Gingrich targets greedy lawyers
Tuesday 07 March 1995
This week the "Common Sense Legal Reform Act", the ninth article of the Republicans' Contract with America and already approved by the House Judiciary and Commerce committees, goes on to the House floor. What happens next could be a lobbying and legislative battle rare to behold.
Under the measure, punitive damages in most state and federal lawsuits would be limited to $250,000 (£150,000), or three times the economic damage, whichever is greater, and apply only in cases of gross and deliberate negligence. In product-liability cases, companies would be held responsible only for their share of harm caused. Finally, the measure would broaden use of what is known here as the "English System'', where losers pay part or all of the winner's legal fees.
The reaction of consumers and trial lawyers, two of the wealthiest and vociferous special-interest groups, has been of predictable outrage. The Trial Lawyers Association of America called the proposals "a bail-out for the wealthy and powerful in this country at the expense of ordinary Americans". The White House has pitched in, serving notice in a letter to the House Speaker, Newt Gingrich, that it opposed the measure. In the unlikely event the bill passes the Senate and the House in its present form, it is virtually guaranteed a presidential veto.
In doing so, Mr Clinton (like his wife, most of his top aides and Cabinet members a lawyer by training) is taking a political risk. The letter may insist that the bill would "tilt the legal playing-field dramatically" against the little man. Public opinion, however, is overwhelmingly in favour of reform, if for no other reason that to cut lawyers down to size. Not surprisingly, Mr Gingrich predicts "a brawl".
As so often, the stark clichs brandished by the two sides - of helpless consumers otherwise at the mercy of ruthless big business, and of companies distracted and bled by frivolous lawsuits whose outcome is a lottery - mask a reality that is varying shades of grey.
America, as Dan Quayle, the former vice-resident and populist champion of legal reform famously pointed out, may have "5 per cent of the world's population and 70 per cent of its lawyers", while the cost to the economy of unnecessary lawsuits is put at upwards of $100bn (£61bn) a year. In fact, the number of product-liability lawsuits, around one million annually, has declined somewhat.
Nor are colossal, headline-grabbing damage awards the norm. The most sensational recent example, the $2.9m judgment for a woman scalded when she split a cup of McDonald's coffee in her lap, was reduced on appeal to under $500,000, and later settled for an undisclosed sum.
Last, but not least, the Republicans are accused of hypocrisy. It has not gone unnoticed that a party committed to states' rights and devolution is pushing legislation that would impose new federal rules, set in vilified Washington DC, on the very states whose powers Republicans want to enhance.
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