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by    Mon, Dec 19, 2005, 01:17 AM

In its’ November issue, Texas Monthly magazine published a story by Senior Editor Mimi Swartz with the inflammatory headline “Hurt? Injured? Need a Lawyer? To Bad!” The story can be simply summarized: Small group of rich business types spend millions to pay off the legislature to pass a tort reform bill that locks poor deserving Texans out of the Court House to the benefit of these same rich business types. In this case the villains of the story, the rich guys, come packaged in an organization called Texans for Lawsuit Reform (TLR).

Needless to say the TLR didn’t like Ms. Swartz’s article and provided Texas Monthly with a lengthy brief claiming to set the record strait. Texas Monthly responded it would allow TLR to present a condensed version of its accusations and apologize for any mistakes but warned it would rebut the rebuttal. TLR passed and responded on its own Web site and via a direct mail campaign. Now Texas Monthly has posted TLR’s original six point rebuttal of Swartz’s story along with its rebuttal of that rebuttal on the Texas Monthly Web site. Unless you are a lawyer my advice is not to bother reading either - unless you lack a life.

So how fair and balanced was the article? First, a disclaimer: I ran a firm in the mid-90s (Temerlin McClain PR) that worked for the TLR and I managed the account. Let me add that I was not just a disinterested hired gun working for a pay check. I believed in everything the TLR was about. While at Texas Business and later at the Dallas Morning News I regularly outraged trial lawyers with stories, columns and editorials calling for reforms they saw as a threat to their incomes and, if you grant them sincerity (and I do) – a threat to justice for average folks.

So what was my take on Swartz’s article? Was it an editorial or a fair and balanced discussion of tort issues? Neither. It was a wet kiss for the Texas Trial Lawyer’s Association (TTLA). The title said all, and carefully selected, but mostly accurate, facts were presented to back up the title. While that may bother the TLR it doesn’t bother me. I did that to the Trial Lawyers all the time. And Texas Monthly is not the Texas Lawyer. Legal briefs don’t sell magazines - human interest stories do.

What Swartz did do was wave a bloody shirt. The trial lawyer style is to present a handful of egregious cases and suggest there is no amount of money to adequately compensate the wronged (they are usually right). Their argument then proceeds to assert that whatever problems the system might have it could not be fixed without denying these poor souls due justice. In other words: Look at the trees not the forest.

That was because the forest was dying. The soaring cost of insurance premiums in Texas was causing doctors to retire early, placing an enormous burden on small businesses, and making out-of-state companies think twice before doing business in Texas. Indeed, many small businesses were “going naked” (carrying no insurance). If it was hit with a law suite a “naked” business just went out of business leaving a lot of unemployed people and a plaintiff with zero.

The problem with the system was that juries were willing to make huge awards to the desperate little guy because they felt he deserved help regardless of fault and since the insurance company was paying – well, what the hell. Of course, it was really you and I paying either through higher insurance premiums of our own, or higher prices charged us by businesses trying to cover higher premiums.

The Trial Lawyers have always dismissed the idea that headline grabbing billion dollar awards have any affect on insurance premiums. They correctly note only a tiny percentage of cases ever go to trial and of those a tiny percentage ever delivers outlandish jury awards. What they don’t say is that these set the risk ceiling. Insurance companies look at what they might have to pay in a trial based on the few that actually go to trial. If they see an upside risk of say $100 million they might rather settle for policy limits of $10 million than defend a case they otherwise think they can win and pay zip. Call it justice by actuary.

The problem wasn’t economic damages that could be fairly easily and accurately fixed but “punitive” damages awarded by juries for subjective pain and suffering. These damages were out of control. Juries were coming to see the tort system as a matter of wealth redistribution. The tort reformers were about taming these punitive damages. Yet, punitive damages are where Trial Lawyers make their money.

And this is the crux of the matter. It is absolutely true that most Texans cannot afford a plaintiff’s lawyer on even a slam dunk case. Trial lawyers take cases based on “contingency fees” that allow them to collect a big percentage of punitive damages. A large prospective settlement means a large prospective fee and so trial lawyers will tote the note for the case (actually there are investors often willing to fund law suits). If you cap punitive damages you cap Trial lawyer income. If the sad people in Swartz’s article are unable to find lawyers it is because the lawyers don’t think they can make enough money not because the law locked anyone out of the court house.

Texas Monthly defends the article by noting Swartz ends her tale with a fair and balanced summation: “In the battle between the trial lawyers and the tort reformers, each side accuses the other of excessive greed and mendacity; each side is convinced that only its side represents the truth. The middle ground is reserved for the all-too-human collateral damage of a bitter ward involving big money and partisan politics, seemingly without end.”

I’ll grant that while neither side wins a “warm and fuzzy” award both sides are mostly sincere. I’ll grant both sides represent big money. I’ll grant that trials lawyers are mostly Democrats and reformers overwhelmingly Republican. But I cannot grant that placing “all-too-human collateral damage” between the two illustrates fair and balanced. This was a wet kiss.

Texas Monthly published a story in November about the consequences of tort reform. Texas Monthly thinks their article was fair and balanced The fighters for Tort reform think it was an outrage. Scott thinks it was neither.

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