Alliance of American Insurers’ President Rodger Lawson sent the following letter to the editor of the Chicago Tribune. In it he comments on the need for reform of an inefficient tort system that benefits trial lawyers more than the plaintiffs they represent.
David Greising’s Feb. 19 column, “E2 tragedy challenges calls for tort reform,” misses the point on the argument for tort reform. Nobody is saying that the survivors of the victims of the E2 nightclub tragedy are not entitled to recover for damages they suffered. It would be cruel and heartless to suggest otherwise. As Mr. Greising pointed out, no amount of money will bring these victims back to their families.
The real issue is this: Is the current tort system an efficient way to deliver benefits that the victims are owed? How much will the victims receive compared with how much goes into the overhead of obtaining those judgments? Does the system encourage wasteful and unnecessary litigation that hurts innocent parties who are sued or who work for those that are sued?
Just this week, the respected consulting firm Tillinghast-Towers Perrin released an updated study on tort costs that shows less than 50 cents of every dollar awarded is actually returned to the people it is designed to help, and only 22 cents on the dollar goes to compensate for actual economic losses.
That same study showed there’s an enormous price tag for our current tort system. It costs every man, woman and child in this country $721 a year. That’s the equivalent of a 5-percent tax on wages. And the cost is rising at an alarming rate – over 14 percent from 2000 to 2001.
We are paying much of that “tort tax” to the real beneficiaries of the current system – the trial bar. Entrepreneurial attorneys are always looking for someone to blame, and they are eager to sue at the drop of a hat. They don’t want to see any limits on awards because they would be the victims of smaller fees.
What we are seeking is to restore the balance to an out-of-control system. Nobody is trying to destroy the tort system, just make it fair to all parties!
Rodger S. Lawson, Ph.D.
Alliance of American Insurers
Downers Grove, IL
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