30th January 15:34
Jerry Jackson: Trial lawyers (stress)
Jerry Jackson: Trial lawyers
In one of John Grisham's latest novels a legal aide is knocking on the
door of an elderly gentleman. This man has been taking a drug that has
been deemed to cause tumors in a very small percentage of cases. He
signs his name to a legal do***ent and becomes part of a class that
will bring action against the drug company.
Later it is determined he has developed terminal cancer, and as a part
of the class action, he will receive about $60,000 and is prohibited
from any further legal action.
This novel is great reading and gives some revealing details as to how
trial lawyers work, especially as it pertains to class-action lawsuit.
Forgetting the novel and getting back to real life, in my opinion
there is no greater threat to the continued prosperity of this country
than trial lawyers. Much has been communicated about how trial lawyers
have damaged and threatened the medical profession, but it goes much
deeper than medical lawsuits. Many companies have declared bankruptcy,
and others have shut down or had to cut back significantly because of
threatened litigation. When plaintiffs and their attorneys receive
hundreds of million of dollars in many lawsuits, that cost is passed
on to the consumer, the patient or whoever pays the bills.
In addition to potential settlement dollars, the cost in defending
these lawsuits is horrific. Not only the direct legal costs, but also
the stress of this activity, and the potential loss of revenue because
of the top people devoting so much time and energy can be devastating
to the business or operating entity. Many small companies are
especially vulnerable. Most often these companies do not have in-house
counsel. The major producers in smaller companies can have their
production cut in half for a considerable length of time.
Many doctors can tell you horror stories about their legal problems.
It is not unusual for a doctor's malpractice insurance to run as much
as $120,000 per year. Even more important is that only a few companies
will handle such insurance. This should prove that it's not because
the insurance companies are making all the profit. If that were true,
there would be keen competition among the insurance companies to
provide this service.
The abuse by attorneys is especially significant on class action suits
in the business and financial section. If a judge will certify to
class action status, these attorneys can sue for a small amount for
thousands of "victims" and the only ones who actually receive a
substantial financial benefit are the attorneys themselves.
As an example, I have a request on my desk to join a class action
against Lucent Technologies, Inc. Their supposed violation of the law
is so technical it is hardly understandable. Bottom line - if I join
in this lawsuit, I can expect to receive $165 in a few years from the
1,100 shares of Lucent that I own. Even if I owned 10,000 shares of
this stock, I would receive a grand total of $1,500. One of the
attorney groups here will receive 98 million for their efforts. Why
does our legal system allow this type of action where virtually no one
cares about the case except the attorneys who are receiving an
unbelievable amount for their efforts?
The Wall Street Journal has been following class-action suits for many
years. The February 8th issue has a column authored by Dr. Offit who
is a professor of pediatrics at the University of Pennsylvania. Among
the many revealing statements in the column, one paragraph addresses
the breast implant lawsuits. In 1992 the Director of the FDA stated
that there was insufficient evidence that silicone-filled breast
implants were safe. On a precautionary measure he asked the
manufacturers to withdraw breast implants from the market. This latter
action brought about 10,000 lawsuits in 1992. Lawyers then
consolidated these lawsuits and in 1994 settled for 4.25 billion
dollars - the largest class action in history. After the settlement
seven well controlled, carefully performed scientific studies found
that breast implants didn't cause the various connective-tissue
diseases that were claimed. So do you think the 4.25 billion including
the lawyers' fees of hundreds of millions were returned - are you
kidding me? Dow Corning has now filed for bankruptcy.
I will repeat my claim that trial lawyers and the greed that has been
shown in the last 20 years or so is the biggest threat to our future
prosperity. The state of Mississippi has recently enacted legislation
to help control runaway juries and predatory lawyers that were
threatening the economic viability of that state. Let's hope we can
convince our legislatures and the many responsible attorneys that the
actions of some of the trial lawyers are a sincere and legitimate
(Jerry Jackson has lived in Cleburne County for 17 years after
spending 30 years in the public accounting industry)