coffee case, for example. What you hear is how a woman got a lot of money because she was burned by hot coffee. What you are not told about that case is that the woman who sued McDonald’s was horribly burned and permanently injured as a result of coffee which was so hot that it burned her to the bone in a very private and sensitive area of her body. What we are also not told is that the coffee was so hot because an enterprising young executive at McDonald’s had determined that if he disabled the safety equipment on the coffee machines, he could make the coffee stay hot longer and sell more to factory workers within a certain radius of his store. The woman got scalded, scarred and disfigured. The executive got promoted. You are also not told that the “outrageous” verdict (which as later reduced by a judge) represented one day’s profit of McDonald’s regional coffee sales.

There are dozens of other examples that are exaggerations, misstatements, or outright lies about cases that are aimed at undermining confidence in this country’s civil justice system. The insurance industry is manipulating facts in order to gain legislative advantages limiting the liability of wrongdoers. This so-called “tort reform” legislation is being proposed in many states and supported by pressure from industry (as in the case of the Eli Lilly legislation in the Homeland Security Bill) and professional groups (like the striking doctors in West Virginia).

People tend to support the idea of tort reform because they believe the stories they hear about lawyers. The fact is that lawyers and the contingent fee system afford access to the courts to millions of people who could not otherwise afford to fight for compensation from individuals or companies that harm them through no fault of their own. The insurance industry in New Hampshire recently argued that lawyers should be excluded from representing injured workers in workman’s compensation cases because the average award for claimants in these cases is “substantially higher” when lawyers are involved. I’m sorry, but that sounds like a good thing to me.

The drumbeat of tort reform is growing louder. It is beating to the rhythm of decreased corporate profits and historically low bond rates. The insurance industry is hinting at more increases in the cost of health insurance. They haven’t yet found a way to blame lawyers for global warming, but they will. Hey, wait a minute -- I know what you’re thinking. . .

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Copyright 2003 Edward Philpot

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