This is for all tort reform advocates, like those smart folks at the Wall Street Journal, who spout the simplistic suggestion that a loser pay rule would improve the American civil justice system. The Times Online reports on Lord Justice Jackson’s lengthy report on the United Kingdom’s civil justice system. The upshot is that Lord Justice Jackson recommends ending the United Kingdom’s loser pays rule.

Leave it to The Times to get to the heart of the matter: “The civil justice system has priced itself out of the reach of ordinary people; they face financial ruin if they venture into court and lose.”

The issue is access to justice. In a loser pay system, only the wealthy can access the courts. That is so contrary to the American way. Let’s all mark this lesson as a response when the smart folks at the Wall Street Journal start pushing for limits that treat justice as a luxury item.

David Sugerman

Here’s a somewhat misleading piece on the use of so-called “Independent” Medical Exams in the courtroom.

The article interviews Portland defense lawyer Ron Stephenson.  Ron suggests that both sides use biased medical providers. So it follows, according to the article, that it’s okay–even essential–that the defense use a biased medical examiner.

I’ve handled cases against Ron and his partners for decades. I can tell you without question that I always prefer to use the patient’s own doctor, and every lawyer who represents injured people will tell you the same thing. There are exceptions. Sometimes a patient’s doctor won’t agree to testify in court. Sometimes they charge so much money that we simply can’t afford their testimony.

I have the luxury of working in a smaller community. I know the lawyers and firms on the other side of my cases, and I know many of the doctors. Who my opponent selects for the defense medical exam will color my reaction. If it is a standard defense doctor, I will often oppose the exam or at least seek conditions. The most important conditions for these types of defense exams include the doctor’s earnings from medical exams and a video of the exam.

A number of my opponents choose a wiser path. When the defense selects a neutral physician, I will put much more stock in the opinion.  If that only happened more frequently.

David Sugerman

George Orwell would have marvelled at the name, “The Center for Consumer Freedom.” Is that a great name or what? So why are they opposed to food labeling requirements? Why do they claim that the obesity epidemic is a contrivance? And why do they counsel consumers to get written waivers from guests before serving unlabeled Thanksgiving dinners that might have lots of calories and fats?

The “Center for Consumer Freedom” is a front for food processors, manufacturers, and fast food restaurant chains. It was started with seed money from tobacco giant Philip Morris.  According to the Center, it’s the evil trial lawyers that you need to fear at the Thanksgiving table. Full disclosure: While I don’t think of myself as evil, I am, in fact, a trial lawyer.

So here’s a question for the Orwellian people at Center for Consumer Freedom: What are you afraid of? What do you and your funders fear? Is it that informed consumers might make choices that hurt sales and profits? Is it that the calorie dense corn syrup-fueled commodities might lose their sweet and profitable allure once consumers have the ability to make choices? One of the things lost on the deregulation crowd (say, “oink!” all) is that disclosure rules provide the best form of regulation. When consumers have information, they can choose with knowledge. Isn’t that preferable to rules that prohibit things?

At bottom, the food industry makes choices in what it puts in its products. If you want to blame us for “being fat” then surely you can’t oppose giving us the information that allows us to make smart choices. Or can you?

In the end, it’s easy to demonize the trial lawyers. But we didn’t start spiking processed foods with high-fructose corn syrup. But even worse, the disclosure rules opposed by the “Center for Consumer Freedom” would lessen lawsuits.  If consumers know what they’re getting, they have literally no cause to complain. So–to quote one of their fund sources from an old campaign–Where’s the beef?

David Sugerman

Guess they’re through licking their wounds over their electoral losses earlier this month. The Chamber of Commerce is back with its tired screeds about the “costs” of lawsuits.  According to the Chamber, the “lawsuit industry is booming.” I’m sure that has nothing to do with the Chamber’s role in federal deregulation. As well, I’m sure that the various market and consumer frauds that led to the financial collapse would have nothing to do with why there might be more litigation.

The Chamber can’t have it both ways.  If it wants dergulation, then it must accept that lawsuits will happen when deregulated actors cross various lines. On the other hand, if it truly wants less lawsuits, then the Chamber should welcome regulation as the alternative approach. But arguing against both regulation and lawsuits can mean only one thing: The Chamber insists that American business should answer to no one. I think our current financial crisis explains exactly why “neither” is a bad choice.

David Sugerman

Back on the kleptocracy, and it looks like the Chamber of Commerce is working to keep its position at the trough by threatening to go to war with the incoming Obama administration. It seems that the Chamber is concerned about how new or revised regulations that reverse the Bush-era’s kleptocracy may affect the Chamber. The Chamber, of course, opposes the rules, claiming that they will benefit plaintiffs’ trial lawyers.

Classic diversion tactic, as the Chamber fails to take responsibility for its role in the financial meltdown. In fact, the Chamber got paid handsomely to lobby against regulation.  In their rush to demonize trial lawyers, the Chamber always forgets to mention its role in lobbying for failed insurance giant, AIG. I’m going to guess that when and if the real story of the U.S. Chamber of Commerce gets told, trial lawyers will be the least of their concerns.

Meanwhile, let’s be clear about a few things. Americans of all backgrounds, ages, races, and political persuasions voted for change. The kleptocracy is over. No more feeding at the trough. It’s time to put regulations in place because taxpayers–and our children–are going to pay for your greed and the lack of oversight that got us here. It’s time that corporations paid their fair share of taxes. It’s time to make sure that juries decide product safety issues. It’s time for equal pay for the same work, regardless of race or gender. In short, the Chamber of Commerce’s time at the trough is over.

David Sugerman

It’s a bit hard to read about the details of Bill Coultas’ injuries from a helicpoter crash, but doing so gives good insight into why we need a fair and open justice system. Mr. Coultas suffered profound injuries in the helicopter crash. No wonder that survivors and relatives of those who died are pursuing claims arising out of the crash.

The talking heads who criticize the civil justice system mouth stock phrases like, “frivolous lawsuits” and “McDonald’s coffee.” If you’ve heard or uttered those words, you should take a look at Mr. Coultas’ story, as it explains in detail what we mean when we talk about profound injuries.

I don’t know anything about Mr. Coultas’ situation other than what is reported in the linked article. Still, it’s a good read for crticis of the civil justice system.

David Sugerman

Good piece on how it’s usually wise for plaintiffs in injury cases to settle their claims, even when the settlement feels like too little money. The short version is that pre-trial settlement of the claim is generally the wise choice.

According to the forthcoming study, plaintiffs–the people bringing the lawsuit–mistakenly go to trial 60 percent of the time.  The measure of a mistake is whether they receive more at trial than was offered or less. If it’s less, the authors treat that as a mistake.

Interestingly, while defendant’s make the wrong choice less frequently, the study reportedly finds that when they are wrong, they tend to be wrong by a much greater amount.

I’ll be interested to see the study once it’s out because it may have understated something that’s important. If the study only compares the amount of the settlement offer to the amount of the trial verdict, the study may understate the harm to the plaintiff who chooses incorrectly.

Here’s why.

It usually costs substantially more to go to trial. In contingent fee cases, it is not unusual for a lawyer’s fee to increase if the case goes to trial.  That increase is designed to reflect the sharp increase in the amount of work the lawyer must do.The hourly lawyer’s fees also increase sharply as trial approaches, as the lawyer and his or her staff will spend a lot of time on the clock preparing for trial and going to trial.  When I am in trial, it is not unusual for my work days to run 14-18 hours, and when a trial goes several weeks or longer, it’s easy to see why things get expensive.

It’s not just about lawyers fees. In addition, the expenses associated with trying a case can be postponed until late in the game, but they steeply increase on the brink of trial. Expert witnesses spend many hours getting ready to testify. That’s an expense. So are the costs of exhibits and presentations.The bottom line is that going to trial costs a heck of a lot more.

As a practical matter, it measn that a settlement today of $25,000 might result in an equivalewnt bottom-line net recovery that is roughly equal to a trial result in the same case of $40,000.  So in this example, if an injured person turned down an offer of $25,000 and went to trial and won a verdict of $30,000, it would prove to be an unwise choice because the net amount in the person’s pocket would actually be less.

It’s a sobering article. But it confirms my professional experience. It’s part of why those of us who try cases regularly tell clients about the risks of going to trial.  We always want our clients to make informed choices.

David Sugerman

Great news. Another juror from the recent Craig Berkman trial contacted me following the most recent post about the Berkman case.  Jim served as the presiding juror. He is properly proud of the hard work that he and his colleagues did on the case. He’s apparently been following the thread on this case, and he weighed in with the following:

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I saw your blog posting about total damages and wanted to comment. The chicken scratch on the verdict form is mine – I was the presiding juror.

If you add up the amounts in questions 8, 9 and 19, the amount that the jury intended to award in economic or compensatory damages totaled $30,514,921. Note that’s separate from the $23M+ awarded against Arthur Anderson. And separate from the $15M in punitive damages awarded the following day.

But for reasons I don’t fully understand, the court interpreted some of the numbers differently and came up with a lower total number for the damages. This was despite two questions of clarification that were submitted to Judge Hodson during deliberations (and answered in what appeared to be a clear and concise manner). Many of the jurors were upset about that, particularly given it may have made Arthur Anderson look “more guilty” than Craig Berkman because the reported amount of damages against Anderson was more than Berkman. Further confusing the issue is that different amounts were reported in different news sources. Candidly, if we had known that the $30M total would be reduced, this probably would have affected the amount of punitive damages awarded.

Of course, this is probably a moot point given Mr. Berkman claims that he, personally, and his companies are millions in debt and it’s questionable how much the victims will end up receiving.

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More from David: Jim is referring to the verdict form that is posted in this entry.

Jim-As with your colleague in her earlier post, it’s apparent that you and the other jurors served attentively and worked hard to do the right thing in this case.  Once again, it shows the strength and integrity of the Oregon jury system. Kind of makes me proud to be part of this thing.  Thanks so much for sharing your experience with us.  Even though I have no connection to your case, I want to thank you and your colleagues for your service.

David Sugerman

No secret that I’ve been a big critic of large insurance companies. You don’t have to look too far into the archives to find a combination of snarkiness, outrage, and jaundice over some of their practices. So this one is in the spirit of calling it fairly. While away on vacation, I missed this report on the outcome of high-flying plaintiffs’ lawyer Dickie Scruggs’ fall from grace.

Back story is that Scruggs is one of the guys who took on the tobacco industry made millions, took on the insurers on Katrina claims, and was poised to make millions more. In between he’s done all manner of injury cases. I have no basis to know the specifics, but I would be willing to bet that he’s earned sums that might shame some small countries’ gross domestic profit numbers. So he falls from grace when the state and maybe a few insurance carriers go after him for attempting to bribe a judge.  They got him, and now he’s going to jail.

Let’s be clear. Allstate, State Farm, The Wall Street Journal and everyone else has a right to call this guy a crook and to be wary of conduct like this. I join them, by the way. I particularly appreciate what Mr. Scruggs has done for injured people with legitimate claims and their lawyers who play by the rules. (Editors note: He’s being snarky, again…he’s not grateful. Not one bit.)

It’s a black mark on those who represent injured people. It’s worse than the magic pants guy, as this was an attempt to completely undermine the fairness of the civil justice system. The problem is that criminals and clowns like this provide major fuel for the efforts of those who would limit consumers’ ability to access the courts.

It was reported that Mr. Scruggs swooned when the judge sentenced him to the maximum. Good. And I hope the jerk spends each hour of his five years reflecting on how his corruption undermined the civil justice system. I say big props and major thanks to the trial judge. By slamming him, the judge made it clear that the integrity of the civil justice system will not be undermined by criminals.

David Sugerman

This report from The Oregonian on the Berkman trial. According to news reports, Mr. Berkman testified yesterday that he always intended to repay the investor money that he took, and thus they were loans.  I imagine this one is going to be hard one to pull off.

The news reports also highlight Mr. Fortino (one of the investors’ lawyers) cross examination, reporting that Paul Fortino got Mr. Berkman to concede that “loans” are customarily transactions in which the borrowers atcually know that they were lending money. Apparently, these were “loans” that weren’t actually disclosed to the borrowers.

It’s not in the news report, and I don’t have a transcript or first-hand knowledge, so the rest of the cross examination is something I can only imagine. But I suspect that Mr. Fortino went through a litany about a lack of documentation including promissory notes, contracts, loan documents, and the like. He probably had a lot of fun asking about the particulars of these “loans” like the amount of principal, the interest rate, and the repayment date.

I suppose all of this should be written and read with a shred of skepticism, or what in law talk we call, a caveat. News reports sometimes get trials wrong…really wrong. Sometimes that’s innocent when a hard working and honest journalist simply misses something. Sometimes–rarely, I hope–it’s because the reporter has an agenda. And sometimes it’s as simple as an editor nixed part of the report for good or bad reason. So it’s possible that the news report gives a misleading impression of the trial. And all of us owe the system and the parties the grace of waiting for the jury to tell us how it turns out.

Still, it’s impossible not to react to the news report. While I haven’t watched a lick of this trial, it strikes me that Mr. Berkman is coming across like a youngster who hasn’t mastered the fine art of lying. There are several common attributes of good liars, including telling a story that is plausible enough for the listener to suspend his or her critical thinking. And if you’re going to be a good liar, never spin a yarn that is completely at odds with how the world works. Because who could possibly believe that this was a loan?

David Sugerman