Litigation in America

Today's Washington Post features an op-ed piece from George Will on litigation in America, and many of Will's points are well-taken. The examples he cites to show how frivolous litigation can grind normal human behavior to a halt are apt: teachers who are afraid to touch students even under urgent or the most innocent of circumstances; playgrounds stripped of the equipment that made them fun after inadequate supervision suits; a ban on running at recess.

But Will overlooks--whether innocently or intentionally--the real culprit in these cases. It's not parents who sue the schools when their children get hurt in ordinary accidents. It's not schools acting to protect themselves from litigation. It's insurance companies. And, unfortunately, the role that insurance companies play in such cases is generally invisible to the public. "Litigation happy" citizens take the blame. The court system takes the blame. But let's consider the anatomy of these cases:

A child is injured on the playground. The parents take the child to the doctor, and the doctor's office submits the bill to the child's medical insurance carrier. A week or two later, the parents receive a letter from the insurance company saying that they can't make a determination as to whether or not they should pay it, because it appears that there might be third-party liability. In other words, the insurance company isn't going to pay the medical bill if they might be able to pin it on the school. The parents then have to complete a form describing exactly what happened, so that the medical insurance company can decide whether or not someone else should be responsible.

Ironic, isn't it? The same medical insurance companies that tell us every day--that spend hundreds of millions of dollars telling us--that litigation is driving their costs up and making them overcharge us and our physicians have to put the brakes on to determine whether there might be someone else to sue.

If and when a lawsuit is filed, the actual defendant has little power over what happens next. For example, Will cites a case in which a teacher placed a restraining hand on the back of an unruly 7th grader and the school district was sued for $17 million and settled for $90,000.

If, in fact, all the teacher did was place his hand on the student's back, why did the school district settle? Of course, I'm not privy to the details of this particular case, but I can tell you how it goes in most cases. The school district has an insurance carrier. It's really the insurance carrier who is on the hook for the payout, and the insurance carrier's attorneys handle the case.

Now, if you were an individual--say, a teacher accused of abusing a student--you'd probably fight tooth and nail to clear your name, to keep that cloud from tainting the rest of your career. But the insurance company needn't concern itself with that sort of thing, and doesn't. The insurance company crunches the numbers and determines that it's less expensive to settle the case for $90,000 than it would be to go to trial and win--and so it pays up. The accused teacher has no say in the matter; the school district itself has very little.

And then the insurance companies come back out to the public with sad stories of how much these silly lawsuits are costing them, and how they're forced to raise prices. Because it's more cost-effective for them in the moment to hand out the cash, they create the precedent that invites lawsuits like this to move forward--as Will said himself, the case settled. SETTLED. Not the result of a rogue judge or a runaway jury, not the result of a slick lawyer playing the sympathies of the good people in the jury box--a conscious decision by the insurance company to maximize profits this quarter and the future be damned.

More on why access to litigation is critical to your safety as an American here: Corporate America Doesn't Care if You Die