We Aren’t Seeing You in Court
America’s litigation explosion has fizzled.
Americans are no longer suing each other as much.
Californians are suing each other much less.
After years of steady decline, the number of big-money personal injury lawsuits in California is roughly half of what it was a decade ago. Small claims have fallen to levels unseen in 30 years.
“California may be a bit more precipitous,” said University of Wisconsin law professor Marc Galanter, an expert on lawsuit patterns, “but this is the general picture in the United States.”
Scholars, attorneys, judges and consumer and corporate advocates offer a variety of possible explanations, including:
* The success of business and insurance company-advocated “tort reforms” in the form of legislation and judicial rulings that have made it less lucrative for plaintiffs’ lawyers to take some claims to court.
* The spread of private judging, involving mediation and arbitration, which has resulted in settlement of more disputes in forums other than public courts.
* Improvements in product safety that have resulted in fewer injuries, on which some lawsuits are based.
* A cultural change in which some people may have become more inclined to give up than fight.
No systematic research has been done on the causes, said Brian Ostrom, director of court statistics for the National Center for State Courts.
But a review of statistics kept by the center and by California’s Judicial Council makes it clear that nationally, over the last decade, the rate of tort lawsuits has slightly declined while, in California and some other states, the rate has plunged. Torts involve wrongful acts or injuries not covered by contracts.
Nationally, litigation over contracts is also down, statistics show.
What the declines signify is a matter of perspective. Some say any decline is laudable, indicating a society with less propensity for all-out fights; others say it is an unhealthy sign of passivity.
The American Tort Reform Assn., an advocate of limiting lawsuit awards, says the downward trend is somewhat irrelevant. The real problem with the civil justice system is not how many lawsuits are filed, the group says, but that some of them result in jury awards against businesses that are punitively unfair and unpredictable.
A survey released this week by Jury Verdict Research found that verdicts for compensatory damages in personal injury cases have been relatively stable nationally in recent years. The median of $50,000 in 1999 was the same as the median in 1993, said the Pennsylvania-based publication, which reports data on the market value of injuries. But median punitive damage awards from juries, in the approximately 4% of trials in which they were given, tripled during that period to $200,000.
The research also turned up evidence of a steep rise in the value of settlements--the end point for the vast majority of lawsuits. Median settlements quintupled, to $100,000, during the period, the survey found, suggesting that plaintiffs’ lawyers may have become more selective in the cases they bring.
Increases in some of these categories may help explain why, despite the decline in case filings, the image of a nation in the midst of a litigation explosion persists in newspaper editorials, commentaries and political speeches.
‘Explosion’ May Have Been Overstated
Arguably, that image has always been overblown. Legal scholars suggest that only a small percentage of those who suffered injuries ever took their claims to court.
A massive study of the behavior of injured Americans in the late 1980s by the Rand Corp.’s Institute for Civil Justice found that only 2% of injured Americans sought compensation by filing lawsuits.
A tort litigation “explosion” occurred in the 1970s and 1980s, when lawsuits increased by a little more than half, suggesting that 3% of those injured were filing them.
That was not a big event in the long lens of American history. Litigation rates were higher in colonial and pre-20th century America than at the height of the modern “explosion,” said the University of Wisconsin’s Galanter.
But the “explosion” may have been perceived as bigger than it was because it followed a period of decline in lawsuits that began during the Great Depression and continued through World War II and the postwar recovery years. A law review article from that period reflected the concern of some lawyers and judges that they might not have enough to do. It was titled: “The Problem of Decreasing Litigation.”
When things turned around, business and insurance interests squealed. They decried the rapid increase in lawsuits from 1975 to 1986 as bad for the economy. They were particularly upset about the possibility of getting socked with huge punitive damage awards--imposed by juries in rare cases to punish those whose negligence resulted in injuries, rather than merely to compensate victims for damages they suffered.
Business and insurance interests launched the tort reform movement, which has engaged in pitched battles with plaintiffs’ lawyers and consumers groups in state capitals and in Washington.
Despite data showing that the number of personal injury lawsuits nationally held steady from 1986 through 1996--increasing in some states, decreasing in more--tort reform remained an urgent item on business’ agenda. The 1994 Republican “contract with America” observed, for example, “Almost everyone agrees that America has become a litigious society: We sue each other too often and too easily.”
The Republicans were not making that up. Almost everyone did agree, according to national polls. Surveys in the early and mid-1990s by Roper Starch Worldwide for the Insurance Research Council showed that nearly three quarters of Americans believed that “the number of personal injury lawsuits today is too high.”
Many state legislatures, including California’s, responded by capping some damage awards for plaintiffs.
And nationally, beginning in 1996, the number of personal injury lawsuits began to decline.
In California, the decline in injury lawsuits started earlier and has been far steeper than in the other states where records are available.
Rand economist Stephen Carroll attributes the big slide here mainly to the long-term repercussions of a 1988 state Supreme Court decision that changed the rules under which injury lawsuits are brought.
That decision took away a powerful negotiating tool that plaintiffs’ attorneys had used to pry settlement offers out of insurers. The vast majority of lawsuits are settled before trial.
Until the high court acted, a plaintiff’s attorney could bring a lawsuit accusing an insurer of bad faith if the insurer failed to make a reasonable settlement offer.
The high court took away that threat of punitive damages and insurers were freer to make low-ball settlement offers or none at all. Plaintiffs’ attorneys, largely dependent on settlements for their own incomes, may then have become choosier about which cases they filed.
After the high court decision, personal injury lawsuits filed annually in California Superior Courts fell over a decade from 132,000 to 70,000.
The largest subgroup of the lawsuits, involving motor vehicle injuries, fell from 91,000 to 42,000 per year.
William Vickrey, administrative director of California courts, said another possible reason for the decline was a decision by insurers to handle more cases themselves, rather than sending them to outside lawyers. That practice, he said, may have led to more settlements before lawsuits were even filed.
He also said an increase in class-action suits could account for some of the decline.
Plaintiffs’ lawyers argue that a significant part of the decline is attributable to their own success in spurring manufacturers to make safer products to avoid liability. Statistics show that fewer people are injured in motor vehicle and workplace accidents than once were.
In California, 20% fewer people were injured in car crashes in 1999 than a decade before, even though a million more vehicles were on the road, the California Highway Patrol says. Although problems persist, as exemplified by the Firestone tire recall, the CHP attributes some of the decline in injuries from accidents to safer cars. Nationally, motor vehicle and workplace injuries have also fallen.
At about the same time that the California Supreme Court acted to curb the threat of punitive damages against insurers, alternatives to the traditional public court system were growing in popularity.
Mediations and arbitrations began to gain wider currency as ways of solving disputes outside of court. Those services are often provided by former judges, more than 500 of whom now advertise their availability in California, where the private judging industry is widely regarded as the most robust in the nation.
Arbitration and Cultural Change Cited
Former state Sen. Quentin Kopp (I-San Francisco), now a San Mateo County Superior Court judge, believes that private judges have siphoned off a significant number of disputes that heretofore would have been filed as lawsuits.
Kopp is not alone. County law librarians, whose budgets come from fees people pay to file lawsuits, are alarmed because the number of lawsuits and thus, their revenues, are down. They recently concluded that a key reason is the spread of employment, commercial and consumer contracts that require people to agree in advance to take their disputes to binding arbitration rather than to court, said Richard Iamele director of the Los Angeles County Law Library.
Some experts speculate that a more important change may be cultural.
The University of Wisconsin’s Galanter has observed that the last part of the 20th century saw an expansion of legal remedies and greater access to courts by previously excluded groups, such as African Americans and the disabled.
Yet the expansion, he has written, also brought “a massive recoil. Starting in the 1970s, unease among elites about the expansion of the law joined with interest group concern to curtail liability and to promote campaigns deriding law and lawyers. Such campaigning intensified in the mid-1980s. . . .”
This kind of “great negativism” about the role of the courts ushered in an era of conciliation, said Stanford University law professor Deborah Hensler, in which businesses and the courts themselves promoted alternate means of resolving disputes. The emphasis on methods such as mediation was accompanied by a shift in rhetoric promoting the idea that it is bad to fight, good to compromise.
California consumer activist Jamie Court worries that this kind of shift gives businesses greater opportunity to take advantage of individuals.
“Corporations have created a stigma for people who don’t go along and get along,” says Court, advocacy director for the Santa Monica-based Foundation for Taxpayer and Consumer Rights. “People are less willing to stand up for themselves.”
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Times Poll Director Susan Pinkus contributed to this story.
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Declining Litigation
For years, the number of lawsuits rose dramatically nationally and in California. Lately, the number of civil lawsuits, including tort cases--which involve wrongful acts or injuries not covered by contract--has leveled off nationally, and in California it has sharply declined.
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Notes: General jurisdiction claims in California involve $25,000 or more, a floor set in 1990. Limited jurisdiction claims involving less than $25,000 in California have also declined. Small claims in California involve disputes of $5,000 or less, a limit set in 1991. Information on tort cases nationally is drawn from the 16 states that separate them statistically: Arkansas, California, Colorado, Florida, Hawaii, Idaho, Kansas, Maine, Maryland, Michigan, North Dakota, Ohio, Tennessee, Texas, Utah and Washington. Information on contract cases nationally is drawn from the 15 states that separate them statistically: Arizona, Arkansas, Colorado, Connecticut, Florida, Hawaii, Kansas, Maine, Maryland, Minnesota, North Carolina, North Dakota, Tennessee, Texas and Washington.
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Sources: Judicial Council of California, National Center for State Courts
