Petty sue

Common Good, a new body led by Covington vice-chairman Philip Howard, is aiming to kill off the claim culture in the US. Jon Robins asks: is this public spirit, or just self-interest?

So just what is wrong with the US legal system? “You want an example? Here’s one I found the other day,” says Philip Howard, founder of a powerful new law reform coalition called ‘Common Good’, and the scourge of all good US trial lawyers.
Howard, who also happens to be vice-chairman of US law firm Covington & Burling, relates how the child of one of his colleagues recently returned from summer camp with bad sunburn. “All the camp staff were told they weren’t allowed to put sunscreen lotion on the children because they might be accused of ‘an unwanted sexual touching’,” the lawyer says with growing incredulity. “In most schools in the US, teachers are forbidden from touching children, so if there’s a crying first-grader you can’t put your arm around the child. Now that is crazy – quite literally crazy.”
As Common Good sees it, this tale illustrates just how insidious lawsuit culture has become in the US and how paralysing is the ‘fear of law’ (as they would put it) that it engenders.
When The Lawyer spoke to Howard, it was a big day for the group. It has such luminaries as former Speaker of the House of Representatives Newt Gingrich and Senator George McGovern on its board. Today another political heavyweight, Senator Mike Enzi, was to introduce legislation geared towards reducing medical malpractice litigation by allowing states to Spilot new ways to compensate patients for doctors’ errors. It is legislation backed by Common Good.
“Let’s face it, our medical litigation system is broken,” argues Enzi. “It doesn’t work for patients or healthcare providers. Even worse, it replaces the trust in the doctor-patient relationship with distrust and fear – fear of the law.”
Later the same day Howard will appear on NBC’s The Today Show to explain how he would fix the “sorry state of justice in American healthcare”, as the lawyer put it in The New York Times editorial he wrote the previous week. It is fair to say that the Common Good movement, which only began in April last year, is gathering momentum with every passing month.
Although the issue of tort reform – cutting down the number of civil law suits, reducing lawyers’ fees and limiting punitive damages – might seem dry and academic for mainstream tastes on this side of the Atlantic, in the US it is political dynamite and has been for years.
A number of claimant lawyers have become multimillionaires on the back of class actions, such as the tobacco and asbestosis claims. They have also been unstinting in their generosity to the mainly Democrat politicians who have so far blocked attempts at reforms. According to one survey, trial lawyers were the Democrat Party’s largest industry donor in the last presidential election.
“It’s the perfect political issue because it’s a stalemate; and so each side stands across their lines and hurls abuse at the other,” observes Howard, a card-carrying Democrat who believes that his party has “sold out to a special interest group”. “We’re comforted in the knowledge that nobody is going to get anywhere,” he adds.
In fact, the New York lawyer contributed the introduction to the then vice-president Al Gore’s book, Common Sense Government, in 1995. Although the debate between Democrats and their long-time benefactors in the legal profession, the big business-backed Republicans, has been stalled for many years, there is beginning to be some movement. Tort reform could well be a pivotal issue in the 2004 presidential campaign and prominent in the platform on which President Bush will seek re-election. This is the context in which Common Good is the group that is making the running.
In fact, Howard resists the ‘tort reformer’ tag – what Common Good is about is far bigger than that. “It’s legal reform,” he says. “It applies more broadly than merely tort, which has become synonymous with corporate legal reform, rather than legal reform that helps real people; and also it’s synonymous with putting limits on crazy verdicts which we think are just Band-Aids.”
Such radical thinking has made him few friends among the legal community. “The new stalking horse for tort reform,” is the view of Jere Beasley, an Alabama litigation specialist. He reckons that Common Good has “the sole purpose of protecting corporate wrongdoers”.
Carlton Carl of the Association of Trial Lawyers of America (Atla) argues that it is entirely disingenuous for a top lawyer at a leading corporate defence firm to head an organisation that purports to be for the ‘common good’, when the most obvious beneficiaries would be his own clients. “Almost every effort to limit the legal rights of families has been spearheaded by the tobacco industry, and members of his law firm have worked for them for decades,” says Carl. “[Howard] represents the interests of the corporate clients of his firm and other corporate interests and certainly not the interests of American families, consumers or workers.”
Covington is well known for representing tobacco companies, including the Tobacco Institute. According to Atla, Common Good is just another lobbying group representing the interests of the tobacco, insurance and drug industries.
Howard is familiar with the argument of his detractors, that he is ‘on the take’ from his big money clients. “I work for a corporate law firm but not in these areas – I do merger and acquisition work,” he replies. “I wish I were getting paid instead of simply getting deductions from my income by spending all my time doing this.”
In 1983 Howard set up M&A specialist firm Howard Darby & Levin, which merged with Covington in 1999. The lawyer now spends half his time fee-earning and the other half campaigning on behalf of Common Good.
Howard argues that he is reflecting views previously expressed in his two books, The Death of Common Sense: How Law is Suffocating America, published in 1995, and 2001’s The Collapse of the Common Good: How America’s Lawsuit Culture Undermines Our Freedom. The former, despite being a polemic about law reform, made The New York Times bestseller list.
“I don’t think it’s a great retort for critics to say, ‘We don’t trust you’, and then not address the merits of the argument,” he says. “But also, our coalition is bipartisan and includes consumer advocates.”
For his own part, Howard is not that impressed with Atla. “They’re hugely powerful because of the money they put into the Democratic funds – but their real power comes not so much from the money, but from their frame of reference. Everybody seems to accept that there is this right handed down from Moses to sue for everything, and one of our points is that this undermines everybody’s freedom.” He hopes that if Common Good can win over the consumer groups, that will leave, as he puts it, “the Democrat leadership plus the trial lawyers” on their own. “And that’s not a very attractive political coalition,” he adds.
Another more serious criticism thrown at Howard is that his facts do not add up and his reliance on anecdotal evidence fails to carry his argument. Consumer campaigner
Ralph Nader, of the Center for Study of Responsive Law, recently called the lawyer “an empty vessel” and argued that the “lawsuit crisis” did not exist. According to Nader, the number of legal actions has actually been falling steadily since 1996. “In other words, [Howard] doesn’t have a factual foundation,” he argued in The Washington Post. “He’s into psychiatry and not facts. He relies solely on this fear factor. You know what a frivolous lawsuit is? It’s any lawsuit against us.”
One example that has been cited is how Howard has held up Stella Liebeck, the 79-year-old woman from New Mexico who won a $2.9m (£1.8m) verdict against McDonald’s after spilling a cup of its piping-hot coffee on herself, as the “poster case” for the law reformers. While the case is always hauled out by the defendant lobby as an example of a disproportionately high award for a relatively minor accident, such analysis immediately falls apart upon closer inspection. As has been fairly well recorded, the case was not a frivolous claim (Liebeck suffered third-degree burns) and the jury made a high award, later reduced to $640,000 (£398,000), because it felt that the fast-food giant should have settled.
So how do the Common Good principles apply to the treatment of clinical negligence claims in the US healthcare system? Howard portrays a system that is in the throes of a collective nervous breakdown – and the villain of the piece is the legal profession. As a result of litigation, doctors are going on strike and quitting because of potentially ruinous increases in liability insurance. Howard claims that in the region of one in every 10 obstetricians say they are stopping delivering babies as they are unable to afford indemnity insurance, which in Florida costs as much as $200,000 (£124,000) a year. The costs of defensive medicine could be as much as $100bn (£62.13bn) every year, which would be enough to provide healthcare for 411 million Americans.
Common Good is calling for “a reliable form of justice” and pushing for the creation of specialised medical courts, staffed by expert judges without juries, who would screen claims, make rulings and award reasonable compensation for actual economic loss, plus pain and suffering damages in accordance with a scale.
“It’s so that people know where they stand and so there’s a constancy and predictability,” Howard says. “Justice is widely perceived to be – and studies show this to be the case – more or less random in the healthcare system.” Most clinical negligence victims get nothing, he argues, while others receive lottery-like jury awards, even when the doctor did nothing wrong.
As Howard acknowledges, such ideas – and in particular scrapping jury trials – are regarded as “calling into doubt the Ten Commandments”. Only last month the US Senate overwhelmingly rejected the Patients First Act to cap jury awards at $250,000 (£155,300) – a proposal that Howard likens to applying a bandage to a mortal wound.
According to Common Good, the solution to a growing litigation culture starts with the recognition that no one has a right to sue. “There’s a point about lawsuits that’s gotten lost in this society – and maybe in yours as well,” Howard argues. “Suing is not a free market instrument – it’s not an aspect of freedom at all; it’s using the power of the state against someone else. And it’s precisely because it’s a use of state power that it’s important for someone that’s neutral – a judge – to constantly be vigilant, to draw the boundaries of what is a valid claim and what isn’t. Otherwise it becomes a tool for extortion.” He believes that in the US, and “possibly the UK”, this ‘tool for extortion’ is changing the culture of society.
“Instead of a culture of responsibility, you get a culture of blame; and instead of feeling free to make reasonable choices, people spend the day looking over their shoulders,” the lawyer argues. “It’s really important for people to understand the power of law and for people to make deliberate choices for the common good, not for it to be an open season available to anyone who wants to go shooting.”
So is it impossible to put the litigation genie back in the bottle? It is not that hard, Howard reckons. “The courts assert authority, and judges start dismissing claims and not allowing claims where you aren’t looking where you’re walking, or where your child fell off the see-saw,” he says. He hopes that his medical courts are a way of wresting back that control.
The trial lawyers have heard it all before, though, and they remain deeply cynical about this new group. “Corporate interests have spent billions of dollars over the last 30 years trying to protect themselves and other corporate wrongdoers from the people they hurt,” says Atla’s Carl. “And they succeed because they have the money to buy hundreds of lobbyists, PR firms and front groups like his. Whereas US consumers and workers don’t have that kind of money to combat the propaganda. They’ve just come up with a prettier name this time. You can put lipstick on a pig, but it’s still a pig.”