Who wins and who loses with tort reform?
Bob Sullivan's RedTape Chronicles on NBCNews has a great column this morning about the Yankees getting a Homeland Security "Safety Act" designation for their entire stadium. (See: Yankees win protection against terrorism -- but what did you lose?.
It's a good read! My only criticism is that Bob went overboard on "fair and balanced". (Not the Faux News style of 'fair and balanced' - Bob actually does put a great effort into presenting both sides.) But it could use some deeper analysis of what's really behind the comments Bob reported. There's money at stake here - lots of it - so people tend to speak their pocketbooks first.
First, what are we talking about?
Tort Reform ...
Basically, Tort Reform means limiting the ability of people to sue for damages.
In most matters here on the Vine, I'm a flaming liberal. But in this one, I bid a fond adieu to most of my liberal friends and walk over to the other side. Tort Reform is traditionally a Republican goal ... in my view because they think it benefits their rich clients. But I think it benefits all of us ... or it could, depending on how it's implemented.
I've written several articles about this:
In both of those, I make the claim that, although the greed of corporations and their owners is clearly at fault, suing them into submission isn't the way to solve the problem.
The Homeland Security Safety Act
In the rush to lock the barn door after the horses were already gone in the days after 9-11, Congress passed a law that basically states that if a company does a lot of work to prevent some terrorist act and files a huge application with Homeland Security to prove it, they can gain immunity from most lawsuits, even if something happens. A key word here is "most". You can still sue if you think you can prove prove fraud in the application for Safety Act designation, or actual malice by the company. But simply making a mistake isn't enough. Another key phrase is "a lot of work". One of the main things this act does is require companies to actually do something to ensure the safety of people.
This is not insignificant. 9-11 related lawsuits have cost companies about $40 Billion just so far according to one estimate. And many are still pending. I'll say it again.
Whenever somebody protests that 'It's not the money, it's the principle!' -- You can be absolutely, completely sure of just one thing: IT'S THE MONEY!
The Hollow Arguments of Tort Reform Opponents
Bob's article quotes one opponent as saying, "If (companies) are not accountable, they aren't responsible and no one is ultimately safe." Translation: "The threat to sue the crap out of someone is the only way to make them accountable." That's a pretty negative statement when you think about it. And I don't think it's even close to being true. For one thing, the protection against these lawsuits has nothing to do with making people safer. A company just buys a trainload of liability insurance, adds the cost to the price of whatever they're doing, and keeps on trucking.
"But, but, but ..." - I hear you protesting - "Insurance companies require safety precautions before they issue the policy." To which I reply, "Bullpucky! Insurance companies compete on their "customer service" which includes a secret handshake agreement to not interfere with a company's business. What you are actually getting is the word of the insurance company that they're actually looking out for your interests. Do you want to stake your safety on the word of an insurance company?
In my experience, the only thing that really makes a company accountable is direct government oversight. It's the only way that we ... individual John Q. Public citizens ... have a direct voice in making companies do what's right. That's why companies fight it so hard. They can maneuver around all the other controls, but if they have a damned guvment bureaucrat looking over their shoulder that they don't pay (like they do insurance companies), it can be really hard to do business any way that fills their pockets the best. There are obvious holes in this process too. Nothing is perfect. But there is also an obvious solution: Get involved in your government and stay involved.
Who really wins and who loses
In the first article I linked above, I point out that in the famous Erin Brockovich case against the California utility PG&E, the lawyers took a full third of the swag - over $130 million - right off the top when they won the case. You shouldn't need another reason to understand why there are so many opponents of tort reform.
So ... who wins today? Lawyers! Whether they are judges, defense, or prosecution ... this is what keeps their Mercedes brand new. Who loses today? I would claim that the victims of PG&E's negligence were the ones who actually lost the money that the lawyers took off the top.
Beware of unconditional tort "reform". Simply taking away the right to sue without getting a lot in return would be worse than what we have now. The Homeland Security "Safety Act" is a good law because it forces companies to prove that they're protecting your security. And if they lie about it, they're still liable. (Although I would argue that throwing company executives into jail for lies is better than taking money away from the companies they are supposed to be serving.)