Legal Briefs newsletter


Fighting Lawsuit Abuse and Exposing Frivolous Lawsuits


Issue 34 - November 18, 2003

In this Edition:
Alien Tort Claims Act Used Against Poor Africans
Tort Du Jour: Even Socialized Medicine Harmed by Excessive Lawsuits
Testimony: Lawsuits Literally a Lottery


Alien Tort Claims Act Used Against Poor Africans


America's 34-million African-Americans should be outraged by the campaign of economic blackmail that a handful of profit-driven personal injury lawyers are waging against the financially beleaguered Republic of South Africa.

Against the expressed wishes of the revered Nelson Mandela and President Thabo Mbeki, the lawyers are filing class-action lawsuits in courts against U.S. corporations who did business in South Africa during apartheid - unjustly claiming that their mere presence in the country aided and abetted that nation's racist government.

In fact, the companies being sued were signers of the Sullivan Principles on fair labor principles, which Mandela and Mbeki credit with embarrassing laggard European and Asian firms to improve their human rights practices.

The fact that the litigation jeopardizes badly needed foreign investment in South Africa hasn't deterred the already wealthy American lawyers who stand to walk away with millions of dollars if they are successful.

That would be a disaster for South Africa, a nation of 43 million with a 37 percent unemployment rate and 50 percent of the population living under the poverty line. The situation is made much worse by the country's incredible AIDS pandemic: 20.1 percent of the adult population have the debilitating disease and 360,000 men, women and children die from it annually

The American personal injury lawyers - virtually all of them multi-millionaires - have a strategy that is downright self-serving, to say the least.

Their first tactic is to make outrageous charges against the corporations, using the resulting negative publicity to bully them into signing a lucrative one-sided settlements.

Those businesses with backbone enough to seek "justice" encounter the lawyers' fallback strategy, which is to proceed with trials before friendly, hand-picked judges who foster multi-million dollar jury verdicts.

In either case, poor black South Africans will get what amounts to peanuts - very small compensation for participating in a lawsuit that leaves their stagnant economy with even fewer jobs as foreign companies delay new investment and expansion plans, and, in some cases, shutter their factory doors and leave.

Ironically, the lawsuits against more than 30 U.S. corporations do not contain any specific allegations that the companies committed human rights violations in South Africa.

Far from it. All of the firms instituted non-discriminatory fair employment policies that provided black workers with good salaries and fringe benefits, safe working conditions and the right to join labor unions. And all of the companies, it should be noted, have better than average minority-hiring records at their facilities in the United States.

The personal injury lawyers are suing the American companies under the Alien Tort Claims Act, a law enacted in 1789 to prevent pirates from disposing of booty in U.S. seaports.

The law, which allows foreign plaintiffs to litigate in U.S. courts, lay dormant for some 200 years, before the lawyers managed to convince a judge that it might be used to sue American companies with investments in South Africa

The South African government vigorously opposes that twisted interpretation. In effect, asking the lawyers to cease and desist.

Mandela is particularly upset by the lawyers' suggestion that outsiders - U.S. courts thousands of miles away - can do a better job at remedying the wrongs of apartheid than South Africa's own Truth and Reconciliation Commission, which considers claims and grants reparations to apartheid victims.

"South Africans are competent to deal with issues of reconciliation, reparation and transformation amongst themselves without outside interference, instigation or instruction," Mandela said recently. "We have dealt with our political transition in that manner and we are capable of dealing with other aspects of our transformation in similar ways."

Penuell Maduna, South Africa's Minister of Justice, warns that the U.S. lawsuits threaten foreign investment in his country, and notes that "we talking to the very same companies named in the lawsuits about investing in post-apartheid South Africa."

The Bush Administration agrees and has filed a brief seeking to limit ATCA lawsuits in U.S. courts on the grounds they pose a direct threat to national security and foreign policy interests and could hinder America's war against terrorism.

Federal judges should respect the wishes of Presidents Mbeki and Bush in this matter and rule such lawsuits have no standing in U.S. courtrooms.

To do less is to embrace a paternalistic theory that smacks more than faintly of colonialism and racism.

It's time to end the lawyers' quest for jackpot justice at the expense of U.S. foreign policy interests and South Africa's desperate need to revive a decaying economy.

-by John Meredith. John Meredith is a member of The National Center-sponsored African-American leadership group Project 21.

Even Socialized Medicine Harmed by Excessive Lawsuits


Dr. Eamonn Butler of Britain's Adam Smith Institute has a cautionary tale from across the pond both for those who oppose legal reform and those who would increase government's role in health care -- often the same folks.

Says Dr. Butler:

Socialized medicine has betrayed its original aims. Far from providing free care to all, it can't even provide them with free dignity any more -- as Britain's National Health Service shows.

Take Air Marshall Sir Patrick Dunn, the 90-year old World War II hero, who fell recently at home. His 92-year-old wife called the emergency number. But the paramedics who arrived left him on the floor begging for help, saying that 'regulations' forbade them lifting him.

Why? Because the NHS authorities don't want to face lawsuits from staff injuring themselves when lifting heavy patients. Sir Patrick, though, weighs less than 140 pounds. But under socialism, rules is rules.

Poor Lorraine Wolsenholme, an MS sufferer, weighs even less. But she's had to sit, eat -- even sleep -- in a wheelchair for the last 15 months because nurses are banned from lifting her into bed. She reasonably complains that she's being treated worse than an animal.

Quite right. Next time I'm sick, I'm not going to a state-run hospital. I'm going to the vetinary. Vets at least treat their patients as valued individuals, and treat them with some dignity. That's because their livelihood depends on it. But when people's livelihood depends on complying with bureaucratic rule-books, don't expect much in the way of service - or even animal levels of dignity.

-Blog Entry of Dr. Eamonn Butler, Adam Smith Institute, September 22, 2003, at http://www.adamsmithblog.org/


Testimony

The cause of the medical liability crisis is a badly broken system of litigation that serves the interest of specialized trial lawyers, not patients:

* The vast majority of medical liability claims (up to 70%) do not result in any payments to patients. Less than 2% of cases result in trial victories for plaintiffs. But each of these cases costs almost $25,000 on average to defend.

* Within the very small proportion of jury cases that find for the plaintiff, "mega-verdicts" with large awards of noneconomic damages have been increasing in states that do not have reasonable limits on non-economic damages. For example, there have been over 20 verdicts of $9 million or more in Mississippi since 1995, and individual cases in Pennsylvania and Mississippi have reached the $100 million level.

* Yet even patients who are lucky enough to get awards don't get most of the money. Lawyers' fees account for 40% or more of the multimillion-dollar payouts. And less than 30% of all the money that doctors pay in liability insurance fees goes to patients. And patients must wait five years on average for these payouts (longer in cases that go to trial).

* This system rewards personal injury lawyers who adopt a "lottery" strategy: seek out patients and encourage them to file lots of claims, even though the vast majority will have no merit and the patient will get nothing; and then encourage patients to wait it out through years of litigation for a small chance of a big win. If exaggerated awards are possible, even if very unlikely, a personal injury lawyer only needs to win one out of hundreds of cases to make it all worthwhile -- from the standpoint of the lawyer. But the vast majority of patients get nothing for their troubles, doctors lose billions in insurance costs and time and may have to leave their practice altogether, and all patients pay higher prices and get worse care as a result.

-The President's Framework for Improving the Medical Liability System, available online at http://www.whitehouse.gov/infocus/medicalliability/pg5.html


 Original articles in this edition of Legal Briefs may be reprinted provided source is credited.




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