Our legal system protects us all from injury and disease, whether or not we ever go to court. This is because the prospect of “tort” liability deters manufacturers, polluters, hospitals and other potential wrongdoers from repeating their negligent behavior and provides them with an economic incentive to make their practices safer. This phenomenon is not a fabrication invented by attorneys. It has been recognized and documented by everyone from conservative economists like Richard Posner, to Rand’s Institute for Civil Justice, to William L. Prosser, the father of modern tort law. (Just ask any first year law student.)
Imagine the amount of money the civil justice system actually saves the economy in terms of injuries and deaths that are prevented due to safer products and practices, wages not lost, health care expenses not incurred, and so on. Weakening the tort system with laws like "caps" on damages lessens this deterrence function, makes corporations more unsafe and costs us all more money. Pretty basic.
To say this message is often lost in the current political discourse about the tort system is a bit of an understatement. More like its been ground down, chewed up and spit out into something not quite recognizable anymore.
To wit, in Tennessee, a new law goes into effect this week that will "cap" damages and severely limit the legal accountability of nursing homes for abuse and neglect, which comes,
[J]ust a couple of years after the legislature in 2009 vastly reduced oversight of the 325 nursing homes in the state by eliminating regulations mandating that nursing home operators file detailed reports on adverse events affecting patients. Also eliminated were requirements that the state investigate those incidents. Officials said the change was needed so they could spend their time investigating more serious complaints.
Yeah right. According to the Tennessean newspaper,
A report issued this year by the U.S. Government Accountability Office gave the state Health Department failing scores for its performance in investigating serious complaints against nursing homes. It said there was a backlog of cases that had gone uninvestigated, and it cited a staff shortage as a factor.
Really, the last thing Tennessee should have done is block the critical last line of defense against unsafe nursing homes – the tort system. Yet that’s just what they did. The paper reports,
The new limits on lawsuits could shut down yet another avenue of complaints — the courtroom. Plaintiffs’ lawyers candidly admit that the new caps will keep many nursing home malpractice claims from ever getting to court, in part because lawyers will be less inclined to take the cases. … Tennessee nursing homes already rank near the bottom nationally in two key areas of care, according to federal data. Without the threat of lawsuits, some attorneys and advocates think, it will sink even lower.
Meanwhile, in another area of the country, Michael A. Cardozo, New York City’s corporation counsel, is calling for, among other things, “caps” on compensation for people killed or injured due to negligence in city hospitals and for other city misconduct - in order to save the city money.
As we’ve noted, the largest portions of total payouts against the city have always been for police misconduct and horrendous preventable injuries – brain damage, blindness, etc – due to negligence in city hospitals. Patient safety efforts in city hospitals remain abysmal and they promise to only get worse now that all hospitals in the state will no longer be accountable for causing brain damage in newborns. Why on earth would the city want to reduce payouts by cutting off people’s legal rights, further weakening the deterrence function of the tort system leading to even more unsafe hospitals, and to accompanying increases in cost and physician utilization inherent in caring for newly maimed patients?
And here’s the biggest irony. Reports the New York Times,
… Mr. Cardozo also pointed to the city’s own use of lawsuits to generate revenue, as well as defenses that have helped the city to protect its finances.
The city, for example, won a $104 million verdict against Exxon Mobil for allowing a gasoline additive to infect groundwater in Queens, Mr. Cardozo said. It also won $9.5 million from Amtrak for failing to reimburse the city for the cost of fixing two bridges, he said, and $8 million from the state for improperly charging the city for Medicaid expenditures.
The deterrence function of the tort system isn’t the only thing lost on Mr. Cardozo. His own hypocrisy seems lost as well.