As was pointed out in yesterday's Wall Street Journal Blog , the possibility of a tax break for plaintiff's lawyers has set off a huge amount of hand wringing among so called tort reformers. Ashby Jones, the author of the WSJ Blog post, provided this quote from Victor Schwartz, general counsel of the American Tort Reform Association.
“Those who practice plaintiffs' lawyer work learn quickly that it is a business similar to other capital businesses. Capital is placed at risk and a judgment is made whether or not it will bring a profit. Today the costs of litigation act as a curb against marginal and frivolous litigation. This is what makes the plaintiffs' lawyers' tax proposal of such great practical importance. While one cannot calculate it mathematically, having the federal government bear 40% of the initial costs allows plaintiff's attorneys to take more cases with higher risks. The result to industries targeted by plaintiffs' lawyers will be staggering.”
This is no more than uninformed, pro-business propaganda, which means that out in tort “reform” land, it is business as usual. What Mr. Schwartz conveniently omitted from his rant is that the bills underlying this possible tax break have bipartisan support (as Ashby Jones notes in the post). That's right, folks. It hasn't been railroaded through by those Democrats who are so obviously bought and paid for by the trial lawyers. What Mr. Schwartz was a little more forthcoming about was his lack of knowledge about how much of a break this will turn out to actually be. Though he manages to throw around an inflammatory phrase mentioning the federal government's bearing 40% of the plaintiff's lawyers' initial costs, he also acknowledges just beforehand that “one [presumably, Mr. Schwartz included] cannot calculate it [the amount of tax benefit] mathematically.” If that's true, what prompted Mr. Schwartz to open his mouth and come up with the 40% figure?
I will tell you what did it. Tort reformers have a reflexive and negative reaction to anything that might benefit plaintiffs and their attorneys. And this is a very frightening thing to behold, given that most of corporate America will latch onto anything tort reformers say, since tort reform, in most cases, favors protecting business interests over the rights of individuals. But what is frightening and amusing at the same time is how after all these years, Mr. Schwartz and his ilk still carry around a fundamental misunderstanding about what plaintiff's lawyers do.
Mr. Schwartz fears that giving such a tax break to plaintiff's lawyers will allow them “to take more cases with higher risks,” and “[t]he result to industries targeted by plaintiffs' lawyers will be staggering.” This all gets back to the popular myth that plaintiff's lawyers have stripped the American financial cupboard bare by profiting from “frivolous lawsuits.” You know, the ones that have no merit to them, yet somehow compel jurors to throw boatloads of money at undeserving victims?
Let me take a moment to educate you, Mr. Schwartz, and if your fellow reformers are reading along, so much the better. The last frivolous cases I heard about were the Staten Island girl who fell into a manhole while texting, and now wants to sue Con Ed; and the judge who repeatedly sued his dry cleaners for hundreds of thousands of dollars over a pair of ruined pants. Otherwise, they don't exist. The reason they don't is that even the most desperate plaintiff's lawyer in the country has to invest in his case. That money comes from the lawyer himself, so he is going to be careful about how he spends that investment. In the case of a medical malpractice case of any moment, a lawyer may spend tens of thousands, even one hundred thousand dollars or more, to prosecute it–all from his own pocket. Think about the costs: filing of court documents; deposing witnesses; obtaining medical records that sometimes fill the spare office; hiring expert physician/witnesses, sometimes up to 5 or more in a single case; research and writing; travel expenses; phone calls; interpreters; and this is just in a typical case. Do you really think that any lawyer in his right mind would spend that kind of money, and time and effort (typically 3 years of court appearances, discovery, settlement negotiations and/or trial) if he did not have a solid case with which to work?
And of course, what you will never hear about from the mouth of a tort reformer is that often, after all that money and time has been invested in these meritorious cases, there is nothing to show for it. Most medical malpractice cases that go to trial in the U.S. still result in the defendant's favor. The victim of the negligence or the malpractice gets no compensation for his injuries (or death), and the lawyer for that victim suffers a substantial financial loss.
So, the entire idea of “frivolous lawsuits” is a red herring that the tort reformers continue to use in an effort to frighten the American public into granting even more protection to those that need it least-corporate America. I think Mr. Schwartz knows it, too. But you've got to have a little sympathy for him. Everybody's got to make a living, you know.