Reno Hayek Symposium

As a young lawyer I tried cases and briefed and argued appeals under the then president of the American Trial Lawyers Association, a great mentor and fine, old-time attorney. His firm specialized in plaintiffs personal injury law; its expertise in this speciality, garnered referrals from numerous other attorneys in the Midwestern US. These negligence cases had “contingency fees” ranging from 33-50% of the amount recovered from the defendant’s insurance company, whether insuring a negligent driver or negligent doctor, the negligence was for the jury to determine after suffering through the “skill” of the attorneys presenting the case. As a hot-shot young lawyer I was lucky to get the job and the first in my law school graduating class to get in front of a jury. The young guys got the “crap” cases in the office. I was lucky to have a .500 batting average with these crap cases in my first year as a trial lawyer. I was luckier to participate in the so-called “intellectual” side of the profession in briefing and arguing cases before the state appellate and supreme courts and the federal court of appeals. Despite the money and promise for more, I was most lucky to learn that this side of the law was not for me. I got out!

While the plaintiffs bar can legitimately claim some past social progress in reforming industrial America to reasonable workplace safety and moral standards, it can no longer justify the social and economic costs of its existence. The “contingency bar” now finances lawsuits, “securities strike” suits, “asbestos” suits, and “whatever suits.” These class action type suits generate tremendous contingency fees at little or no risk for the cost of the litigation which is borne by the true beneficiaries, the trial lawyers.

In medical malpractice the costs to society include not only the excess insurance premiums, the excess medical fees, the excess hospital fees but also the excess costs of “defensive medicine,” that is ordering unnecessary tests to cover any potential medical liability no matter how remote. And all those latter costs, defensive medicine costs, include expenses of labor, equipment, administration and profit. These are not a small amount.

In total all contingency litigation costs, in general negligence, in automobile negligence, in medical malpractice, and in securities strike litigation, amount to a staggering tax on our economy and our society.

This is particularly relevant today with the current push for Obamacare. Our young president knows that his smallest voting group is the largest funding group, so he is willing to sacrifice logical solutions to get money so that he can continue, with Pelosi, Reid and the rest of his leftists, to bamboozle the American public. The trial lawyers seem to own this disingenuous young man.

As Kimberley Strassel in the September 11th WSJ op ed says of the 11 Republican senate committee proposals to limit the trial lawyers, “on a party line vote, Democrats killed every one.” “The tort-reform issue has instead clarified this presidency. Namely, that the new-politics president still takes orders from the old Democratic lobby.” A sad situation for America!

Tom Motherway, tom@renohayek.com