By Robert M. Klein
When I was in law school, my torts professor explained the economic impact of tort law. Back then, I was too naïve to understand. After practicing law as a plaintiff’s lawyer for over 25 years, I learned how tort law and the economy are deeply intertwined. Now, this issue is playing out before our eyes because of the Covid-19 pandemic.
In the House of Representatives and Senate, debate is taking place over an additional financial relief package (or packages) to support businesses and families facing economic crisis. One significant issue holding up a new bill is whether to and/or how to create liability protections for state and local governments. In other words, limiting Covid -19 claims against businesses, schools, hospitals and other organizations. This delay is affecting those in real need.
Our tort system is based on English tort law. Tort laws were (and are) intended to make our society safer. Businesses and individuals are financially motivated to make safe products, or keep their premises clean and safe, or teach and encourage their employees to drive safely. If they fail, they risk being sued. Remember the essential elements of a tort case: a duty of care, a breach of that duty, and a breach causing harm.
The benefits of tort liability can be seen daily. Cars manufacturers have a duty to make safe cars. Over the past 40 years, car safety has dramatically increased. Cars have safety belts, interiors no longer have sharp edges, and automatic windows have a built-in stop function. When cars had a sudden acceleration problem, auto manufactures blamed drivers. Independent safety investigations led to the discovery showing the cause was a bad software design. Not only was there a criminal investigation and a $1.2 billion criminal penalty, there was also a $1.2 billion dollar class action settlement. People’s lives were saved by economic motivation – fines, lost profits, and tort exposure (a breach of the duty of care leading to harm.)
In 1975, there was a medical “crisis” in California. Liability insurance for doctors for skyrocketing and doctors were threatening to leave the state unless something was done. The answer: cap non-economic damages for victims of medical malpractice and insurers would keep premium costs for doctors under control. That promise was short lived. Still, there remains a $250,000 cap on pain and suffering damages which has not changed since 1975. We know doctors try to be safe – this tort reform benefit helps insurance carriers.
Most plaintiff lawyers I know are responsible and ethical. They will not bring a claim or sue to “extort” money. Handling cases on a contingent fee and paying for costs up front motivates lawyers to take cases that have merit. Proving damages in a Covid case will be hard: yes, there is a duty and harm, but where is the causation? When business is safe, that will be hard to prove. Removing liability risk, may remove the safety incentive.
Let us keep businesses motivated to take proper action to keep everyone safe, including their employees and the general public. Instituting blanket liability protections works against this goal. Here is where the old English system is clear: when the economic burden shifts from the business, which could control the risk by mandating safety protocols, to the public, society at large pays.
Robert M. Klein is the principal of the Law Offices of Robert M. Klein in Los Angeles, where he has successfully represented clients in personal injury cases for over 25 years, with a primary focus on plaintiff-side personal injury matters. You can reach Robbie by e-mail at firstname.lastname@example.org