It's what many call the "lottery mentality." Huge monetary awards handed out by sympathetic juries hoping to ease a family's anguish, punish big business for careless mistakes, or simply stand up for the perceived underdog by redistributing some wealth.
Good intentions or not, the U.S. tort liability system is a system out of control.
In a report issued last spring, the President's Council of Economic Advisors estimated that tort liability claims total some $180 billion a year -- roughly $650 for every citizen of the U.S. Only about 20% of that actually gets to the injured parties. Attorneys' fees and administrative costs eat up the rest.
Once rare, million-dollar awards have now become almost commonplace. Some blame jurors who have been desensitized to large sums of money by quiz shows, and lotteries that regularly hand out seven-figure prizes. "If you can answer 15 questions and win a million dollars, why not give a million dollars to a grieving widow?" a fleet manager recently pointed out.
One case involved a commercial truck that was parked on the side of the road when it was struck from behind by a car carrying two women. The passenger was killed. The automobile driver admitted that they'd been out drinking, that they had been up for an extended period of time, and that she had fallen asleep at the wheel. She also admitted that she had seen the truck and it posed no danger. The passenger's family sued the trucking company and was awarded $8 million in actual damages and $10 million in punitive damages.
The result of these irresponsible attitudes: higher insurance premiums and, ultimately, higher prices for goods and services. What can be done? For the most part, reform has to be tackled one state at a time. According to the American Tort Reform Assn. (ATRA), there has been some progress...
For the full story, see the October issue of Heavy Duty Trucking.