The Dangers “Tort Reform” Poses to Consumer Rights

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The Dangers “Tort Reform” Poses to Consumer Rights

“Tort reform” has been a common plank in political platforms over the course of the past five decades. One would assume from the rhetoric of the politicians and lobbying organizations who push for tort reform that individual citizens are winning the proverbial lottery when a jury decides to award plaintiffs large injury settlements, settlements that are often brazenly misrepresented by groups such as Citizens Against Lawsuit Abuse (CALB).

Citizens Against Lawsuit Abuse and other deceptively-named corporate interest lobbying firms that push for “tort reform” present themselves as groups of concerned members of the public. In reality, they are paid advocates for corporate interests who seek to limit the legal rights of citizens who have been severely harmed by unsafe products pushed out to market without due diligence.

What Is a Tort, Anyway?

US law has its foundations in British common law, and the relatively archaic term “tort” derives from that legal tradition. The basic definition of a tort is a civil (as opposed to criminal) action that causes an injury to another party, which thereby creates a legal liability on the part of the person or entity who caused the injury. 

Tort law refers to the area of legal practice that focuses on seeking redress for civil harms, usually in the form of monetary compensation. The legal philosophy behind civil protections such as tort law is that the injured party has a right — enshrined in the Seventh Amendment to the Constitution as written by James Madison — to a trial with a jury composed of their peers to determine whether they have been wronged and, if so, what the remedy should be. 

Many of the Founding Fathers believed the civil (and criminal) jury trial to be the best protection they could provide for citizens against corrupt laws and judges and against tyrannical governance. 

The Seventh Amendment: In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise reexamined in any court of the United States, than according to the rules of the common law.

Torts As a Force for Democracy

Consumer protections have been on the wane since at least the late 1970s but were once considered an essential component of a fair and democratic legal system prior to the start of the ongoing corporate PR assault on torts. 

The entire purpose of the Seventh Amendment — one of the original ten amendments that make up the Bill of Rights — is to protect individual citizens from entities with far greater power than they have, such as governments and corporations, by ensuring that certain legal decisions that can have a huge and lasting impact on their lives are made by a group of their fellow citizens in the form of a jury. 

Tort cases are one of the few instances in which a private citizen — via the subpoena power of federal courts — can breach the barriers corporations have built to shield themselves from their responsibility to the public to ensure that their products are safe. Subpoenas and depositions (sworn testimony) can uncover wrongdoing up to the highest levels of corporate governance by compelling the defendant(s) to produce witnesses and documentation that have often demonstrated intentional negligence for the sake of profit. 

According to renowned consumer rights attorney and author of Unsafe at Any Speed Ralph Nader, tort law is one of the most transparent and democratic elements of our government:

“The court proceedings, should there be any, are open to the press and the public. Verbatim transcripts of the trial testimony are made. In pursuit of what is called ‘truthful evidence,’ attorneys for both sides can vigorously cross-examine witnesses. Settlement can occur at any time, but if one does not occur, the trial jury is responsible for returning a verdict and assessing damages. The judge has the authority, though it is rarely invoked, to reduce or increase the damages if he or she thinks the jury is way off base. The losing party can then appeal, again in open court. The media can track the proceedings from start to finish. No decisions by the other two branches of government come close to being so clearly refereed, so open, and so subject to public review.”

Why would anyone seek to limit Americans’ ability to exercise their Seventh Amendment right to a civil jury trial? And why would anyone be in a rush to hand over those rights to legislators whose tort reform measures are often written by corporate lobbyists with the clear purpose of limiting consumer rights?

Are Frivolous Lawsuits a Serious Problem?

In the vast majority of cases, a person or party who believes they have been injured will seek representation by an attorney on a contingency basis, meaning the plaintiff pays nothing up front and the attorney who takes on the case receives a percentage (limited by individual state statute) of any settlement or jury award that results from the case as compensation for their work and the resources they laid out upfront to pursue the case, resources the average plaintiff does not have at their disposal. 

That alone is enough to curb frivolous lawsuits; not many attorneys will sink their own time and financial resources into pursuing litigation they believe will fail. Even when the wrongdoing is as clear as day, many attorneys shy away from torts because the defendants are usually huge corporations or their insurance companies with limitless funds and armies of attorneys at their beck and call. 

In fact, because corporate law is seen as the most prestigious specialization, and because PR firms have done such an excellent job of convincing the public that torts are somehow illegitimate despite their long history as a check on corporate and government power, aspiring attorneys are incentivized to choose the former both for the sake of higher income and prestige. 

Unfortunately, much of corporate law work is designed to limit tort protections, prevent plaintiffs from making use of the courts to pursue their rights, and generally shield corporations from liability by means of small print and adept manipulation of state laws to sidestep federal ones. 

Tort work, on the other hand, centers on ensuring equal justice under the law and ensuring that citizens have access to the justice system in the event that they’ve been injured due to corporate negligence. Corporate work pays more, and yet a large part of corporate legal PR centers on painting tort attorneys who represent regular citizens as greedy “ambulance chasers” despite the fact that only 1% of federal tort cases ever make it to a jury. 

Manufacturing a Crisis: The History of “Tort Reform”

There’s a reason corporations spend money on marketing, public relations, and lobbying: they work to change public perception and behavior. 

The goal of corporations, their attorneys, their insurance companies and those insurance companies’ attorneys, and the PR and lobbying firms they hire is twofold. They seek to both change the law to make tort cases more difficult to enter into and to litigate and they aim to place legal limits on the damages that can be awarded to plaintiffs by juries. 

Corporations and their PR and lobbying firms seek to limit consumer protections to bolster their own interests, especially their bottom line. 

That effort became an industry unto itself in the 1970s, an industry that has only grown since. 

Consumer and citizens’ activist groups had made great strides between the early 20th century and the late 1960s, spurring the regulation of the meat, auto, medical, and other industries after decades of dishonest and reckless business practices. Journalists and political activists informed the public of these practices and helped create the pressure necessary to motivate the federal government to form agencies such as the US Department of Agriculture (USDA), the Food and Drug Administration (FDA), the Occupational Safety and Health Administration (OSHA), and the National Highway Traffic Safety Administration (NHTSA), among others. 

By the 1970s, a coordinated push by corporations and lobbyists sought to roll back those safety regulations — which were designed to protect consumers and workers from dangerous products and working conditions — and to sour the public on tort law. They then used that public sentiment and large political donations to elect legislators who would change tort laws to favor corporations over citizens.

In short, big business spends a lot of money to convince the public that those who have been awarded damages by juries are undeserving — no matter how grievous the injury they’ve suffered — and that “tort reform” is of the utmost urgency despite the fact that the only people their proposed measures place any limits on are regular citizens who have been harmed by corporate negligence. 

They spend that money because lobbying to have the rules changed in their favor is cheaper than performing due safety diligence before releasing a product to market, provided that the consumer’s constitutional right to a jury trial over an injury is heavily constricted, which it now is. 

Examples of Tort Reform Measures and Their Effect on Citizens’ Rights

Non-Economic and Punitive Damages Caps: Tort reform groups such as the American Tort Reform Association (ATRA) — a group made up of business interests — have sought to place caps on the damages a jury may award an injured plaintiff beyond any medical or other costs they incurred as a result of the injury. 

These measures remove the jury’s ability to determine what is fair and likely to promote better safety practices on the part of the defendant. More than half of US states had imposed damages caps by the 1980s, which is part of the reason tort cases have fallen steadily from 1992 to the present. 

All businesses engage in cost-benefit analysis. With non-economic (or pain and suffering) and punitive damages capped, corporations can and do decide that it is cheaper to pay out settlements than it is to produce a safe product. 

Damages caps also make it less likely that an attorney will be willing to take a product liability case on, knowing that a hard limit has been placed on what their clients can expect to recover in the event that they win. 

Loser pays: One of the most outrageous aims of tort reformers is the attempt to ram “loser pays” laws through legislatures to further discourage injured citizens from pursuing their legal rights. 

Were “loser pays” to suddenly become the law of the land, a family who had lost a breadwinner due to a faulty medical device would be required to pay the legal fees of the device’s manufacturer — likely a multi-billion dollar conglomerate with no qualms about racking up hundreds of thousands or millions of dollars in legal fees — should that manufacturer’s attorneys manage to win the case by technicality. 

Torts and The Future

As it stands, there are few regulations on some of the newest emerging technologies with the greatest risks of personal and social harm. Artificial intelligence (AI), robotics (including medical robotics), nanotechnology, automation, and biotechnology all pose a bevy of known and unknown risks, including injury and death. 

Without a robust tort system, there is little hope of holding the developers of those technologies accountable for risks they may know their products pose while pushing them to market anyway because their accountants have deemed them safe bets with the financial risk externalized to the public. (These are not small, scrappy start-ups; the financial barriers to entering emerging technology markets are such that most of them are subsidiaries of much larger, richer companies.)

The time has come to take a realistic look at who is helped and who is harmed by “tort reform” and act accordingly, especially now that revolutionary and history-altering technologies threaten to carry as-yet-unknown risks in addition to the known ones. Not only should we revisit and consider rolling back the tort reform measures that have succeeded, but we should also vigorously resist efforts to further erode citizens’, consumers’, and workers’ rights vis-a-vis government and corporate conglomerates. 

Tort reformers’ intent is to instill jealous, zero-sum thinking in the public so that when one person receives justice, others feel cheated. That isn’t how it works. 

When a plaintiff or group of plaintiffs win sizable damages, it is because a jury of their peers has found the defendant’s behavior so egregiously negligent that they have decided to teach the entity a lesson for devaluing people’s lives, health, or livelihoods. These verdicts serve as a check on corporate malfeasance, an impetus for firms to vigorously test their products, and an assurance to the rest of us that we can feel confident in the safety of our environment.

Multinational corporations, their insurers, and their attorneys are hard at work protecting themselves from liability by wildly misrepresenting torts such as the McDonald’s coffee case and similar suits through lobbying groups and PR firms in the effort to gain public support for “tort reform.” The public, unfortunately, needs to be just as diligent in protecting their basic rights as US citizens as corporations are in trying to limit them, and knowledge — in this case — is power.