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Professor Newt's Contract With Corporations
by Ralph Warner, Publisher
Copyright © 1995 Nolo Press
Newt Gingrich has repeated the words "legal reform" so often in
selling his
"Contract With America" that many weary listeners have started to
believe the
Contract must contain something good for ordinary folks. What few people
seem to
realize is that it speaks almost exclusively to America's corporate
elite.
Gingrich's proposals include limiting the amounts that can be recovered
in
personal injury cases, putting caps on punitive damages and banning
suits
against drug companies for injuries caused by FDA-approved medications.
The
Contract also seeks to discourage lawsuits by making losing litigants
pay the
other side's attorney fees.
Relying on well-publicized horror stories of a few huge jury verdicts
for trivial
injuries, Gingrich claims that these proposals amount to fundamental
legal reform
in the broad public interest. To understand why he's wrong, you need to
know a
little about just where these proposals came from.
For at least 30 years, a battle has raged over how much to compensate
people
injured by defective products, lousy medical care or in other ways.
Lawyers, and
the many consumer groups they provide major funding for, have supported
the
current fault-based personal injury system, with its potential for huge
jury
verdicts--of which lawyers typically pocket 30%-50%. Insurance companies
(sick of
paying these huge judgments) and big corporations (similarly tired of
paying
ever-escalating premiums) have taken the other side, arguing for various
ways to
limit judgments.
Inside the Beltway, this battle plays out like this: To protect their
cash cow,
trial lawyers have tended to contribute big chunks of money to
Democratic
politicians. They gave about $31 million from 1989 to 1994, according to
the
American Tort Reform Association. Big corporations, on the other hand,
have
mostly financed Republicans, who favor putting limits on product
liability,
medical malpractice and other types of personal injury lawsuits. Major
corporations donated $23.5 million to this end in 1993 and 1994,
according to
Citizen Action, a coalition of consumer groups.
Little wonder, then, that the Republicans' Contract With America
includes a
number of corporation-friendly proposals. All this would amount to
little more
than special interest politics as usual, with the Republicans rewarding
their
corporate friends and punishing their trial lawyer enemies, save for one
thing:
Gingrich's claim that the Contract espouses true legal reform.
Our crippled legal system needs to be returned to its democratic roots,
but no
one in Washington seems to have a clue about where to begin.
Malarkey. In a worldwide marketplace, it's just plain silly to claim
that a few
less jury verdicts against big corporations will result in lower prices
for you
or me, or make loads of innovative products or services available, once
their
providers are no longer afraid of lawsuits.
Indeed, looking at the Republican proposals from the perspective of Elm
Street,
rather than Wall Street, it's hard not to yawn. Nowhere in the Contract
do
Gingrich and his conservative think-tank allies deal with middle-class
America's
two biggest legal problems: that 150 million citizens can't afford the
legal
information they need in their day-to-day lives, and that our civil
court system
simply does not work to resolve the average person's disputes.
Take a look for yourself. Where does the Contract try to provide legal
help for a
single mother trying to get a restraining order against a violent
ex-husband?
Where does it make it easier for a family, trying to transfer a deceased
parent's
property to the kids, to avoid the cost and delay of probate? How does
it help a
divorced father petition a court to increase the time he can spend
visiting his
five-year-old daughter?
The fact that Professor Newt's pro big business proposals do almost
nothing to
help ordinary Americans doesn't mean that some aren't sensible. Nolo
supports
several similar proposals, including tight restrictions on punitive
damages. And
making the loser pay the winner's attorney fees makes sense in some
situations--for example, if a plaintiff rejects a compromise settlement
and a
jury subsequently awards the plaintiff less.
These proposals are welcome because the Democratic Party, which has
controlled
Congress for so long, has regularly beat back all challenges to their
tort lawyer
friends' right to recover multi-million dollar verdicts. Personal injury
lawyers
have become as arrogant and inflexible in defending their right to milk
the legal
system as the National Rifle Association is when it comes to fighting
restrictions on assault weapons.
But the fact that, given his opponents, some of Gingrich's
business-friendly
proposals for change look sensible isn't saying much. Our crippled legal
system
needs to be returned to its democratic roots, but no one in
Washington--including
both Newt and, for that matter, Bill--seems to have a clue about where
to begin.
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