Forbes: Restoring Sanity To the U.S. Tort System

An opinion editorial was recently featured in Forbes written by Cybex International’s President and COO, Arthur Hicks Jr.  This editorial titled: Restoring Sanity To the U.S. Tort System, highlights the major obstacles faced by companies in the U.S. to stay afloat with the extensive regulations and trial lawyers hungry to hit the “lawsuit lottery”.

An excerpt:

Much less discussed, however, are the billions of dollars of costs foisted on U.S. businesses by excessive – and in many cases, frivolous – litigation. Unless you’re a trial lawyer, most people know about the absurdity of our tort system. We’ve all seen the ads on TV for class action lawsuits, read about the woman who sued McDonald’s because her coffee was too hot. We’re also aware how medical malpractice lawsuits drive up healthcare costs for everyone.

And while we cringe at these examples of lawyers run amok, we rarely appreciate just how devastating their actions are to U.S. businesses. Simply put, frivolous lawsuits and excessive rewards are putting America’s economic recovery in danger.”

Hicks is no stranger to tort litigation, Cybex International recently settled a case with a Western New York woman for $19.5 million- down from a monumental $66 million, which would have been the largest settlement in western New York history.  In this case, the woman was using a piece of equipment incorrectly and sustained severe injuries.  The court ruled that this misuse was “foreseeable” and the liability fell on the manufacturer.

Arthur Hicks Jr. hits the nail on the head – frivolous litigation hurts consumers, taxpayers, and businesses and makes America less competitive in an increasingly global economy. Just how big is the impact? One recent study found that reforming New York’s civil justice system could create over 200,000 jobs. Who knew a little common sense could go so far?


One comment

  1. We can deplore the abuses of the parasitic and pernicious litigation industry. But instead of just seeing frustrating descriptions, I would like to see more coordinated and cooperative strategizing to achieve reforms. These could be led by those groups in a position to take meaningful action, such as business magazines like Forbes, the U.S. Chamber of Commerce (which has a significant reform initiative going), other organizations representing businesses, the AMA, hospital administrators, et al.

    To mobilize action on a larger scale so as to enlist legislators at state and federal levels, and put pressure on law schools to promote self-policing by the legal profession, research should be done to show why everybody in society, not just targets of litigation is affected by the hidden tax and chilling effects that litigiousness has imposed since it arose in the 1970s.

    For example, statistics apparently show that malpractice suits serve a very small fraction of medical patients with potentially legitimate grievances. The beneficiaries are often those most ready to seek large awards – not necessarily the most deserving. I have seen few research studies on whether lawsuits deter incompetence or undesirable behaviors.

    We know that many lawsuits today simply become “taxes” not only on corporations, but also schools, police departments and other public institutions. The situation is aggravated by the willingness of corporations and insurance companies to pay negotiated settlements over claims they regard as unjustified – to avoid tying up their resources in court battles.

    There is a complex but very real problem when litigation becomes the primary accepted remedy for incompetence or wrongful behaviors in society. This can deter more effective and constructive ways of dealing with problems.

    An inventory of the damage done by our present system must include inhibition of business and social initiatives due to legal risk; widespread loss of use of facilities including pubic property for fear of damage suits, and wholesale burdening of our law, commercial and penal systems, as well as Executive agencies with provisions regarding legal challenge and appeal. The U.S. Forest Service is partly paralyzed in meeting needs to inhibit epidemic disease and forest fires because it is continuously locked in legal battles.

    Besides the corrosive effect of litigiousness consider the misallocation of talent in U.S society. Nearly one million U.S. lawyers are said to be not far from equaling lawyers in the rest of the world. These individuals are among the brightest and best educated in American society. What would American society gain if instead of increasing domestic legal conflict, and costs for society, the talents of half or more of current lawyers would be turned to constructive activities?

    — By Observer on March 25, 2012

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