In Search of the “Lawsuit Crisis”

Abstract

By now nearly everyone knows about the liability crisis. Municipalities, doctors, businesses, and others are paying soaring premiums for their liability insurance. The unlucky ones cannot find coverage at any price. The result is that services are becoming increasingly scarce and expensive. Curiously, the causes sound even more familiar. A new booklet being circulated by the Insurance Information Institute puts them succintly: “While our judicial system is basically a good one, it has been handicapped by unnecessary lawsuits, … exorbitant awards, and unpredictable results.”Thus, the liability crisis is seen as a lawsuit crisis. The press and industry lobbyists overflow with stories of frivolous lawsuits, out-of-control damage awards, and a nation turned litigious. Accordingly, state legislatures around the country are preparing to solve the problem by modifying the laws that permit injured plaintiffs to seek compensation for their injuries through the courts.If the lawsuit crisis exists, serious evidence of it should not be too difficult to find. in fact, the more awful the problem, the more plentiful and glaring should be the evidence. I have begun such an inquiry, but so far the hard evidence has been, to put it mildly, elusive.