Is there a real need for a federal cap on non-economic damages in medical malpractice suits (to be voted on by the US Senate)? It is widely claimed that frivolous medical malpractice suits are on the increase, causing healthcare costs to rise and enriching only claimant lawyers. The recent research conducted by Harvard School of Public Health (HSPH), Brigham and Women's Hospital and the Harvard Risk Management Foundation shows that no evidence of increase in frivolous suits exists (published in The New England Journal of Medicine, Volume 354: 2024 - 2033, May 11, 2006). The research demonstrates that most medical malpractice suits are actually justified (involve medical errors).
The researchers suggest that, instead of trying to cap damages or limit attorneys' fees, the legislators should focus on "streamlining the processing of claims that do belong".
Monday, May 22, 2006
Friday, May 19, 2006
US Tort Liability Index 2006 - the costs of tort - 'saints, sinners and salvageables'
The costs of tort law and litigation in the US are receiving lots of attention recently: The Pacific Research Institute (not-for-profit think tank based in California) published The US Tort Liability Index: 2006 Report on 11 May 2006. This comprehensive report based on extensive research assesses the best and the worst tort systems in the US. The Index measures the 'inputs' and 'outputs' in tort systems in all 50 states using 39 variables, assessing the present situation and predicting the future. The 39 variables are divided into five subgroups:
1. monetary tort losses (including insurance loss ratios for commercial automobile liability, product liability, medical malpractice, workers' compensation etc.),
2. threats (did the state have 'judicial hellholes' in 2005, attorneys per dollar of GSP and total state incoming civil cases),
3. monetary caps in 2005 (caps on non-economic damages, punitive damages or damages in medical malpractice suits),
4. substantive law rules and reforms in 2005 (class actions, contingency fee limits, product liability or medical malpractice),
5. procedural /structural rules and reforms in 2005 (frivolous suits, jury service etc.).
Some of the best systems according to the Index are : Texas, Colorado, North Dacota and Ohio. The worst: Vermont, Rhode Island, New York. None of the good systems ranked as good in all the categories, though, and the Index stresses the need for further work.
The Index highlights a very important issue - states with high tort costs have lower standards of living, slower economic growth, and the economic climate which discourages innovation.
There is no doubt that tort costs are too high in the US (Index quotes the Tillinghast Study - see entry on 18 May), but it is fascinating to see how much is changing in this area.
The Index predicts the future situation as regards tort costs in the US and divides the states into three groups - saints (states with low tort costs which exacted reforms likely to further decrease these costs, such as Kansas, Texas or Utah), sinners (states with high tort costs which did not introduce any significant reforms, such as Alabama, Florida or Illinois), and salvageables (states with high costs which introduced reforms likely to decrease the costs in the future, such as Arizona, Georgia or Idaho).
1. monetary tort losses (including insurance loss ratios for commercial automobile liability, product liability, medical malpractice, workers' compensation etc.),
2. threats (did the state have 'judicial hellholes' in 2005, attorneys per dollar of GSP and total state incoming civil cases),
3. monetary caps in 2005 (caps on non-economic damages, punitive damages or damages in medical malpractice suits),
4. substantive law rules and reforms in 2005 (class actions, contingency fee limits, product liability or medical malpractice),
5. procedural /structural rules and reforms in 2005 (frivolous suits, jury service etc.).
Some of the best systems according to the Index are : Texas, Colorado, North Dacota and Ohio. The worst: Vermont, Rhode Island, New York. None of the good systems ranked as good in all the categories, though, and the Index stresses the need for further work.
The Index highlights a very important issue - states with high tort costs have lower standards of living, slower economic growth, and the economic climate which discourages innovation.
There is no doubt that tort costs are too high in the US (Index quotes the Tillinghast Study - see entry on 18 May), but it is fascinating to see how much is changing in this area.
The Index predicts the future situation as regards tort costs in the US and divides the states into three groups - saints (states with low tort costs which exacted reforms likely to further decrease these costs, such as Kansas, Texas or Utah), sinners (states with high tort costs which did not introduce any significant reforms, such as Alabama, Florida or Illinois), and salvageables (states with high costs which introduced reforms likely to decrease the costs in the future, such as Arizona, Georgia or Idaho).
Thursday, May 18, 2006
USA - the Tillinghast Study on tort costs - "bogus" and "propaganda"?
The latest Tillinghast Towers Perrin (insurance industry consulting firm) study on the costs of tort in the US estimated that the costs reached $260 billion annually (2005 update).
It also estimated that the costs would be rising by 6,5% in the next three years, subject to a number of factors, for instance litigation related to directors and officers of publicly held companies, litigation concerning some prescription drugs, any litigation resulting from the Hurricane Katrina and recent medical malpractice reforms in many states
(see the forthcoming comments on our blog on the proposed changes to the UK Company Law Bill aimed at reducing possible litigation against company directors).
Ken Suggs, the president of the Association of Trial Lawyers of America referred to the study as a "phoney study" and "propaganda". He pointed out that the real costs were created by those who caused injuries. The Association disputes the methodology used by the study which includes "questionnable statistics" such as payouts for minor accidents, rents on office buildings and insurance company CEOs salaries (as reported by The Colorado Springs Business Journal http://www.thepbj.com/ on 12 may 2006).
Whether the study and its methodology are reliable or not, there is no doubt that the costs of tort litigation are crucial and need to be monitored. The study offers some valuable insight into the changes in the profile of tort litigation in the US - slow decrease of person-to-person litigation (as a result of tort reforms) and an increase in commercial litigation.
We welcome comments on the study and its value.
It also estimated that the costs would be rising by 6,5% in the next three years, subject to a number of factors, for instance litigation related to directors and officers of publicly held companies, litigation concerning some prescription drugs, any litigation resulting from the Hurricane Katrina and recent medical malpractice reforms in many states
(see the forthcoming comments on our blog on the proposed changes to the UK Company Law Bill aimed at reducing possible litigation against company directors).
Ken Suggs, the president of the Association of Trial Lawyers of America referred to the study as a "phoney study" and "propaganda". He pointed out that the real costs were created by those who caused injuries. The Association disputes the methodology used by the study which includes "questionnable statistics" such as payouts for minor accidents, rents on office buildings and insurance company CEOs salaries (as reported by The Colorado Springs Business Journal http://www.thepbj.com/ on 12 may 2006).
Whether the study and its methodology are reliable or not, there is no doubt that the costs of tort litigation are crucial and need to be monitored. The study offers some valuable insight into the changes in the profile of tort litigation in the US - slow decrease of person-to-person litigation (as a result of tort reforms) and an increase in commercial litigation.
We welcome comments on the study and its value.
Thursday, May 04, 2006
Asbestos victims to receive reduced damages - liability of employers apportioned according to the 'degree of contribution' to chance of disease
The liability of employers (or, more precisely, their insurers) who exposed their employees to asbestos ought to be apportioned according to the 'degree of contribution' to the chance of contracting mesothelioma, held the House of Lords yesterday.
On May 3 the House of Lords gave a judgement in the cases Barker v Corus (formerly Saint Gobain Pipelines plc, Murray v British Shipbuilders (Hydrodynamics) Ltd and Patterson v Smiths Dock Ltd and others (to be published - [2006] All ER (D) 23 (May)) . The judgement is bound to have a significant impact on cases involving injuries caused by asbestos and damages awarded in such cases. Very often people suffering from diseases such as mesothelioma are exposed to asbestos a number of times during their lifetime and while working for different employers - thus establishing causal link is very problematic. The nature of this asbestos-caused disease is such that it is impossible to determine with scientific certainty when exactly the disease was contracted. The claimants here suffered from mesothelioma, and it was established that they were explosed to asbestos fibres by different employers (and one of them, additionally, while being self-employed). Contrary to the trend set out by the judgement in Fairchild v Glenhaven Funeral Services [2002] UKHL 22 the House was of the opinion that the defendants ought to be liable for claimant's injuries only to the extent to which they shared the risk of contributing to the chance of contracting the disease with other defendants. While Fairchild modified the approach to causation so that a proof that a defendant's wrongdoing 'had materially increased the risk of contracting the disease' was sufficient to establish this defendant's liability for the claimant's injuries, Barker v Corus seems to have reversed this tendency. The House stressed that in this case liability was imposed exceptionally (it was not certain which one of the defendants actually caused the injury), and thus it was fair that defendants shared liability. The judgement will cause reduction in the amount of damages the claimants receive (for instance because some of the employers are insolvent).
On May 3 the House of Lords gave a judgement in the cases Barker v Corus (formerly Saint Gobain Pipelines plc, Murray v British Shipbuilders (Hydrodynamics) Ltd and Patterson v Smiths Dock Ltd and others (to be published - [2006] All ER (D) 23 (May)) . The judgement is bound to have a significant impact on cases involving injuries caused by asbestos and damages awarded in such cases. Very often people suffering from diseases such as mesothelioma are exposed to asbestos a number of times during their lifetime and while working for different employers - thus establishing causal link is very problematic. The nature of this asbestos-caused disease is such that it is impossible to determine with scientific certainty when exactly the disease was contracted. The claimants here suffered from mesothelioma, and it was established that they were explosed to asbestos fibres by different employers (and one of them, additionally, while being self-employed). Contrary to the trend set out by the judgement in Fairchild v Glenhaven Funeral Services [2002] UKHL 22 the House was of the opinion that the defendants ought to be liable for claimant's injuries only to the extent to which they shared the risk of contributing to the chance of contracting the disease with other defendants. While Fairchild modified the approach to causation so that a proof that a defendant's wrongdoing 'had materially increased the risk of contracting the disease' was sufficient to establish this defendant's liability for the claimant's injuries, Barker v Corus seems to have reversed this tendency. The House stressed that in this case liability was imposed exceptionally (it was not certain which one of the defendants actually caused the injury), and thus it was fair that defendants shared liability. The judgement will cause reduction in the amount of damages the claimants receive (for instance because some of the employers are insolvent).
Wednesday, April 05, 2006
Government's new Compensation Bill - First Clause to be scrapped?
The first clause of the Government's new Compensation Bill "is unnecessary and may prove harmful". This is the conclusion of the Commons Constitutional Affairs Committee's inquiry into the UK compensation system. The clause stipulates:
"A court considering a claim in negligence may, in determining whether the defendant should have taken particular steps to meet the standard of care (whether by taking precautions against a risk or otherwise), have regard to whether a requirement to take those steps might -
(a) prevent a desirable activity from being undertaken at all, to a particualr extent or in a particular way, or
(b) discourage persons from undertaking functions in connection with a desirable activity."
The Government's aim in proposing this rule is to ensure that people undertake 'normal activity' (Baroness Ashton of Upholland) without fear of litigation. The Government argues that the provision "reflects the existing law and approach of the courts as expressed in recent judgements of the higher courts" (Explanatory Note to the Bill) (probably referring to the House of Lords judgement in Tomlinson v Congleton Borough Council [2004]). The idea for the provision arose no doubt from the recent 'compensation culture' debate. The Commons Committee concluded that there was no evidence of increase in personal injury litigation, but there certainly was a 'perception of compensation culture'. The Committee did not see the revision of the law of negligence as capable of tackling this perception. It concluded that the application of the rule would be very limited (only negligence and not tort in general, only determination of standard of care and not determination of the existence of duty). It also pointed out that the effect of the provision was not certain, and it was rather likely that the immediate effect might be to lead to additional litigation.
(Please watch this space for our more comprehensive review of the Commons Committee's Inquiry into the UK compensation system - in particular - the conditional fee agreements, excessive risk aversion, the Compensation Bill and the NHS Redress Bill. The Report is available on the website of the Committee: www.parliament.uk/conaffcom).
"A court considering a claim in negligence may, in determining whether the defendant should have taken particular steps to meet the standard of care (whether by taking precautions against a risk or otherwise), have regard to whether a requirement to take those steps might -
(a) prevent a desirable activity from being undertaken at all, to a particualr extent or in a particular way, or
(b) discourage persons from undertaking functions in connection with a desirable activity."
The Government's aim in proposing this rule is to ensure that people undertake 'normal activity' (Baroness Ashton of Upholland) without fear of litigation. The Government argues that the provision "reflects the existing law and approach of the courts as expressed in recent judgements of the higher courts" (Explanatory Note to the Bill) (probably referring to the House of Lords judgement in Tomlinson v Congleton Borough Council [2004]). The idea for the provision arose no doubt from the recent 'compensation culture' debate. The Commons Committee concluded that there was no evidence of increase in personal injury litigation, but there certainly was a 'perception of compensation culture'. The Committee did not see the revision of the law of negligence as capable of tackling this perception. It concluded that the application of the rule would be very limited (only negligence and not tort in general, only determination of standard of care and not determination of the existence of duty). It also pointed out that the effect of the provision was not certain, and it was rather likely that the immediate effect might be to lead to additional litigation.
(Please watch this space for our more comprehensive review of the Commons Committee's Inquiry into the UK compensation system - in particular - the conditional fee agreements, excessive risk aversion, the Compensation Bill and the NHS Redress Bill. The Report is available on the website of the Committee: www.parliament.uk/conaffcom).
Monday, December 05, 2005
Parliament considers the U.K.'s 'compensation culture'
The U.K. Parliament's Constitutional Affairs Committee will tomorrow receive testimony on the issue of the so-called 'compensation culture'. In particular, the Committee will hear from:
Rt Hon Lord Phillips of Worth Matravers, Lord Chief Justice;
Judge Peter Hurst, Senior Costs Judge;
District Judge Michael Walker; and
District Judge David Oldham, Association of District Judges
The Committee meeting starts at 4:30 pm (UK) and might be broadcast on the internet. Click here at that time tomorrow to check.
Rt Hon Lord Phillips of Worth Matravers, Lord Chief Justice;
Judge Peter Hurst, Senior Costs Judge;
District Judge Michael Walker; and
District Judge David Oldham, Association of District Judges
The Committee meeting starts at 4:30 pm (UK) and might be broadcast on the internet. Click here at that time tomorrow to check.
Tuesday, August 16, 2005
Opening the legal professions in Poland...
Legal services, which have so far been very expensive and difficult to obtain in Poland, may become much cheaper and more widely available with the introduction of the new law opening the legal professions! 'Access to justice' may be a more realistic notion for the ordinary Polish citizen with the estimated 100 percent increase in the number of lawyers entitled to offer legal services ('Gazeta Wyborcza, 16.08.05 www.gazeta.pl).
Yesterday the president of Poland signed the Act which will in effect abolish the exclusive control of access to legal professions for law graduates by professional organisations such as the Bar Council or the Council of Solicitors. The legal profession in Poland, consisting most of all of: barristers (adwokaci), legal advisors/solicitors (radcy prawni), judges (sedziowie), notaries (notariusze), prosecutors (prokuratorzy), has so far remained under virtually sole control of these organisations. They organised entry exams, examined candidates, planned and carried out the training for the prospective lawyers, and were in charge of the final exams for accessing the professions.
The professional organisations of lawyers have stood firm against these changes, arguing that they will mean decrease in the quality of legal services. The policy of these organisations was however widely criticised (even by the Constitutional Tribunal) as enabling favoritism of family members and simply keeping the numbers of lawyers in the market under strict control for fear of competition. It is this very competition which is hoped to ensure the quality of legal services is not compromised.
For further information about the new Act, the legal profession or the cost of legal services in Poland - please contact magdalena.sengayen@csls.ox.ac.uk
Yesterday the president of Poland signed the Act which will in effect abolish the exclusive control of access to legal professions for law graduates by professional organisations such as the Bar Council or the Council of Solicitors. The legal profession in Poland, consisting most of all of: barristers (adwokaci), legal advisors/solicitors (radcy prawni), judges (sedziowie), notaries (notariusze), prosecutors (prokuratorzy), has so far remained under virtually sole control of these organisations. They organised entry exams, examined candidates, planned and carried out the training for the prospective lawyers, and were in charge of the final exams for accessing the professions.
The main changes introduced by the Act are:
1. Instead of the entrance and the final exam organised by the organisations - a state exam,
2. Possibility of becoming a barrister, a solicitor or a notary without having to go through the formal training by the organisations (only upon passing the final state exam) - using two routes:
i. having performed legal services for five years in an unqualified status, or
ii. having a PhD in law.
3. Possibility of becoming a barrister, a solicitor or a notary without the training and without having to pass the final exam for professors of law and habilitated doctors of law.
4. Possibility of becoming a barrister or a solicitor after qualifying in another legal
profession.
The professional organisations of lawyers have stood firm against these changes, arguing that they will mean decrease in the quality of legal services. The policy of these organisations was however widely criticised (even by the Constitutional Tribunal) as enabling favoritism of family members and simply keeping the numbers of lawyers in the market under strict control for fear of competition. It is this very competition which is hoped to ensure the quality of legal services is not compromised.
For further information about the new Act, the legal profession or the cost of legal services in Poland - please contact magdalena.sengayen@csls.ox.ac.uk
Monday, August 15, 2005
New Regulation of Conditional Fee Agreements - DCA publishes the summary of the responses to Consultation Paper!
The DCA published the summary of responses to the Consultation Paper 'Making Simple CFAs a reality' on 10/08/2005. The summary can be found at the website of the DCA: www.dca.gov.uk.
It appears that extensive changes within the conditional fee regime are imminent. The present regime was found overly complex by all respondents to the Consultation Paper. It also led to numerous technical challenges (for instance: Sharratt v London Central Bus Company Limited and other appeals (the accident Grooup Test Cases), Hollins v Russell and other appeals [2003] ECWA Civ 718). Although some doubts were voiced by the respondents regarding the scope of the changes, one ought to see the transformation of the regime proposed by the DCA as the step in the right direction (towards simplicity and away from technical challenges and confusion). Let us analyse what changes were outlined in the summary:
1. The Conditional Fee Agreement and Collective Conditional Fee Agreement Regulations, now in force, were declared "not necessary or effective". These will be revoked from 1 November 2005 (they will not be applicable to all agreements concluded on or after 1 November 2005).
2. The conditional fee and collective conditional fee agreements shall be governed by a number of legislative mechanisms (some already in force, others to be introduced or amended):
i. Section 27 of Access to Justice Act 1999 - to provide regulatory requirements for CFAs (the Act to be found at http://www.opsi.gov.uk/acts/acts1999/19990022.htm).
ii. Law Society's professional rules to regulate solicitor-client matters (to be developed).
iii. Civil Procedure Rules to regulate costs issues between the parties.
3. The Law Society, APIL and FOIL are to develop model agreements and supporting guidance in line with the new regime.
The tendency is to simplify and deregulate CFAs, to render the lawyer - client matters the responsibility of the Law Society and its members. One can observe the will to further privatise the CFA system - instead of extenstive regulation, the market forces are to ultimately help determine the quality of the agreements and the protection for clients.
The doubts of the respondents concerned, among others, the ability of the Law Society to effectively control the conduct of solicitors in these matters, or the remaining complexity of Section 58.
It appears that extensive changes within the conditional fee regime are imminent. The present regime was found overly complex by all respondents to the Consultation Paper. It also led to numerous technical challenges (for instance: Sharratt v London Central Bus Company Limited and other appeals (the accident Grooup Test Cases), Hollins v Russell and other appeals [2003] ECWA Civ 718). Although some doubts were voiced by the respondents regarding the scope of the changes, one ought to see the transformation of the regime proposed by the DCA as the step in the right direction (towards simplicity and away from technical challenges and confusion). Let us analyse what changes were outlined in the summary:
1. The Conditional Fee Agreement and Collective Conditional Fee Agreement Regulations, now in force, were declared "not necessary or effective". These will be revoked from 1 November 2005 (they will not be applicable to all agreements concluded on or after 1 November 2005).
2. The conditional fee and collective conditional fee agreements shall be governed by a number of legislative mechanisms (some already in force, others to be introduced or amended):
i. Section 27 of Access to Justice Act 1999 - to provide regulatory requirements for CFAs (the Act to be found at http://www.opsi.gov.uk/acts/acts1999/19990022.htm).
ii. Law Society's professional rules to regulate solicitor-client matters (to be developed).
iii. Civil Procedure Rules to regulate costs issues between the parties.
3. The Law Society, APIL and FOIL are to develop model agreements and supporting guidance in line with the new regime.
The tendency is to simplify and deregulate CFAs, to render the lawyer - client matters the responsibility of the Law Society and its members. One can observe the will to further privatise the CFA system - instead of extenstive regulation, the market forces are to ultimately help determine the quality of the agreements and the protection for clients.
The doubts of the respondents concerned, among others, the ability of the Law Society to effectively control the conduct of solicitors in these matters, or the remaining complexity of Section 58.
Tuesday, August 09, 2005
Conference on 'Costs of Litigation' in England and Wales!
As part of our research on Costs and Funding of Litigation in Europe and beyond, we are organising a Conference on 'Costs of Litigation in England and Wales'. This Conference is the first in a series of Conferences - stay tuned!
The Conference will take place on 9 December 2005 at the Centre for Socio-Legal Studies, Manor Road, Oxford
Registration 9 am, Start 9.30 am, buffet lunch included, finish 4.30 pm
Issues to be addressed:
Is there a compensation culture in the UK?
Does the litigation system deliver value for money?
Have the Woolf reforms led to a decrease in costs and shorter cases?
How predictable are litigation costs?
Are these features valuable: Legal Aid; the CFA system; fixed fees?
Are costs proportionate to sums recovered?
How many claims are spurious?
Do we have enough, or not enough, access to justice?
The speakers will include judges, lawyers, representatives of the Government and academics.
The exact programme and list of speakers will appear on our blog soon!
The Conference will take place on 9 December 2005 at the Centre for Socio-Legal Studies, Manor Road, Oxford
Registration 9 am, Start 9.30 am, buffet lunch included, finish 4.30 pm
Issues to be addressed:
Is there a compensation culture in the UK?
Does the litigation system deliver value for money?
Have the Woolf reforms led to a decrease in costs and shorter cases?
How predictable are litigation costs?
Are these features valuable: Legal Aid; the CFA system; fixed fees?
Are costs proportionate to sums recovered?
How many claims are spurious?
Do we have enough, or not enough, access to justice?
The speakers will include judges, lawyers, representatives of the Government and academics.
The exact programme and list of speakers will appear on our blog soon!
Tuesday, July 05, 2005
Article on Nordic compensation schemes soon to be published!
We are very pleased to announce that Dr Hodges has now completed his very interesting article on the Nordic no-fault compensation schemes. The Article will soon be published. Further details will follow - please stay tuned!
Friday, April 08, 2005
Conference on No-Fault Compensation Schemes in Europe
The Centre for Socio-Legal Studies at Oxford University organised a Conference:
'Nordic No-Fault Compensation Schemes: A solution to unforeseen product injuries throughout Europe?' on 16th March 2005. Speakers included representatives of the Nordic no-fault compensation schemes, representatives of the new French ONIAM scheme, a representative of the British National Health Service, and various other academics and legal practitioners from Europe and the US. Please use the link to the CSLS to obtain more information about the Conference.
'Nordic No-Fault Compensation Schemes: A solution to unforeseen product injuries throughout Europe?' on 16th March 2005. Speakers included representatives of the Nordic no-fault compensation schemes, representatives of the new French ONIAM scheme, a representative of the British National Health Service, and various other academics and legal practitioners from Europe and the US. Please use the link to the CSLS to obtain more information about the Conference.
Tuesday, April 05, 2005
Welcome to Product Liability Watch
Check here soon for coverage of product liability developments, brought to you by scholars from the Centre for Socio-Legal Studies.
Stay tuned...
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