Richard Ward, CEO of Lloyd’s of London, was telling USA Today recently that the rest of the world is catching up to the United States in the ignominious realm of lawsuits. He said growing litigiousness overseas is driving up costs and stifling risk-taking there, as it already has here. The incredibly high litigation costs in the United States — costing each American citizen $625 per year — are “a major disincentive when looking to do business in your country,” he warned.
This begs the question: Shouldn’t we be looking to gain competitive advantage by reining in excessive and unjustified class-action lawsuits as the rest of the world repeats our mistakes? After ignoring a string of high-profile convictions of their biggest stars, class-action lawyers have so far funneled a whopping $107 million into 2008 Democratic House and Senate race coffers. Will either party’s presidential ticket keep a lid on the lawyers’ greed?
It won’t be the party whose presidential candidate — Sen. Barack Obama — held a major fundraiser this summer in conjunction with the national meeting of the trial lawyers’ powerful political lobby. And it’s not the ticket whose vice presidential candidate — Sen. Joe Biden — has a zero rating on lawsuit reform issues.
In the 13 most important tort reform votes in the previous four Congresses — as rated by the National Association of Manufacturers (NAM) — Biden voted wrong 13 times. Obama’s Senate voting record is briefer but no less worrisome. The only time he voted right was on the Class Action Fairness Act, which makes it harder to move suits from state to state in search of a particularly lenient judge. That bill passed the Senate with a 72-26 bipartisan majority, so Obama’s vote made no difference. Before the final vote, however, he voted three times for “poison pill” amendments that would have eviscerated the bill’s effectiveness.
Sen. John McCain voted with the reformers nine of the 13 times cited by NAM, but occasionally sided with the trial lawyers on “patients’ rights.” His record gives evidence of a more balanced, case-by-case approach. Alaska Gov. Sarah Palin, meanwhile, comes from the state that the Pacific Research Institute ranks as having the second most favorable legal climate in the country. That’s one reason businesses like locating in Alaska — much as they will more frequently choose to come to the United States if we elect a president who understands the need to stop class-action lawsuit abuses while the rest of the world goes the other way.