• Text smaller
  • Text bigger

“It will be huge,” says Washington Times columnist Morton Kondracke,
speaking of the tort reform issue in the 2000 presidential election. On
the GOP side, George W. Bush has made it clear that legal reform is at
the top of his presidential agenda, positioning himself on a collision
course with the nation’s trial lawyers, key players in the Democratic
Party. Last year, for instance, the American Trial Lawyers Association
gave $2.4 million to federal candidates, $2.1 million of it to
Democrats.

“The most important thing you and I can do to improve our economy and
create jobs in Texas is to reform our civil justice system,” Bush
declared in his first State of the State message as Governor of Texas in
1995 — and he followed through. “George W. Bush pushed a sweeping
legal reform package through the Texas legislature in his first term as
governor,” reports Kondracke, “including limits on defendants’ liability
to their proportion of responsibility, punitive damages and frivolous
lawsuits, a series of reforms that Bush aides say he’ll try to duplicate
at the federal level.” On top of those reforms that restricted joint
liability, stopped plaintiffs’ lawyers from shopping around for
sympathetic courts, and rolled back out-of-control windfalls that were
out of proportion to any financial loss or actual pain and suffering,
Bush successfully pushed through campaign reform in judicial elections,
targeted law firms for higher taxes, and fought the award of $3.3
billion to the lawyers who negotiated Texas’ $17 billion settlement with
tobacco companies.

The effect? A revolution in the legal culture of Texas. From a
statewide high of 65,000 cases in 1995, personal injury lawsuits are now
down to less than 10,000 annually. “With fewer lawsuits and payouts to
people claiming injuries,” says Bush, “consumers in Texas have saved
over $2.2 billion in
lower insurance premiums since the 1995 legal reforms.”

On the political side, the Texas Supreme Court, an elected body that
was once controlled by Democrats, is now 100 percent Republican. “The
court which decided about 70 percent of its cases in favor of plaintiffs
in the mid-1980s,” reports the New York Times, “now rules against them
75 percent of the time.” Thomas Phillips, Chief Justice of the Texas
Supreme Court, explains that his court’s opinions reflect the broad
conservative trend in American civil law, the “realization across
America of the limits of the tort system.”

“On a scale of 10, Bush is a 10,” says Ralph Wayne, president of the
Texas Civil Justice League, one of the top business groups lobbying for
legal reform. On the other side, with Bush up for re-election last year,
an estimated 78 percent of all campaign contributions to the Texas
Democratic Party came from trial lawyers.

In his Iowa and New Hampshire presidential kick-off last month, Bush
pointed to tort reform as a key policy objective he’d pursue to keep
America’s prosperity on track, along with free trade and lower taxes.
The economic argument: American tort costs, growing nearly four times
faster than the overall economy over the past few decades and now
consuming more than double the share of National Income in the United
States as the world average in other developed countries, represent a
drag on investment, growth, income, and America’s international
competitiveness.

Interestingly, with still more than a year to go before the
presidential election, Gov. Bush, running far ahead of Al Gore in the
polls and piling up an unprecedented war chest of campaign cash, may
well have already scored his first tort reform success at the federal
level. In a dramatic turnaround,
President Clinton has cancelled his promised veto and reached an
agreement with Republicans on the Year 2000 tort reform bill,
legislation that puts a lid on lawsuits arising from Year 2000 computer
breakdowns. Thomas J. Donohue, the president of the United States
Chamber of Commerce, called the success of Y2K tort reform “a watershed
achievement for business and the
American economy.”

The Year 2000 bill, aggressively promoted by a broad range of
business interests and opposed by trial lawyers and most Democrats in
Congress, a) sets a ceiling on punitive damages against small companies,
i.e., companies with fewer than 50 employees can’t be charged more than
$250,000 in punitive damages, b) gives all companies, large or small, a
three month grace period to fix a problem from the time they are
notified before they can be sued, c) limits damages and the number of
plaintiffs in class-action suits and shifts class-actions to federal
courts, making suing more costly and burdensome to plaintiffs, and d)
puts limits on joint and several liability so that larger and more
wealthy companies aren’t forced to pick up the tab for damages caused by
smaller and less affluent or bankrupt co-defendants.

“Many angry Democrats in the House and Senate said the White House
had encouraged them to cast a politically risky vote against the Year
2000 tort reform bill and then sold them out,” reports the New York
Times. In its front page analysis of the Clinton administration’s switch
in positions, a reversal that “infuriated many Democrats,” the Times
reported on the politics behind the change: “A Democratic strategist
said Vice President Gore, as he begins his campaigning for the
presidency, was eager to rid himself of the taint of financial support
from trial lawyers. For Mr. Gore, the money from trial lawyers was
probably not worth the criticism he faced for taking funds from an
unpopular source.”

If Al Gore is serious about that, he should be asking Congress to
look into how the legal reform provisions in the Year 2000 bill can be
expanded to cover the rest of America’s business community.


Ralph R. Reiland, Associate Professor of
Economics at Robert Morris College in Pittsburgh, Pa., is co-author of
“Mom & Pop vs. the Dreambusters: The Small Business Revolt Against Big
Government” (available by calling 1-800-262-4729, ISBN#0072347740).

  • Text smaller
  • Text bigger
Note: Read our discussion guidelines before commenting.