Discouraging excessive liability claims
EVEN in Aristophanes' time, to ``win [a] lawsuit [was to be] happy.'' The trouble is that the quest for happiness today is altogether out of control. Everyone has a dead-wrong story to illustrate the madness of our litigiousness. In one case the parents of a child who chipped a tooth on a playground swing successfully sued for $1 million. Payment of the judgment was far from the conclusion of the story, however.
The real end came when the community closed the playground; insurance coverage had become prohibitive. How much of the country must be shut down because liability insurance is out of reach?
To discourage excessive liability claims, I propose reducing the actual award given the claimant when it is substantially less than the amount sought in the suit. Perhaps 10 percent of the difference between the original claim and the final award would be appropriate. When deciding on the amount for which to sue, this might incline the claimant and his or her attorney against suing as if ``the sky is the limit.''
Another approach is the suggestion of legislation to cap court judgments for successful litigants. The legislatures of Maryland and Washington have already enacted caps. Medical malpractice awards are capped in Indiana.
White House leaks indicate that the President, despite his belief in having states assert responsibility on social issues, is considering a national cap on liability awards of $100,000.
A panel appointed by New York Gov. Mario M. Cuomo urges a $250,000 ceiling on payments in liability actions. Penalization of ``frivolous'' lawsuits is also urged.
But the governor isn't convinced by the arguments for a cap. Would a cap of $250,000 sufficiently compensate for the pain or immobility or lost physical faculties that do genuinely victimize some among us?
An ambulance chaser faced with a stringent cap on the judgment that can be won in a liability suit may, of course, refrain from goading someone into filing suit. The big payoff and the prospect of a 40 or 50 percent slice of it will no longer be there to inspire the lawyer.
The drawback, however, is that restricting lawsuits this way will be on the backs of those whose lives may have been devastated and who will now not have adequate recourse for compensation.
But, in fact, the one value need not be at the expense of the other. Substantial action can be taken to discourage excessive liability claims without disadvantaging those few claimants who on an equitable basis should win very large settlements.
Leonard M. Greene is president of the Institute for Socioeconomic Studies, White Plains, N.Y.