TORT LITIGATION COSTLY AND INEFFICIENT
September 30, 2004
Tort litigation has been a costly burden on the economy and the windfall rewards have gone disproportionately to lawyers rather than plaintiffs, says Stuart Taylor Jr. (National Journal).
For example, asbestos-related litigation to compensate legitimately injured workers has evolved into a dubious revenue stream for trial lawyers, says Taylor.
- About 90 percent of all claims currently being generated come from individuals recruited by trial lawyers rather than claimants actively seeking compensation.
- More than 80 percent of claimants have no discernable asbestos-related illness or impairment.
Aside from indirect costs such as "defensive medicine" tests and the thousands of jobs lost through tort-induced bankruptcies, the trial lawyers get the bulk of the rewards, says Taylor:
- Approximately 33 percent of the more than $230 billion in annual costs goes to the plaintiffs' lawyers and legal defense.
- About 22 percent of it goes to compensate alleged victims' economic losses, with another 24 percent going towards non-economic losses such as pain and suffering.
- The remainder, roughly 21 percent, goes to tort insurance overhead costs.
According to the best estimates, about 80 percent of medical-malpractice claimants are not victims of malpractice and over 90 percent of actual victims receive no compensation, notes Taylor.
Source: Stuart Taylor Jr., "Edwards and the Problem with the Trial-Lawyer Lobby," National Journal, Number 28, July 10, 2004.
For text (subscription required) http://www.theatlantic.com/politics/nj/taylor2004-07-13.htm
Browse more articles on Government Issues