Infested With Sharks
THE LA WSUIT LOTTERY
by Jeffrey O'Connell '51 Free Press, 1979. 271 pp. $10.95
Professor Jeffrey O'Connell of the University of Illinois Law School is a co-founder (along with Professor Robert Keeton of Harvard Law School) of the no-fault movement, and he is also its St. Paul. He proselytes for it through articles, speeches, testimony before legislative committees, and he has gained a host of converts. His ideas, very persuasively expounded in The Lawsuit Lottery, deserve the attention of everyone who may cause or suffer personal injury which means all of us.
The common law's solution of the problem of compensating accident victims is based on the concept of fault. If some trier of the fact, usually a jury, finds that A's fault usually negligence caused harm to B, and that B's fault was not a cause of his own injury, A must pay B money in an amount sufficient to com- pensate him for his medical expenses, lost earn- ings, and "pain and suffering," both those already experienced and those which the jury thinks will probably occur in future. If both are at fault, or neither is, the law leaves the injury where chance put it. (In many jurisdictions to- day "comparative negligence" is the rule; if plaintiffs negligence is less than defendant's, he is not totally barred, but his recovery is propor- tionately reduced.) In fact, of course, the real defendant is generally an insurance company (uninsured drivers are almost always judgment- proof), and the vast majority of cases are com- promised out of court, the amount of the settle- ment being based on the contending lawyers' guesses about what a jury a notoriously un- predictable body of men and women might do.
The evils of the system are obvious and have been perceived for at least half a century. To mention some of the most blatant inefficiencies, it is exceedingly difficult, even with the benefit of expert witnesses (who usually contradict each other), to say what the future effects of an injury will be in terms of medical costs and lost earnings; the plaintiff may get well in a few months, or he may be paralyzed for life. The court, under a rule dating back to Queen Anne's day, although (unlike the good queen) it is far from dead, cannot order the defendant to pay the plaintiff so much a month so long, and only so long, as he remains incapacitated. (Sometimes, however, such deals are struck out of court.) If it is hard to guess future damages, it is almost impossible to put a price tag on pain and suffering, especially "mental anguish." The United States District Court for the Southern District of New York once held that sailors who floated around in shark-infested waters for several unpleasant hours were entitled to $3OO an hour, but the Circuit Court thought $l5O an hour was about right. Neither court explained how it reached its figure. (I have suggested to my Torts class that a worthwhile research pro- ject would be to rent Yale's practice pool, fill it with sharks, and see how high the hourly com- pensation would have to rise before students would volunteer for a swim.) What is adequate compensation for blindness, or disfiguring mutilation, or paraplegia? Some verdicts in such cases have run into millions bankrupt- ing manufacturers who could not afford in- surance, or raising insurance premiums to new heights, without really compensating the vic- tims.
Fault litigation clogs judicial calendars: In some places, if the claim cannot be settled, the case may take several years to reach trial by which time the witnesses may have a hard time recalling what actually happened.
The system is remarkably inefficient as a means of compensating victims. Often, par- ticularly when the driver is uninsured, the vic- tim gets nothing at all. Sometimes he is grossly overcompensated by a sympathetic jury. But win, lose, or draw, counsel will subtract about a third of the recovery before anything goes to his client. And the client may have to bear his losses for several months or years while the case winds its tortuous way through the legal process.
As O'Connell amply demonstrates, the real winners are the lawyers. Plaintiffs lawyers get the most many of them have much larger in- comes than Wall Street senior partners but the insurance company's counsel aren't work- ing for their health. The upshot is that it takes about $2.25 in insurance premiums to get a dollar to the actual sufferer.
At the turn of the century, a similarly in- tolerable situation in the compensation of workers injured in industrial accidents, then the commonest kind of personal injury litigation, produced the Workmen's Compensation Acts which now exist in every state. They make the employer liable regardless of fault but limit compensation to actual medical expenses and lost earnings, with no salve for pain and suffer- ing, and no counsel fees. (In recent years, with the introduction of strict liability for injury caused by "defective" products, the victim's lawyers have learned to look for somebody other than the employer to sue e.g., the manufacturer of the machine that caused the misfortune.)
O'Connell wants similarly to eliminate fault and counsel fees from the system of compensa- tion for personal injury originally only in automobile accidents, but he thinks today the idea could advantageously be extended to such other areas as medical malpractice and manufacturers' and distributors' prod liability. In a nutshell, compulsory paid for either by the potential plaintiff or th' potential defendant, would compensate a virt for the first $lO,OOO-550,000 of out-of-pocT losses from medical expenses and time 1 ? from work. Only to the extent that his damage- exceed the policy limit can he resort to h common-law remedy. No more pain and suffa ing and no more right to recover his damage" twice once from his own Blue Cross or othe- insurance and again from the negligent defe" dant. No more wild guesses about future damages the insurer pays for losses as they accrue and stops paying when the insured recovers. With no need for lawyers to litigate fault, to ply juries with tear-jerking rhetoric and no astronomical awards for pain and suf- fering, the costs of insurance drop dramatically
That is the idea, and it ought to work. It has worked where it has had a chance. But generally state legislatures have drafted no- fault statutes in such a way that they actually increase the cost of compensation. The favorite technique is a provision that a plaintiff whose medical expenses exceed a fairly low threshold $lOO in New Jersey, $5OO to $l,OOO in other states retains his common-law remedy, in- cluding damages for good old pain and suffer- ing. Obviously it is not hard in these times to rack up sufficient medical bills a day or so in the hospital will do it. In short, trial lawyers in most states are disproportionately represented in the legislature, are generous campaign con- tributors, and can usually block any legislation threatening to break their rice bowls. It is significant that Michigan, whose no-fault statute is one of the very few that work, has for some reason an unusually low percentage of lawyers in the legislature. O'Connell does full justice to the Association of Trial Lawyers of America, who for some reason do not love him.
Look at your last bill for liability insurance.Then read the book. Then write your staterepresentative and your Congressmen, forfederal legislation may be needed.
Joseph Bishop is Richard Ely Professor of Lavat the Yale Law School.
