A surprisingly silly article on “litigation excess” in the US

January 23, 2009 |

I love the Lexington section in the Economist.  A vehicle for analysis of a person or topic not on the immediate news horizon but clearly relevant.  It is at its most useful when acting as a mini biography of an important but not reported upon personage.  Sometimes it analyses some aspect of the political landscape, often the state of the parties, their operatives or the electorate.  Usually first rate stuff .

The latest offering, Law v common sense, is just plain awful.  The same old trite lines about litigation ruining everything and causing gridlock.  The thread of the story is a series of  admittedly scandalous examples of appalling abuses of civil litigation process. The article does have a point in commenting on the exponential growth of the number and size of statutes and regulations.


What the article (but not the associated comments on the web) forgets is:

  • litigation is not a process commenced lightly.  Vexatious claims are rare.  For starters most law firms won’t take fringe dwelling case on a “no win no fee” basis.  They want money up front.  When presented with a case that is ridiculous most counsel will move heavan and earth to settle.  Counsel have only one reputation and running crap points erodes that fast;
  • litigation as much as legislation has curbed brutish behaviour by companies and other providers of goods and services.  Sometimes litigation is the only option.  The McDonald case referred to in the article is a classic case in point.  The company knew about the problems with scalding coffee and chose to do nothing about it.  They treated the plaintiff like a pariah when she suffered third degree burns and refused to settle.  The plaintiff initiially only wanted her medicals attended to.
  • Despite all the “woe is us”  tenor of this article commerce in America and Australia powers on.  Sure there are now warnings on documents and in the provision of services (sometimes) but often enough that is consistent with transparency. 
  • In my experience the same old types get sued.  They have frequent flier points.  Boorish, brutish behaviour will bring a fight out of those who might otherwise shrug and move on. 
  • Tort reform in Australia has been a boon for insurers but left many who have suffered injury without a recourse to compensation with the arbitrary measurements and the use of medical panels.  Have insurance premiums dropped.  No.  Have insurance companies profits, until most recently, increased?  Yes. The “Ipp Report” was a very poor piece of analysis which suited a Federal Government in the mood for a knee jerk reaction consquent upon the collapse of HIH and a general loathing of the legal process. 

All in all a disappointing effort by an otherwise excellent publication.


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