Lawsuit Abuse-One Down Two to Go
By Tom Cole
March 29, 2005
When the 109th Congress convened this year, one of the first items we began to tackle was the litigation explosion in America that is clogging our courts and threatening jobs across America. The costs of litigation per person in the United States are far higher than in any other industrialized nation in the world. Lawsuit costs have risen substantially over the past several decades, and much of the costs go to paying lawyers' fees and transaction costs - not to the injured parties. These costs will continue to put a handicap on our economy unless true reform is implemented. This year Congress is concentrating on three areas of lawsuit abuse reform-class action lawsuit reforms, medical liability reform and asbestos litigation reform. Within the first month of the 109th Congress, both the House and the Senate passed class action reform, so it is now one down and two to go.
Last month the President signed into law the Class Action Fairness Act, a bipartisan plan that makes common sense reforms to prevent the misuse of class action lawsuits. Class actions are an important part of the U.S. legal system. However, class actions are heavily abused which in turn harms affected parties and undermines the American judicial system. In particular, in these types of lawsuits, injured parties often receive awards of little or no value while lawyers receive large fees. The Class Action Fairness Act offers a solution to the class action abuse by making it easier for plaintiff class members and defendants to move multi-state class actions to federal court, where cases involving multiple state laws should be heard. The Class Action Fairness Act will also establish a bill of rights for the consumer, including greater judicial scrutiny of settlements that provide class members with mere coupons as relief for their injuries and prohibiting settlements in which class members suffer a net loss. These reforms do not alter the right of a plaintiff to bring a legitimate claim, or change controlling substantive law, but provide additional protection and information to class members.
The next lawsuit reform item on the list for the 109th Congress is medical liability reform. Because of the current medical liability system, 43 percent of practicing medical doctors say they have considered leaving the field. Frivolous lawsuits and excessive jury awards are driving many health care providers out of communities and forcing doctors to practice defensive medicine. This reduces access to medically necessary services and raises the costs of health care for all. The HEALTH Act, which I am co-sponsoring, will help reduce frivolous and time-consuming legal proceedings against doctors and health care providers, while making healthcare more affordable for all Americans. Last year we were able to pass this legislation in the House but it failed to pass in the Senate.
Another issue that needs to be addressed this session is asbestos reform. Asbestos is the longest-running mass tort litigation in U.S. history. It has forced many companies into bankruptcy and has been the cause of more than 50,000 lost jobs. The current system is costly to administer (future transaction costs are estimated at between $145 and $210 billion), will impose indirect costs on the economy, has driven exposed defendants into bankruptcy and may leave little or no funds to pay future asbestos victims. Within the past few years, there have been sharp increases in the number of asbestos claims filed annually. It is time for Congress to act. A series of bills have been introduced in previous sessions of Congress to address this issue. This year we will continue to work toward a bipartisan solution. I am supportive of efforts to limit litigation costs for victims and consumers, while also making sure that justice is served in an expeditious manner for those who have meritorious lawsuits.
I am very pleased that we have already made tremendous progress toward lawsuit abuse reform, and am looking forward to continuing that success in both asbestos reform and medical liability. I believe these issues, if reformed, will have a tremendous positive effect on our economy.
http://www.house.gov/apps/list/hearing/ok04_cole/lawsuitonedown.html