Nuisance Lawsuits, Damage Caps, and Tort Reform

The Chicago Tribune ran an op-ed regarding “nuisance lawsuits,” the lawsuits that insurance companies and corporations simply settle instead of fighting. They choose to settle the “frivolous” claims because the cost of litigation is so expensive. However, the author contends that settling these lawsuits actually winds up costing corporations more because it invites lawyers who don’t do “real” work to file frivolous claims and cash a paycheck. This mocking of personal injury attorneys, while not uncommon, is still insulting to those who choose to work helping the injured. It usually looks quite a bit different if you are the injured person simply seeking fair compensation.

The author then goes on to mock those who “slip and fall on a banana peel at the grocery store” and how their soft-tissue injuries cannot be seen and, therefore, cannot be proven. However, many clients have been injured in a car accident and show no signs of trauma, i.e., broken leg or obvious external bleeding. Should we assume all people who suffer non-life-threatening injuries lie simply because a few unscrupulous individuals and attorneys abuse the system? This would seem to be throwing the baby out with the bathwater and would prevent the thousands upon thousands of people who are seriously injured every year from recovering the damages they are entitled, by law, to receive.

Now, we’ve all heard those instances of extremely frivolous lawsuits. Those in favor of tort reform cite cases such as Pearson v. Chung, where a man sued a dry cleaner for $65 million for a lost pair of pants and displaying misleading signs such as “Same Day Service” and “Satisfaction Guaranteed.” This grabs headlines and the public’s outrage at large, but few people follow up on the cases to see what actually happens in court. In this case, Roy L Pearson, an administrative law judge from Washington, D.C., wound up losing the case and then would lose his job because his conduct in the case showed a lack of “judicial temperament.” If a lawsuit is frivolous, avenues exist within the judicial system to address it, making tort reform completely unnecessary. The avenues worked in this case, and the man who brought such a frivolous suit lost the case and his livelihood.

But what happens where there is a cap to damages against an obviously negligent party? Let’s look at a real-life example – the 2008 commuter train crash in Los Angeles. In that accident, the conductor of a commuter Metrolink train was texting while operating the train, ran a red light, and slammed head-on into an oncoming freight train. 98 passengers were injured, including 24 fatalities. The victims and their families sued for damages against Metrolink and Veolia Environment, the company employing the negligent conductor. These victims, however, found that, because of a law passed in 1997, the total damages were capped at $200 million. While this sounds like a lot of money, the presiding judge in the civil suit estimated that total damages for all the victims were, in reality, upwards of $350 million. This left him with a “Sophie’s Choice” of dividing limited assets amongst the seriously injured. This cap ensured that no victim would get the full amount each deserved while letting those who caused the damages off the hook.

As we head into an election season where jobs will the number one priority, there will be talk amongst some politicians that tort reform will be a way to spur economic growth. There will be talk of “greedy trial lawyers” and the need to regulate them out of business. Understand, however, that tort reform is nothing more than a way for insurance companies and corporations to dodge liability. These caps directly hurt victims, subjecting them to further abuse at the hands of a legal system designed to offer protection. Zane T. Cagle and the personal injury attorneys at The Cagle Law Firm are proud of our work every day to assist injured victims of negligence. Whether it’s a car accident, product liability, wrongful death, or any type of personal injury, we offer the passion and tenacity to argue your claims before a jury successfully. If you’ve been injured in Missouri, Illinois, or Kentucky, give us a call today at (314) 276-1681 for a free consultation.