2% of Americans injured by a corp sue. 3% of them get punitive dmgs. Avg..

[AP]

..punitive damage award: $40K.

That means 97% of those who sue either get nothing or only get their economic damages. People who are rich get higher economic damages because they had more to lose (their property is more valuble, and their lost wages and time is more valuable). People who have less have less to lose, so their economic damages are often not very much at all. And it means that 98% of the damage cause by corporations never even becomes any sort of economic influence on their activities.

No wonder corporations manage to make record profits and insurance companies do so well and are so powerful.


I heard this stat on Your Call Radio. http://www.yourcallradio.org/ The show was titled "John Edwards: Anti-Corporate Warrior?" (Just How Radical an Anti-Corporate Candidate Is John Edwards Anyway? With Darren McKinney from the National Association of Manufacturers, Robert Lezner from Forbes Magazine and Chris Kromm of Southern Exposure Magazine).

If you care about how the trial lawyer issue will be used, this was a fairly interesting discussion.

The show is archived here:
http://www.yourcallradio.org/archive/archive.html

[fob]

1. 3% of 2% is .06%, so 99.94% get either nothing or econ damages

only! Clearly 'Trial Lawyers' are NOT the cause of runaway medical costs.

[AP]

7. I bet high awards are due to the corporatization of medicine.

When companies get bigger, you have to hit them with bigger damages to make them take notice.

Think of McDonalds and that coffee spill case. The jury decided that two days of the money McDonalds makes from coffee sales would make them take notice. It just so happened that that was a couple million dollars.

So punitive damages correlate to the size of McDonalds, yet they're used by tort reformers to say things are out of control. The result -- if people listen -- is that McDonalds gets it cake and eats it too. It's a huge corporations making money off of economies of size and forcing competitors out of the marketplace AND they get to argue that they want not to be held accountable when they misbehave just because anything over 1,000,000 is too big a number (even if it's a tiny percentage of your profits).

If corporate America wants smaller PUNITIVE damages, they should just get smaller.

Would they like to subject themselves to anti-monopolization regulation? No? Then stop complaining about huge punitive damages.

[fob]

16. If corporate America wants smaller PUNITIVE damages, they should just get

smaller.

Not so sure about that. Isn't that the junk bond, buy em up, split em up, sell off the pieces of the 80's?

If they want smaller punitive damages, DON'T DO UNETHICAL BUSHIT* THAT CAUSES HARM TO PEOPLE IN THE FIRST PLACE!!

Micky D's PURPOSEFULLY ran their coffe at higher temps to limit the refresh rate and increase their sales. They made a CBA that it was cheaper to maim/burn a certain amount of people each year and pay them off rather than make a few pennies LESS per cup! Note I said make a few pennies LESS, not LOSE money. So their CBA takes a big wallop and then they complain about paying up. Too cheneying bad you frigging monsters! Make a little less on the front end, keep your effing customers out of burn wards AND fire some of your corporate lawyers on the back end! Is it that difficult?

[AP]

18. I agree. But my point is if punitive damages are supposed to hurt

a corp enought that they take notice, they're going to correlate to the size of the corporation.

So, people complain about the size of punitive damages. But if corps are getting bigger and richer, then you don't really don't know anything if all you know is that punitive damages are increasing.

The statistic you need to know is whether punitive damages are increasing in proportion to the net worth/profit/gross rcpts/etc of the plaintiff.

It may be the case that punitive damages are actually getting smaller in terms of their impact (even though they're getting larger as an absolute number).

Say you were a million dollar corp 20 years ago, and suffered the occassional 100,000 punitive award for very bad behaviour, but today you're a 1,000,000,000 (1,000 times larger) and you suffer the occassional punitive award of 1,000,000 (10 times bigger) than you're actually doing much much better.

Now just imagine if you get run an advertising campaign (by buying off your elected reps) to complain about even that being too much. Well, if you can get caps on those awards, then you've just had your cake and eaten it too -- you've gotten much larger and your very size is the argument you use to reduce punitive awards to an even smaller percentage of your company's value.

[fob]

24. You are correct, punitive damages are supposed to hurt, and by

hurt, it should be a financial burden to continue the egregious behavior to a much greater degree than to reform methods. So we are in complete agreement!

Except I would argue with caps that companies would have eaten there cake and had it too, rather than the standard way, because if you HAVE your cake, OF COURSE you're going to eat it too! The saying as oft quoted seems correct when it should be backward to convey the intended meaning.

/endpsychobabble

[Susang]

2. Oh, but we REALLY need tort reform legislation passed right now!

:eyes:

[Taylor Mason Powell]

3. What about settlements?

The vast vast majority, 95-97 percent if I remember correctly, of all suits filed never even go to trial. I have no reason to doubt these figures as far as cases that actually end up in jury verdicts, but at the same time I'm not sure it's entirely correct to say that only 0.06 of injured parties ever get anything beyond economic damages. Presumably a lot of these cases settle out of court and these settlements may indeed have an economic influence on corporate activities. Probably a lot less than they should, though! Fascinating info - thanks for posting this.

[AP]

4. I bet most settlements occur AFTER suit is filed, so it wouldn't

change this stat too much. In fact, I don't think many corps would agree to huge settlements before suits are filed, and even then, the number probably doesn't include a big component for non-economic loss (because, clearly this number shows they're rare).

Also, corps tend to settle when liability is clear or when a claim is iffy but is worth less than the 5,000 bucks it might cost to have a case dismissed for failure to state a case.

[Taylor Mason Powell]

6. No, that's what I mean.

Obviously corps don't settle until after suits are filed... but the statistic that only 2% of filed suits get punitive damages presumably only applies to jury verdicts and doesn't take into account cases that settle before that. So, in other words, it seems to me that something more than 2% of plaintiffs will get some sort of recovery that exceeds mere economic losses. I'd be curious to know what that figure is.

[AP]

8. Most settlements are hush-hush, so you wouldn't know what the parties

are apportioning to economic and non-economic losses. Even if you did know the settlement details, it would still be difficult to apportion (but you could use the complain as a benchmark).

Take another look at the statistics. It's 2% of all injured individuals go to court.

We don't know how many of those win, loose, or settle, but we know that 3% of them get punitive damages (averaging 40k). So, .06% of all injured individuals end up getting something more than their economic losses from the corporation that caused them injury, and that number is mostly reflection of negligent juries find the defendant.

So, I think you can definitely conclude that corporate America either behaves pretty responsibly or gets away with a little bit of bad behaviour. it also suggests that when you hear of verdicts in the 1000000 range, it's rare and probably a reflection of some very bad behaviour.

[Taylor Mason Powell]

11. I don't disagree with the conclusion.

...corporate America either behaves pretty responsibly or gets away with a little bit of bad behaviour. it also suggests that when you hear of verdicts in the 1000000 range, it's rare and probably a reflection of some very bad behaviour.

I wouldn't disagree with this one bit. I might even go so far as to say that corporate America gets away with significantly more than "a little bit of bad behavior!" :-)

However, I do think it's maybe a bit misleading to say that only 0.06 percent of all injured individuals "end up getting something more than their economic losses from the corporation." It's more accurate to say that only 0.06 percent of all injured individuals get jury awards that go beyond their economic losses.

A small quibble, to be sure. As I said, I certainly wouldn't disagree with the general thrust of your conclusion. And certainly these statistics totally demolish the arguments of the "tort-reform" crowd.

[gpandas]

19. many, many, huge verdict awards...

are overturned on appeal. of course this appeal is always noted on some back page, as it is not as newsworthy as the ridiculous jury award. thus is the myth of huge awards created by all corporatists working together. that which is actually collected by injured parties is seldom the amount of huge jury awards. another tactic employed by corporations is endless appeals and delays, until the injured party is tapped out and desperate, and settles for a reduced amount.

[AP]

20. And if that doesn't work, get the legislature to pass a law which protects

you from future liability (which is what tort reform is, essentially).

But the overturned verdict on appeal (for a ridiculously stupid reason) and the legilature passing a law undoing the good done by the successful lawsuit are features in two different cases Edwards writes about in Four Trials.

[gpandas]

21. i must read the book. n/t

[merh]

9. It would be interesting if you could find that figure, while you are

at it, see if you can find the total amount of monies paid to corporate/defense lawyers who force plaintiffs to file suits by refusing to settle or pay reasonable compensation, even when liability is obvious.

The cost of jury verdicts to a corporation is not just the award but the legal fees of their defense attorneys who charge by the hour and stretch out the proceedings and file as many pleadings and take as many depositions as possible so that they can bill the corporate client.

[AP]

12. That's a way bigger problem in corp vs corp and non-litigious matters.

When a law firm has a deep pocketed client, they try to run up the bills. But you know what? Transactional law is a way bigger cash cow for law firms (and a way bigger expense for corporate clients) than tort litigation (ie, suits brought by injured customers).

You know the solution: the free market of law firms. Get a new lawyer. Find a firm which charges less.

[merh]

14. They have tried that - it doesn't work - actually

that is when the plaintiff's really get screwed. Since the firm cuts its rates dramatically to maintain the business of the corp (insurance co, department/retail store) the lawyers are less likely to settle, even if the plaintiff's has a legitimate obvious claim.

They force the trial lawyer to file suit and then they file motions for continuances to respond to pleadings, they stretch out the discovery, they depose everyone possible, just so they can bill to make up the difference.

Instead of corporations trusting their employees (adjusters mainly) to make valid calls based on their experience, they have it turned over to defense counsel to review.

It is a silly way to do business, but that is how it is done.

[AP]

15. It does work. I've seen corp clients dump their law firm if they feel

like fees are getting run up without results.

The other thing they do is get in-house lawyers.

I believe there's been a trend for insurance companies taking their litigation in house over the last 30 years. That totally elminates the billing problem.

[Taylor Mason Powell]

13. And here comes the lawyer-bashing!

Hey, bleeding corporations dry is one way lawyers contribute to society! Somebody's gotta do it! That money was just going to go to despoiling the environment and injuring children anyway.

[merh]

17. bashing of corporate or defense trial lawyers is very appropriate

they are the ones that milk the cases trying to bankrupt most plaintiffs and/or their attorneys.

Funny thing is, they don't back tort reform, they know it cuts of their noses despite their faces. It just that corporations have got it stuck in their craw and repugs think it is the only way to manage litigation.

[PA Democrat]

5. Only 0.21% of all civil cases filed involve product liability

Some interesting stats:

Some Facts About Lawsuits That Tort "Reformers" Ignore

• Business cases account for 47% of all punitive damage awards. In contrast, only 4.4% and 2% of punitive damage awards are due to product liability and medical malpractice cases respectively (Rand Institute for Civil Justice, 1996).

• Businesses suing each other over contracts comprised nearly half of all federal court cases filed between 1985 and 1991 (The Wall Street Journal, 12/93).

• Contract and property cases - most involving business - comprise more than 1/3 of all civil cases in state courts; by comparison, only 0.21% of all civil cases were product liability claims (National Center for State Courts, 1995).

http://www.atlanet.org/homepage/bizvsbiz.aspx

[AP]

10. So clear that the tort reform argument is just about profit maximization

in the relationship between companies and their customers.

The interests of companies are well represented in legislatures and they never have to worry about their punitive and economic damages awards being capped, even if they go up to the billions (and really influence company profits and marketplace activities).

But individuals and consumers aren't well-represented by government, so when they're injured for millions of dollars (or even a couple of thousand) governments will try to interfere with their ability to get justice.

It's ridiculous.

[donhakman]

22. Congress put a $250K cap on damages even if

you are paralyzed for life or worse.

thanks compassionate conservatives.

[AP]

23. Taxpayers will just pick up the slack when that person evntuallly goes

on welfare.

In other words, taxpayers end up paying for the negligence of corporations (out of income taxed at rates as high as 35%) so that they can have bigger profits to pass on as dividends to the top .5% of Americans, which are taxed at 15%.