July 25, 2004

Generalizations Put Inaccurate Spin On 'Frivolous' Lawsuits
by Robert F. Gonderman, Michiana Point of View
 

I am an attorney who has practiced in the field of personal injury law in our community for the past 19 years. While no legal system is perfect, ours remains the envy of the world. I can say with confidence that our jurors and judges are conscientious and work hard at arriving at fair and balanced judgments.

I would like to respond to U.S. Rep. Chris Chocola's recent Michiana Point of View (July 14) regarding "frivolous suits."

Personal injury cases provide two critical functions for our society.

First, they hold individuals and corporations accountable for their actions.

By requiring that people and businesses act responsibly, we make everyone safer. We save lives. We protect our children. According to the Consumer Federation of America, approximately 6,000 deaths and millions of injuries are prevented annually due to the deterrent effects of our product liability laws.

Early product liability cases forced the pharmaceutical manufacturers to use child safety caps on medicines. Over the years, countless thousands of children have been saved from needless death and injury.

Second, personal injury cases help to fairly compensate people for the losses they have incurred as a result of another's fault.

No one wants to see himself or herself as an injury victim. However, imagine that you are driving late at night on a country road. A truck crosses the center line. There is nothing you can do to avoid the collision. You are off work for six months. You lose your leg. You incur more than $75,000 in medical expenses. Wouldn't you want to be treated fairly? Wouldn't you want to be compensated for your loss? Wouldn't you want your family protected? How many of our families can survive even eight weeks without a paycheck?

Chocola claims our courts are bombarded with "frivolous" lawsuits. While I disagree with the majority of the statements he makes, there is no question that some frivolous lawsuits are filed by plaintiffs. There are also frivolous defenses asserted by the insurance carriers who control the defense of civil lawsuits. Such frivolous claims and defenses are quickly weeded out of the system by a process known as a summary judgment.

Further, there already exist laws which allow costs and attorney fees to be assessed against those parties who make truly frivolous claims and defenses. Indiana Code 34-52-1-1 allows a judge to assess costs and attorney fees if the judge finds that a claim or defense is frivolous. Rule 11 in federal court plays a similar role. The key to both of these rules is that they require that the claim or defense be found frivolous by a judge.

Sanctioning frivolous claims and defenses is not what Chocola proposes. His proposed "Legal Expense Equity Act" is really what is known as a "loser pays" bill.

It is a long-established rule of American jurisprudence that each side pays its own attorney fees. This keeps the halls of justice open to all. Chocola's bill is designed to subvert this well-established provision of civil justice to the benefit of large corporations and insurance companies. Here is how it works:

The vast majority of civil cases are settled without a trial. The cases that actually proceed to trial are those where there is a genuine factual dispute about either the liability of the parties or about the nature and the extent of the injuries sustained. A jury or a judge is required to resolve these legitimate factual disputes and to arrive at a reasonable award of damages.

Assume that a person is injured in a motor vehicle collision. The case is strong but not absolutely certain. The plaintiff has a 70 percent chance of prevailing at a trial but also has a 30 percent chance of losing. This is not a frivolous lawsuit. Rather, the uncertainty is caused by different perceptions by different witnesses to the collision. The injured person has lost his leg and has incurred more than $75,000 in medical bills. He will not be able to go back to work at his construction job and will lose $250,000 in future earnings. A fair value for the case may be $800,000 if the injured person prevails on liability. The injured person, over the past 20 years, has acquired assets for his family worth about $30,000.

A suit is filed for damages. The insurance company, which controls the defense, immediately makes an offer to settle the case for $20,000 under Chocola's bill. If the defendant prevails, as it will 30 percent of the time, the insurance company can then seek attorney fees and costs from the injured person even though the case was not frivolous. Such fees and expenses could exceed $30,000.

Thus, in order to have a legitimate case tried by a jury, the injured person has to choose between taking an unfair and unreasonable settlement or losing everything acquired in a lifetime of work.

The unfairness of the system lies within the unequal financial positions of the parties. The plaintiff is usually a person with limited resources and assets. The defense is controlled by a large multi-billion dollar insurance company such as Allstate or State Farm. Such large insurance companies can easily afford to risk having to pay plaintiffs' attorney fees if they lose. Very few individuals can risk losing their life savings simply to have their day in court.

The law is callously designed to allow rich and powerful insurance companies to coerce injured plaintiffs into an unfair settlement to avoid risking their life savings.

Not only is this unjust, it is bad policy. For countless years, plaintiffs sought to hold the tobacco industry liable for the death and destruction that cigarettes have caused. Initially, the industry prevailed with defense judgments. Over time, the lawsuits brought the truth to light.

Documents were discovered showing how the tobacco industry manipulated the nicotine to maximize its addictive effect. Documents showed how the industry targeted minors. Now, these lawsuits are won.

The facts brought to light by the litigation show that the original cases were not frivolous just because they were initially lost. These cases would never have been brought if Chocola's bill were law. The billions our states have recovered to help offset the health bills we have all paid to treat those injured and killed by tobacco would never have been recovered. Big tobacco would still be targeting our children.

Chocola, through this bill which he has sponsored, has shown that his true loyalty lies with large insurance companies and not with the people of Indiana.

Robert F. Gonderman Jr. is an attorney. He lives in Granger.

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