We all end up paying for a litigious society

November 24, 1999|By David Boldt

AS ONE observes the unfolding wretched excesses of liability lawsuits, a question arises: What next?

The most recent answer to that query is the case in which Daimler Chrysler was sued for producing cars with allegedly defective seatbacks --- even though the injured party never owned a vehicle made by the company.

The allegations against Chrysler have been thrown out, and the corporation is currently counterattacking by suing the lawyers involved for bringing a "frivolous" suit. Chrysler has gotten all fired up on this idea of fighting back in part because last year a judge threw out a class-action suit by Jeep Cherokee owners whining that their engines were too noisy.

While it's intriguing to imagine an outcome in which Chrysler would end up owning the lawyers' houses, it's hard to believe that these actions are really going to contain the ever-expanding litigation explosion, which currently results in expenditures approaching $200 billion a year.

Just a few months ago, a jury in Los Angeles returned a verdict requiring General Motors Co. to pay more than $4.8 billion to a family burned in a 1979 accident. (This amount was later lowered by the judge to a relatively paltry $1.1 billion.)

No justice

While it may be hard to feel sorry for General Motors, there are reasons to think the big car-maker did not get a fair trial. For example, the jury never learned the real cause of the accident, which was a driver so drunk he never even put on his brakes, slammed into the rear of a stopped Chevrolet at 70 m.p.h. The impact was the equivalent of dropping the car from the top of a 16-story building.

Moreover, GM was not allowed to present testimony about fuel-tank crash tests showing the safety of its design, or statistics showing that the model in question had an exemplary safety record covering millions of miles of driving over 20 years.

The most damaging piece of evidence used against the company was a memo written by a junior engineer estimating the cost to the company of lawsuits resulting from fuel-fed fires. The memo, however, had no connection to the development of the model involved in the accident and was, at worst, a straightforward assessment of the facts of the matter.

Most Americans are probably aware of the steadily rising number of such lawsuits, and the fact that they add hundreds of dollars to the cost of an automobile, about 10 percent to the cost of a ski lift ticket, and so on.

Offsetting these costs, however, is the widespread feeling, aided and abetted by the lawyers who earn their money -- often big money -- from these suits, that there are some compensating benefits to our wacky liability system. Many people believe, for instance, that our lives are made safer by the system because it makes companies more careful.

Interestingly, there is no known evidence for this. This question was examined in meticulous detail eight years ago in "The Liability Maze" published by the Brookings Institution, in which 20 experts assessed the impact of liability law on safety and innovation. The editors -- Peter Huber of the Manhattan Institute and Robert Litan of Brookings -- wrote that none of the authors had found a demonstrable improvement in safety for Americans compared with nations that have less stringent liability-law systems.

Nor did the authors find that the increase in liability suits had accelerated a decline in U.S. accident rates. I can find no subsequent study that has contradicted these conclusions.

In fact, a 1998 article, by Harvard law professor Kip Viscusi and another author in the Georgetown Law Journal, refutes even more emphatically the idea that there is a connection between liability law and improved safety. Indeed, our liability law may make things worse by retarding the introduction of some safety improvements.

Recently developed features like antilock braking systems, side-impact air bags, and built-in child seats, for example, were made available in Europe and Japan before they were to U.S. buyers. Why? The reason is simple enough: Some unforeseen circumstance might cause the system to malfunction, enabling someone to sue.

David Boldt is Philadelphia Inquirer columnist.

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