A successful New York plaintiff's attorney drives his $145,000 Ferrari F50 down the streets of Manhattan with a bumper sticker under his license plate saying "ALL YOU NEED IS AN ACCIDENT AND A DREAM. " Living in a luxurious mansion just outside of Westchester County, this attorney, who manages a successful liability practice, flamboyantly advertises on television the slogan, "If you've been hurt in any kind of accident, you may be entitled to a large cash reward. " This slogan catches the eye of a woman who telephones this attorney to explain the injuries that she had recently suffered.
A year later, a Bronx jury awards $4. 2 million in damages to the woman who sued New York City after she slipped on a snowy sidewalk and damaged a knee joint while chasing her dog. We have all heard the outrageous stories about the woman who spilled coffee on herself and won millions or the doctor who won millions because his BMW had a bad paint job. Lawsuit abuse is a major problem in our society and an enormous drain on the U. S. economy. In the last 20 years alone, tort fillings have risen 60 percent. There is a tremendous need to reform America's tort system because it is currently not working.
While some progress has been made on legislative tort reform, there is still a great need for more. In 1994, there were over 815,000 new tort cases filed-that's a new case every thirty-nine seconds. It comes as no surprise that last year, all persons suing, including victims with legitimate injury cases, were forced to wait an average of 65 months to go to trial- 15 months longer than in 1990. Because the courts are over crowded with frivolous liability lawsuits, those with legitimate cases are forced to wait years.
Lawsuit liability abuse is strangling the American justice system because all of the courts are clogged with meritless lawsuits. Most personal injury lawyers take cases on a contingency fee basis, collecting one-third or more of jury awards. Under this system, plaintiffs' do not have to pay anything to file lawsuits. With nothing to lose, some people abuse our legal system by filing frivolous lawsuits in an attempt to get their hands on large cash compensations, delaying justice for those who truly deserve it. American consumers have to pay thousands of dollars in hidden costs as a result of the tort system.
Businesses raise prices to cover their costs of hiring lawyers, fighting lawsuits and paying out excessively large awards as compensation for punitive damages. Here are just some examples of how the hidden lawsuit tax raises the price of consumer goods: -$100 of a $200 football helmet covers liability insurance -$20 of a $100 step-ladder covers liability insurance -$3000 of an $18000 pacemaker covers liability insurance -$170 of a $1000 of a motorized wheelchair covers liability insurance -$500 of a $3367 of a maternity stay covers liability insurance -$191 of $578 for a doctor's fee for a tonsillectomy covers liability insurance Lawsuits cost the average consumer up to $1200 per year.
For instance, an estimated $20 billion a year is spent on unnecessary medical testing procedures to protect doctors and hospitals against malpractice claims. Product liability and litigation concerns have led several companies and laboratories to postpone or cancel altogether their testing of promising AIDS vaccines. In the 1970's, there were thirteen U. S. -based pharmaceutical companies conducting research in fertility and contraception.
By 1988, there was only one because of the threat of liability claims. These examples demonstrate that lawsuit liabilities dampen needed scientific innovation and research. This damages America's future. Harvard Business School found that innovation is the key to success in global markets and that in the United States, "lawsuits are so extreme and uncertain as to retard innovation. " With an average of 40,000 product liability lawsuits filed in the United States every year, analysts predict that almost 90 percent of U. S. manufacturing companies will be sued at some point, with significant costs to the U.S. economy.
Their study found that 47 percent of United States companies withdrew products from the marketplace and 39 percent decided not to introduce new product lines because of fear of lawsuits. Would American society have benefited from these new products? We will never know. The disturbing facts concerning America's tort system cry out for the need for reform. The United States has made itself the lawsuit leader in the world. The U. S. has 30 times more lawsuits per person than Japan, and 20 times the number of lawyers.
There are 40,000 product liability lawsuits in the United States annually, and only 200 in the United Kingdom. If the United States continues to tolerate extreme lawsuit liabilities the future will be less prosperous in every aspect. Nearly everyone is hurt badly by the lawsuit abuse crisis. Consumers and small businesses are hit the hardest. Reflecting the regressive impact of the so called "liability tax," a recent survey found that 55 percent of small business owners in New York State rated liability and legal costs as a "very serious" or even "extreme" problem for their firms.
More than 69 percent said a lawsuit of any kind would cause a significant disruption of their business, and nearly three out of four small-business respondents said liability concerns had forced them to raise costs of their products and services. Fear of lawsuits reduces the volunteer workforce on which organizations and many disadvantaged citizens depend. The current civil liability system undermines personal responsibility. Spill hot coffee on your lap? Sue the company that made you the coffee.
Your kid misses a pop fly and bruises his face? Sue the volunteer Little League coach. Lawsuit abuse affects virtually everyone, no matter how selfless their work or how important their mission. Victims include the Girl Scouts and the Little League. Girl Scouts in the metro Detroit area must sell 36,000 boxes of Girl Scout cookies each year just to pay for liability insurance. The Little League has seen its insurance premiums skyrocket over 1,000 percent in a recent five-year period.