Friedman Hit On Tort Reform

To The Editor:

In regards to Sam Friedman’s March 17 column, “A View From The Press Box” (“Tort Reform Caps Should Be Flexible,” page 25), I find comfort in the fact that someone else understands the impact of the pop culture on seemingly unrelated financial and political matters. It is a travesty that this is so, but that is another subject in and of itself.

However, I must disagree with some of Mr. Friedman’s thoughts on the subject of the premise that the threat of non-economic (pain and suffering) damage awards serves as an appropriate incentive to control corporations not acting in the best interests of the public.

In the first place, what is the real logic behind such awards? Why (and how) should individuals be paid legal tender for personal loss if they have already been reimbursed for any financial loss (plus a little traveling money, usually)?

How can one, in good conscience, possibly place a monetary value on the life of a relative? Is one life worth more than another, and who decides? This whole concept of punitive damages smacks of class warfare and in my view is patently and morally bankrupt.

I would like to address some of Mr. Friedman’s comments in his column [about the alleged detriments of legislatively limiting non-economic damage awards].

“Exactly who is being ‘protected’ by such [tort] reforms–those harmed, or those causing the harm?” The answer is neither, unless one includes among “those harmed” the real beneficiary of the reforms–the American economy and everyone other than those involved in lawsuits.

“If awards for pain and suffering are limited, are we trading deterrence for predictability?” This question assumes that this type of legal punishment is an appropriate deterrence, which I believe it is not.

“If contingency fees and damage awards are strictly limited, will injured parties be able to find high-caliber attorneys to take their case against powerful corporate and professional defendants?”

This is the standard personal injury attorney mantra, which is part of the class warfare mentality to which I refer. The answer, of course, is yes. There are plenty of talented attorneys who are more than happy to take on cases that have (the key term) “merit.” Only those without merit will suffer from the above concern.

I am also taken somewhat aback at Mr. Friedman’s framing of the proposition that there is abuse in the system. He says “perhaps” [there is abuse]. That is like saying the jury is still out on whether there was corruption in the Iraqi government.

While Mr. Friedman says, “we can’t ignore the fact that the tort system does impact the overall economy and society,” I don’t think he recognizes the full impact that it has had.

As far as I can tell, the business of lawsuit award profits are the only non-governmental transfer of money that adds absolutely nothing to the gross national product or the health of one or more persons. It is an anathema to the free enterprise system and does incalculable damage to the entrepreneurial ethic and investment incentive for ordinary Americans.

I personally know of potential investors who refuse to invest solely because of fear of legal expenses. This is economic insanity. It further encourages the entitlement mentality that has evolved in the past 40 years along with the development of the concept of petty jealousy and class envy.

Finally, although it seems Mr. Friedman grudgingly concurs that something might need to be reformed (“tweaked”), he seems to be more concerned that the “worst offenders” are not let off the hook.

As I said before, there are other avenues to use to make sure that these types of offenders are punished. There is simply no moral or ethical support for the notion that third parties should “profit” from the errors or omissions of offending entities.

Indeed, I would suggest that court-awarded damages for what is now defined as “pain and suffering” should automatically be diverted to legitimate charities instead of attorneys or their plaintiffs.

In any case, those of us in the insurance business would be well served to encourage the most aggressive reform initiatives. There are plenty of mediators on the opposite side.

Frank Timmins
Dallas, Texas

Reproduced from National Underwriter Edition, May 5, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.