Law, disorder in tort system

Insight on the News, Oct 15, 2002 by Jennifer G. Hickey

During a Sept. 17 colloquy among Senate Democrats about which national priorities will receive attention during the final days of the legislative session, Sen. Debbie Stabenow of Michigan faulted inaction by the Republican-controlled House of Representatives on the Senate-passed bill to provide prescription drugs to the elderly. "[R]ight now--in fact, right now, as we are here--there are people who are watching C-SPAN 2 saying: `Do I eat today or buy my medicine?'" she declared. No one suggested it might make more sense for anyone facing such dire economic decisions to cancel their cable subscriptions rather than go without food or medicine.

The evaluation of priorities in the Senate has become a Bedlam of such ersatz alarms and confusions. If the list of unaddressed judicial nominations and legislation is any indicator, one might even have to conclude that the priority of the Democratic leadership in the Senate is not how to address the domestic or national security and concerns of the American people but how best to do the bidding of the American Trial Lawyers Association (ATLA).

With few clays or nights available on the calendar before Election Day, a number of important bills sent to early senatorial graves or banished to conference-committee purgatory by Senate Majority Leader Tom Daschle (D-S.D.) and the dedication of the special interests. Preventing a compromise agreement on a patients' bill of rights is the issue of when and to what extent patients will be able to sue their health-plan providers, while election reform languishes in conference largely because of a dispute concerning whether related lawsuits will be assigned to federal as well as state courts.

Despite the economic shock resulting from the Sept. 11, 2001, terrorist attacks, even the important terrorism-insurance bill (HR 3210) has yet to escape conference--helpful if a bad economy makes good politics for Democratic candidates. At the end of October 2001, a bipartisan group of senators tasked to find a compromise announced that a deal had been brokered to allow all legal claims against private and public defendants to be consolidated, without punitive damages, into a single federal court. Daschle, however, prevented the Senate Banking Committee from marking up the agreed-upon deal after trial lawyers objected to provisions restricting the claims for punitive damages.

Addressing the U.S. Chamber of Commerce recently, Bush economic adviser Lawrence Lindsey noted that "more than $10 billion of construction projects have been delayed or cancelled" and "hundreds of thousands of jobs are being sacrificed in defense of punitive damages." Stipulating that a "properly administered" tort system adds to the "efficiency and fairness of markets," Lindsey asserted that the tort system's current inefficiencies and contortions are harming both the economy and the American people.

According to an April 2002 report by the President's Council of Economic Advisers (CEA), annual direct costs are estimated at nearly $180 billion, or 1.8 percent of gross domestic product (GDP), distinguishing the U.S. tort-liability system as the most expensive in the world. Direct costs include awards for economic and noneconomic damages, administration, claimants' attorney fees and the costs of defense. In real terms, the cost amounts to nearly $650 for every citizen of the United States, a recent Joint Economic Committee report states. The figure is more troubling considering that only 20 cents of each dollar actually go to claimants for real economic damages, such as lost wages or medical expenses. And, according to a 2002 study conducted by the actuarial firm Tillinghast-Towers Perrin, an additional 22 cents goes toward noneconomic damages.

Matters of wealth, as well as health, also have been victims of the obstructionists. With policy experts debating the efficacy, means and wisdom of distributing the smallpox vaccine to the population, the already-existing problem of a shortage of childhood vaccines is an issue the Senate Health, Labor and Pensions Committee has at least started to address. At a late-September hearing, Janet Heinreich of the General Accounting Office (GAO) testified that production problems, unanticipated demand and the removal of the preservative thimeresol all contributed to the shortages of tetanus and diphtheria vaccines. Heinreich said the National Vaccine Advisory Commission had identified several strategies for preventing future shortages, including streamlining the regulatory process and strengthening liability protection for manufacturers.

Considering that five of the eight recommended childhood vaccines have only one manufacturer, interruptions in delivery could become even more problematic and dangerous.

According to committee spokesman Jim Manley, progress has been made in moving the Improved Vaccine Affordability and Availability Act (S 2053) to the Senate floor. Manley says most of the issues involving injury compensation and liability have been worked out, but concerns about ongoing litigation involving thimeresol have to be addressed. He would not address the precise disagreement but says he is optimistic a deal can be reached. Exactly how the committee then would proceed is unclear, he adds.