Lawrence McQuillan, who with Hovannes Abramyan  researched and wrote the Pacific Research Institute’s recent report, “U.S. Tort Liability Index: 2010 Report,” has been writing localized op-eds promoting tort reform as a jobs creator.

• Great Falls Tribune, “Tort reform would bring much-needed jobs to state”
• Pottstown Mercury, “Tort reform would bring jobs to Pennsylvania”
• Los Angeles Daily News, “State could jump-start its economy with tort reform”

Even California? Yes, even California.  From “How Lawsuit Reform Could Help California Recover“:

Asbestos awards in California’s more plaintiff-friendly counties such as Alameda and San Francisco average $3 million more than in other counties, according to an article in the American Bar Association Journal. Every business day, on average, personal injury lawyers also file nearly five class-action lawsuits in the Golden State. That destroys jobs in California.

 Entrepreneurs prefer to start, expand, or relocate businesses in states with balanced tort systems that discourage excessive litigation. These decisions matter a great deal. In 2006, job growth was 57 percent greater in the 10 states with the best tort climates than in the 10 worst states.

Business leaders remain leery of California because of its sky-high tort costs and skewed courtrooms, where business defendants lose at trial 65 percent of the time. The fear of lawsuits also causes companies to withdraw or withhold beneficial products.

Lawrence McQuillan of the Pacific Research Institute has been following up PRI’s latest “U.S. Tort Liability Index” report with state-specific commentaries about the value of tort reform in improving state business climates. The states he has picked so far — Michigan, New Jersey, New York, Connecticut — could sure use the help.

Detroit Free Press, “Lawsuit reform could boost state economy“:

Michigan fell 15 places from 28th in the previous 2008 edition, so it is heading in the wrong direction. Michigan has the fourth-highest monetary tort losses out of the 50 states. It also ranks 30th in tort litigation risks.

It has the ninth-largest number of lawyers per dollar of state output. Despite the drop in Michigan’s level of economic activity in recent years, the state’s tort costs and number of lawyers filing tort lawsuits stay remarkably high, signaling that Michigan’s courtrooms are still ripe for lawsuit abuse compared to other states, especially in the categories of product liability and auto liability.

New York Post, “‘Tort Threat’ is a Tri-State Jobs Killer“:

New York’s tort laws are among the worst in the nation when it comes to limits on who can sue, how much they can sue for and similar rules that can contain tort costs and risks. (Among 29 such limits tracked in the Tort Liability Index, the Empire State ranks dead last in 19.) Connecticut is nearly as bad, joining New York in the Index’s “sinner” category. New Jersey, with more serious limits, makes it into the “salvageable” category.

It’s important to realize that everyone pays for the “tort threat.” Making businesses easy targets for personal-injury lawyers is a serious jobs-killer.

When deciding where to start a business, expand operations or relocate, entrepreneurs prefer states with tort systems that discourage abusive lawsuits. In 2006, job growth was 57 percent greater in the 10 states with the best “tort climates” than in the 10 worst states.

The Pacific Research Institute has released its 2010 U.S. Tort Liability Index, an analysis of which states impose the highest and lowest tort costs and risks. This is the third such report PRI has produced, done this year in conjunction with the Manufacturers Alliance/MAPI.

With the nation, officials and candidates making jobs an imperative, the study drives home a critical point some policymakers choose to ignore: Bad legal climates discourage the creation of jobs. As co-author Hovannes Abramyan reported, ““If lawmakers want to put people back to work, without costing taxpayers another penny for so-called ‘stimulus’, they should enact needed lawsuit reform. Job growth was 57 percent greater in the 10 states with the best tort climates than in the 10 states with the worst tort climates.”

From the news release, “2010 Tort Liability Index Ranks States’ Tort Climate: Alaska ranks best, New York and New Jersey worst“:

The Best Alaska Hawaii North Carolina South Dakota North Dakota Maine Idaho Virginia Wisconsin Iowa

The Worst New Jersey New York Florida Illinois Pennsylvania Missouri Montana Michigan Connecticut California

The bottom 10 put themselves at a disadvantage against the top 10 and other states when seeking to recruit new business. As the report explains, the low-ranked states had more costly and riskier business climates due to larger plaintiff awards, larger plaintiff settlements, more lawsuits, or some combination of the three. States can to counteract those negatives by tax breaks, subsidies, blandishments and political promotion, but then the taxpayers pay the costs.

Competition isn’t just among the states anymore, either. It’s a global competition, in which New Jersey and New York are competing not just against Virginia and North Carolina, but also against Singapore and Brazil. In that context, lousy tort climates harm overall U.S. competitiveness.

As Lawrence J. McQuillan, Ph.D., director of PRI’s Business and Economic Studies, and co-author of the report, explains:

Direct tort costs account for almost 2 percent of GDP in the United States—that’s the highest in the world. These high costs impact American businesses when firms have to divert revenue to fight lawsuits. But all of us ultimately shoulder the burden through higher prices and insurance premiums, lower wages, restricted access to health care, less innovation, and higher taxes to pay for court costs.

House Speaker Nancy Pelosi last Thursday unveiled the latest health care reform bill, the Affordable Health Care for America Act (H.R. 3962), with floor consideration possible even as early as Friday. Jennifer Ruben at Commentary reports the legal element, “A Gift for Lawyers“:

A friend points out a little nugget of absurdity and political mendacity in the Pelosi health-care bill. Remember Obama’s effort to try a “test” for tort reform? (We don’t actually need a test, since it has worked to lower medical malpractice coverage and help increase access to doctors in states that have tried it.) Well, Pelosi’s bill has an anti-tort-reform measure. On pages 1431-1433 of the 1990 spellbinder, there is a financial incentive for states to try “alternative medical liability laws.” But look — you don’t get the incentive if you have a law that would “limit attorneys’ fees or impose caps on damages.”… [This] will go a long way toward ensuring that tort lawyers remain rich, malpractice insurance remains high, and unnecessary defensive medicine remains a fixture of the health-care system.

• The Hill, “House healthcare bill cuts incentives to states that cap attorney fees, damages.”
• James Copland, Manhattan Institute, New York Post, “Tort-Bar Treat”
• Stanley Goldfarb, M.D., Weekly Standard, “The Malpractice Problem — We can’t have health care reform without tort reform.”
• Lawrence McQuillen, Pacific Research Institute, Wall Street Journal, “CBO Underestimates Benefits of Malpractice Reform.”
• Dennis Prager, “A Society that Venerates Lawyers More than Doctors”

The San Francisco-based Pacific Research Institute has released a new report, “Tort Law Tally,” identifying which state tort reforms are most effective in reducing tort losses and tort insurance premiums.

Sally Pipes, President and CEO of PRI, discusses the report in the Washington Examiner today in an op-ed, “A swift re-tort: How to fight lawsuit abuse.” Excerpt:

From 1996 through 2005, roughly 20 million tort lawsuits were filed in U.S. state courts. During that time, the combined payouts for losses and insurance premiums associated with state tort cases jumped a full 60 percent in inflation-adjusted dollars.

 

Unfortunately, less than 15 cents of every tort-cost dollar goes to compensate the injured victims, so those huge payouts wind up lining the pockets of the middlemen—the personal-injury lawyers.

 

Tort reform can stop this cycle of spiraling tort costs, which get passed along to consumers in the form of higher prices for goods and services. Tort Law Tally, a new study from the Pacific Research Institute, identified 18 measures that, taken together, can slash tort payouts by almost 50 percent and cut consumers’ annual insurance premiums by 16 percent.

The study reports that when tort reforms are ordered according to each reform’s ability to reduce aggregate tort losses, the top eight reforms are:

1. attorney-retention sunshine (12-percent reduction)
2. Daubert rule (10 percent)
3. frivolous lawsuits (7 percent)
4. jury service (6 percent)
5. appeal-bond caps (4 percent)
6. negligence standard (3 percent)
7. non-economic-damage caps (2 percent)
8. medical-malpractice damage caps (1 percent)

 Download the study here as a .pdf file.

The first presidential debate takes place Friday in Oxford, Mississippi.

Oxford…Oxford…Oxford…Now whom is it we associate, lately, with Oxford, Mississippi?

Right. It’s the home of Richard “Dickie” Scruggs, the giant among trial lawyers. Or at least it was until July.

• “Court Orders Dickie Scruggs to Ky. Federal Prison“

What a perfect venue to debate the merits of tort reform and the economic damages caused by the plaintiff’s bar, kicked off with a discussion of the criminal excesses of Milberg Weiss, Bill Lerach, and Dickie Scruggs. Oxford would be a great setting to detail the differences between the presidential candidates on the causes and cures for the nation’s tort burden, one that costs a family of four nearly $9,000 a year. (From the Pacific Research Institute’s “Jackpot Justice” study.) 

The “Mississippi Miracle,” i.e., reforms of the state’s once egregious legal climate, would also be a fruitful  area to explore.

Unfortunately, the emphasis of this first debate between Senator McCain and Senator Obama is foreign policy, and it would abuse the format to argue the predations of the trial bar. It’s not completely off topic: U.S. attorneys looking for a big payday have supported an anti-American government in Equador and damaged  U.S.-Equador relations through abusive litigation against Chevron, and U.S. foreign policy has been undermined by suits against U.S. companies that did legitimate business in apartheid-era South Africa. But with Iraq and Afghanistan and trade and Russia’s international aggressiveness all making headlines, it’s unlikely moderators will ask questions drawing from the crimes of Oxford’s Dickie Scruggs.

However, domestic policy is on the table during the October 15th debate at Hofstra. The public should demand that candidates address tort reform as one of the evening’s issues.

The Pacific Research Institute has released a new report today, the “2008 U.S. Index of Health Ownership.” From the news release:

National Think Tank Releases State Rankings on Health Ownership

Alabama Comes Out on Top, New York Finishes Last

San Francisco – Americans lack the basic freedom to make their own health care decisions according to the second edition of the U.S. Index of Health Ownership, an annual report by the Pacific Research Institute (PRI). The Index measures the degree to which individuals, be they patients, health professionals, entrepreneurs, or taxpayers, “own” the health care in their states.

“The lack of health ownership is a real problem,” said John R. Graham, director of Health Care Studies at PRI and author of the Index. “Almost half of the country’s health care spending is in the hands of the government, instead of patients themselves. The other half is governed by regulations inflicted upon doctors, health plans and patients.”

With political discussions more and more unquestioningly embracing the “right” to health care, PRI considers liberty and property rights, both as a matter of principle and as an economic consideration. The report also assesses the effect of medical tort (and therefore the need for malpractice reform) on people’s freedom to engage in health services.

An important contribution to the debate, not coincidently coming from the epicenter of government attacks against individual choice in health care, San Francisco.

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