The Gazette 1988

GAZETTE

MARCH 1988

Tort Reform in the U.S.A. and Lessons for I reland

T h e r e c e n t c l a m o u r f o r r e f o r m i n t h e a r ea o f p e r s o n a l i n j u r y l i t i g a t i on i n t h i s c o u n t r y h a d b e e n p r e c e d e d b y e v en m o r e s t r i d e n t c a l l s f o r r e f o r m i n t h e U S A i n r e c e n t y e a r s w h e r e p h r a s e s l i k e " i n s u r a n c e c r i s i s " a n d " l i t i g a t i o n e x p l o s i o n " c h a r a c t e r i se t h e d e b a t e . T h e r e , l o b b i es w i t h v e s t ed i n t e r e s t s, t r i a l l a w y e r s a n d t h e i n s u r a n c e i n d u s t r y , f o r e x a m p l e , l o c k h o r n s i n s o m e t i m e s s t r i d e n t d e b a t e . T h e A m e r i c a n B a r A s s o c i a t i on f o u n d i t s e lf i n t h e e m b a r r a s s i ng s i t u a t i on i n 1 9 8 5 w h e n i t d i d n o t h a ve a n a r t i c u l a t ed p o l i c y o n t h e i s s u es i n q u e s t i o n . To r e m e d y t h i s t h e A s s o c i a t i on s e t u p a c o m m i t t e e u n d e r t h e c h a i r m a n s h i p o f P r o f e s s o r B. M c K a y t o e x a m i n e t h e m a t t e r a n d s u g g e s t r e f o r m s .

equitable share of the plaintiff's full economic loss. A defendant's responsibility should be regarded as ' 'substantially disproportionate'', when it is significantly less than any of the other defendants; for example, wh en one of t wo defendants is determined to be less than 2 5% responsible for the plaintiff's injury. 4. A t t o r n e y s' Fees Fee arrangements wi th each party in tort cases should be set forth in a written agreement that clearly identifies the basis on which the fee is to be calculated. Cou r ts shou ld p r oh i b it t he practice of taking a percentage fee out of the gross amount of any judgment or settlement. Contin- gent fees should be based only on the net amount recovered after litigation disbursements such as filing fees, deposition costs, trial transcripts, travel, expert witness fees, and other expenses necessary to conduct the litigation. Whenever judgment is entered in a tort case, fee arrangements w i th each party and the fee amount billed should be submitted in camera to the court, which should have the authority to disallow, after a hearing, any portion of a fee found to be "plainly excessive" in the light of prevailing rates and practices. 5. S t r e am l i n i ng t he L i t i ga t i on Pr ocess: Frivolous C l a i ms a nd Unneces sa ry Delay A " f ast t r a c k" system should be adopted for the trial of tort cases. In recommending such a system, the Committee endorsed a policy of active judicial management of the pre-trial phases of tort litigation. It anticipated a system that sets up a rigorous pre-trial schedule w i th a series of deadlines intended to ensure that tort cases are ready to be placed on the trial calendar within a specified time after filing and tried promptly thereafter. The Courts should enforce a firm policy against continuances.

The Mc K ay Repo rt A draft report was produced in December 1986 wh i ch it was hoped would be unanimous, but just be f o re pub l i c a t i on, f our members broke ranks and entered a m i n o r i ty r epo r t. Gene r a l ly speaking, the minority felt that the insurance dimension should be t aken i n to a c c o u nt in any examination of proposals for reform in the tort system. The majority claimed that the consideration of the insurance aspects of the Problem was outside its remit. After some heated debate within the Association itself, the report was finally adopted at a full meeting of the A.B.A. in February 1987. The report itself was a thorough one and the recommendations were, in the words of the Chairman, rather mo d e s t. Twen t y - one Proposals for r e f o rm we re suggested and the major ones are set out hereunder. At present 19 of these have been adopted by the A.B.A. and the other t wo are still subject to discussion within the Association itself. The principal recommendations of the McKay Committee for tort reform in the U.S.A. were the following: P&in and Su f f e r i ng Damages There should be no ceilings on pain and suffering damages, but instead trial and appellate courts should make greater use of the power of remittitur or additur w i th reference to verdicts which are either so

excessive or inadequate as to be clearly disproportionate to com- munity expectations by setting aside such verdicts unless the affected parties agree to the

modification. One or more tort award • commissions should be established, wh i ch wou ld be empowered to review tort awards during the preceding year, publish information on trends, and suggest guidelines for future trial court reference. Op t i ons should be explored to provide more guidance to the jury on the appropriate range of damages to be awarded for pain and suffering in a particular case. 2. Pun i t i ve Damages The scope' of punitive damages in cases involving damage to person or property should be narrowed. 3. Jo i n t - and -Seve r al Liability The doctrine of joint-and-several liability should be modified to recognize that defendants whose responsibility is substantially dis- proportionate to liability for the entire loss suffered by the plaintiff are to be held liable for only their

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