Title: New U.S. Tort Litigation: To Go Warily Where No One Has Gone Before
Abstract: Courts now are being used by plaintiffs' counsel to change industry-wide practices, to enforce self-regulation and to extract large punitive damage awards IN YEARS GONE by, the purpose of tort litigation was to compensate deserving plaintiffs. That no longer is the only goal. Tort litigation in the United States now has several missions: to change the practices of one company or the practices of an entire industry, to force a company or an industry to engage in self-regulation, and simply to punish. These goals are being pursued by methods both old and new--class actions, parading the specter of punitive damages, lobbying legislators, and pressuring on investors and companies' stock. The transformation of U.S. tort litigation is the greatest challenge corporations, their officers and directors, and their insurers face in this decade. Can this phenomenon be explained? Let's try. IN THE BEGINNING: ASBESTOS The new face of U.S. tort litigation began to emerge with the crushing number of asbestosis lawsuits in U.S. courts. To resolve these cases on a mass scale, plaintiffs' counsel turned to class actions. Two of these sought to settle all asbestos-related litigation--Amchem Products Inc. v. Windsor(1) and In re Asbestos Litigation.(2) Their purpose was, in part, to address the unfairness and inefficiency of forcing plaintiffs to bring individual claims: The most objectionable aspects of asbestos litigation can be briefly summarized: dockets in both federal and state courts continue to grow; long delays are routine; trials are too long; the same issues are litigated over and over; transaction costs exceed the victims' recovery by nearly two to one; exhaustion of assets threatens and distorts the process; and future claimants may lose altogether.(3) These efforts failed because individual questions of law and fact, specifically the nature of each plaintiff's injury and the damages individual plaintiffs might claim, dominated in those two cases. Still, they encouraged others to bring class action suits in tort cases. Like the asbestos actions, these cases aimed to resolve all disputes at once. And, again like asbestos class actions, they seek to bring pressure on defendants to settle.(4) The asbestos litigation crisis saw the beginning of another trend in U.S. tort litigation--the call for a legislative solution. As the U.S. Supreme Court recognized in Anchem, class actions frequently are either inadequate or improper means to achieve a global settlement of a problem. Only an act of Congress, crafted after committee hearings and expert testimony, could do the job, it said: Real reform ... requires federal legislation creating a national asbestos dispute resolution scheme. Bills introduced in Congress recognize that individual asbestos suits, and even class actions, cannot deal with the asbestos crisis. For instance, H.R. 1293, the Fairness in Asbestos Compensation Act states: Asbestos personal injury litigation is unfair and inefficient, and imposes a crushing burden on litigants and taxpayers alike.... Litigation has not been able to provide compensation to claimants swiftly.... Unfortunately, mass consolidations [class actions] only serve to magnify the irrationality of a litigation system that awards massive amounts to the unimpaired while threatening the ability of seriously ill people to obtain compensation in the future. But a legislative solution to tort litigation often is difficult, if not impossible. The asbestos actions produced a third, but largely unrecognized, effect: they enriched several now-prominent plaintiffs' law firms, giving them the financial resources they needed to go on to other costly litigation. Many of the plaintiffs' counsel now on the national stage earned their first large verdicts and settlements in asbestos cases.(5) Finally, the asbestos litigation brought many plaintiffs' counsel together. …
Publication Year: 2000
Publication Date: 2000-10-01
Language: en
Type: article
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