Kill All the Trial Lawyers

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Kill All the Trial Lawyers

If any elected official stood before Congress and proposed raising taxes for the average family of four by $3,380 per year, he or she would find himself voted out of office in the next election. Yet, that’s the amount of the hidden cost that Americans pay to support tort litigation in the U.S.

Every man, woman, and child pays an average of $845 a year in tort costs. Between 2000 and 2003, those costs soared by 35.4 percent. And it’s not just a recent phenomenon: The relentless rise of tort litigation expenses has exceeded the growth of the Gross Domestic Product by two to three percentage points for the past half-century.

To illustrate, think of the economy as a sprinter gaining speed with every step; now, imagine that same sprinter with a backpack filled with bricks strapped to his back. That will give you a sense of how the costs of wasteful, frivolous lawsuits create a drag on our economy.

According to a report issued by Jim Saxton, the vice-chairman of the Joint Economic Committee of Congress,1 the United States pays more than twice as much in tort costs as most industrialized nations. Research conducted by Tillinghast-Towers Perrin shows that the cost of such litigation in the U.S. went from $67 billion to $152 billion in the 10 years between 1984 and 1994.

The U.S. tort litigation system is not only expensive, it’s inefficient. It returns less than 22 cents on the dollar to repay actual economic losses to claimants, while the rest goes to lawyers and administrative costs. It doesn’t help that, according to the Washington Times,2 some attorneys are now charging fees at a rate of $30,000 per hour. How can a system that costs so much, and does so little, continue to exist?

The answer is that the tort bar has become “a beneficiary of pork barrel politics at best” and “an enormous criminal enterprise at worst,” through a system of perverse incentives. To illustrate, consider the high-profile example of Vioxx, the painkiller made by Merck.

In September 2004, Vioxx was linked to heart attacks and strokes. Smelling profits, lawyers filed more than 10,000 lawsuits against Merck. In one of those cases, a jury awarded $253 million to a Texas woman whose husband died of a heart attack while taking Vioxx. That is equivalent to earning more than $6 million a year for 40 years. Not surprisingly, an entire industry sprang up to milk these cases.

The Vioxx case is reminiscent of the lawsuits against makers of asbestos, which began when scientists in the 1970s linked the fire-retardant material to various diseases...

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