COMING SOON TO WRECK AN ECONOMY NEAR YOU...:

Edwards and the Problem with the Trial-Lawyer Lobby: You don't have to be a fan of corporate fat cats to be concerned that under a Kerry-Edwards administration, tort rules might become even more damaging to our economy. (Stuart Taylor Jr., 7/13/04, Atlantic Monthly)

Kerry and Edwards will be even more beholden than previous Democratic tickets to an ever-more-potent trial-lawyer lobby dedicated to that peculiar form of income redistribution that serves mainly to make the richest lawyers richer. And Edwards talks like a man who believes that the solution to every misfortune is to find a deep-pocketed villain.

I don't know whether the Kerry-Edwards dependence on the trial-lawyer lobby would be worse for the country than the Bush-Cheney fealty to scandalously overpaid corporate kingpins and a myopically anti-lawsuit, anti-regulation, anti-tax ideology. And I am aware that the "greedy trial lawyer" moniker that some attach to Edwards is as crude a stereotype as the "greedy corporate plutocrat" label that others hang on Dick Cheney.

But the symmetry is a bit false. Contrary to the media-fostered myth that trial lawyers are the scourge of the corporate plutocracy, their lawsuits have virtually no impact on overpaid corporate executives or malefactors such as those who conspired to hide the deadly dangers of tobacco and asbestos. Rather, the $230 billion-plus consumed annually by the lawsuit industry (according to the best available estimate) ultimately comes from the pockets of the same ordinary Americans whom the trial-lawyer lobby purports to champion—to the tune of more than $3,000 in higher prices and insurance premiums per family of four—as well as from small businesses, doctors, city governments, school systems, clergy members, Little League coaches, and many others.

This is not to deny that honest trial lawyers perform two essential functions: compensating injured victims of unsafe conduct, and deterring such conduct by visiting the costs of injuries on the economic interests that cause them. The problem is the overly broad liability rules created by state and federal judges and legislators at the behest of the trial-lawyer lobby. These rules long ago veered from giving victims a fair shake to rewarding abusive and unwarranted lawsuits. And the trial-lawyer lobby reflexively trashes every serious legislative move to combat the abuses.

A leading example is the inexcusable effort by Edwards and most other Senate Democrats to derail the class-action legislation now before the Senate. It would make much-needed changes in a system that often operates as an "extortion racket ... in which truly crazy rules permit trial lawyers to cash in at the expense of businesses," in the words of a Washington Post editorial. And the proposed remedy—moving cases with nationwide impact to federal courts, in order to stop forum-shopping lawyers from exploiting connections to friendly state judges who help them pocket millions while their clients get coupons—is eminently fair to consumers.

Nor has Edwards shown any sign of supporting efforts to reform the multibillion-dollar asbestos litigation system, which has reaped huge rewards for big Kerry-Edwards backers such as Fred Baron of Texas, a former finance co-chair for Edwards who is now a big Kerry-Edwards fundraiser. The asbestos litigation has evolved over the past three decades from a laudable push to compensate thousands of people with asbestos-induced cancers and other diseases into "a malignant enterprise which mostly consists of a massive client-recruitment effort that accounts for as much as 90 percent of all claims currently being generated, supported by baseless medical evidence which is not generated by good-faith medical practice, but rather is primarily a function of the compensation paid, and by claimant testimony scripted by lawyers to identify exposure to certain defendants' products."

This stunning indictment is copiously documented in a 137-page investigative article in January's Pepperdine Law Review by professor Lester Brickman of Cardozo Law School. He is the leading critic of the 50,000 to 100,000 asbestos-related injury claims now being filed each year on behalf of people who, Brickman says, "have no discernable asbestos-related illness or impairment" in more than 80 percent of the cases.

But even apart from asbestos, tort litigation as we know it is appallingly inefficient: Only 22 percent of the more than $230 billion in estimated annual tort system costs goes to compensate alleged victims' economic losses, according to Tillinghast-Towers Perrin, an actuarial firm; almost as much (19 percent) goes to the plaintiffs' lawyers; another 14 percent goes to legal defense costs; 24 percent goes to payments for non-economic losses, mainly pain and suffering; and 21 percent goes to tort insurance overhead costs. Then there are the indirect costs, including an estimated $50 billion to $100 billion in unnecessary "defensive medicine" tests, and many thousands of lost jobs at more than 60 companies that have been bankrupted by asbestos lawsuits.

Stuart Taylor, as always, tough but fair.

Posted by Orrin Judd at July 13, 2004 9:46 PM