Michael Ejercito
08-05-2004, 07:49 AM
Sharing the lawsuit wealth
Thomas Sowell
August 3, 2004
My ears picked up when my wife told me that she was one of the
beneficiaries of a class-action lawsuit that brought a settlement of
more than $100 million.
"How many millions do you get?" I asked. I could envision our
retiring to the Riviera or some such place. Here was our chance to
become part of "the rich" we hear denounced during election years.
It turned out that this was a lawsuit in behalf of some stockholders,
and her few shares of stock would receive 58 cents each -- minus
various deductions. It probably wouldn't add up to enough to buy a cup
of coffee at Starbucks.
What about the lawyers who won this settlement?
They would receive more than $25 million for their services, which is
a lot of cups of coffee, even at Starbucks.
This was an all too typical scenario for a big-bucks class action
lawsuit. A few years ago, I was also one of a zillion beneficiaries of
a class action lawsuit, but I cannot recall how much money -- or
rather, how little money -- I was entitled to.
I am not sure it would have covered the cost of a first-class stamp
to write in and claim my share.
Class action lawsuits are seen by some as a wonderful way for
high-minded lawyers to come to the rescue of "the little people" who
individually do not have a large enough claim to justify hiring their
own attorneys, but who in the aggregate have claims running into the
millions.
It is a lovely vision -- and, like so many other lovely visions -- it
bears little resemblance to reality.
Another lovely vision in the legal profession is the "pro bono"
lawyer -- the lawyer who charges his clients nothing but fights the
case "pro bono publico," for the good of the public. At first it
sounds like these lawyers are selfless crusaders for us all. But there
are pro bono lawyers who make more money than you or I are ever likely
to see.
When pro bono lawyers win a case against a local, state or federal
government agency, they are often awarded attorney's fees far
exceeding what any client would be likely to pay them. It is precisely
the "publico" -- the taxpayers -- who get hit with the hefty bills for
pro bono lawyers.
Then there are the so-called "trial lawyers" -- who seldom actually
go to trial. They bring charges against businesses like Wal-Mart and
hope that the threat of bad publicity, with falling sales and
declining profits, will cause these businesses to settle out of court
to the tune of millions of dollars.
Trial lawyers also sue doctors and hospitals, whose insurance
companies are often afraid to go to trial, for fear that a slick
lawyer with junk science and a gullible jury can cost them many
millions of dollars.
John Edwards was one such trial lawyer before he became a Senator and
now a vice-presidential candidate. His specialty was claiming that
brain-damaged babies were the fault of doctors who failed to have
these babies delivered by Caesarian section.
With a heart-wrenching human tragedy, a lawyer skilled at playing on
the jury's emotions, and a well-insured defendant, it was virtually
inevitable that millions of dollars in damages would be awarded. John
Edwards is estimated to have collected $60 million.
Since then, a massive factual study has been done, and validated by
medical authorities here and in countries as far away as Australia,
showing no such correlation between Caesarian operations and the
prevention of brain-damage in babies.
Such operations have now increased greatly, protecting doctors from
lawsuits but not protecting babies from brain damage. The cost of
health care is driven up, not only by huge damage awards, but also by
costly medical procedures that are unnecessary for the patients'
health but imperative to keep doctors from being ruined financially by
big damage awards or skyrocketing insurance costs.
Democrats who loudly proclaim a need to "bring down the cost of
health care" haven't the slightest interest in stopping trial lawyers
from driving up the cost of health care. Every attempt to penalize
those whose charges prove to be false is bitterly opposed by
Democrats, who receive financial support from trial lawyers.
That support is not chump change like 58 cents.
©2004 Creators Syndicate, Inc.
Thomas Sowell
August 3, 2004
My ears picked up when my wife told me that she was one of the
beneficiaries of a class-action lawsuit that brought a settlement of
more than $100 million.
"How many millions do you get?" I asked. I could envision our
retiring to the Riviera or some such place. Here was our chance to
become part of "the rich" we hear denounced during election years.
It turned out that this was a lawsuit in behalf of some stockholders,
and her few shares of stock would receive 58 cents each -- minus
various deductions. It probably wouldn't add up to enough to buy a cup
of coffee at Starbucks.
What about the lawyers who won this settlement?
They would receive more than $25 million for their services, which is
a lot of cups of coffee, even at Starbucks.
This was an all too typical scenario for a big-bucks class action
lawsuit. A few years ago, I was also one of a zillion beneficiaries of
a class action lawsuit, but I cannot recall how much money -- or
rather, how little money -- I was entitled to.
I am not sure it would have covered the cost of a first-class stamp
to write in and claim my share.
Class action lawsuits are seen by some as a wonderful way for
high-minded lawyers to come to the rescue of "the little people" who
individually do not have a large enough claim to justify hiring their
own attorneys, but who in the aggregate have claims running into the
millions.
It is a lovely vision -- and, like so many other lovely visions -- it
bears little resemblance to reality.
Another lovely vision in the legal profession is the "pro bono"
lawyer -- the lawyer who charges his clients nothing but fights the
case "pro bono publico," for the good of the public. At first it
sounds like these lawyers are selfless crusaders for us all. But there
are pro bono lawyers who make more money than you or I are ever likely
to see.
When pro bono lawyers win a case against a local, state or federal
government agency, they are often awarded attorney's fees far
exceeding what any client would be likely to pay them. It is precisely
the "publico" -- the taxpayers -- who get hit with the hefty bills for
pro bono lawyers.
Then there are the so-called "trial lawyers" -- who seldom actually
go to trial. They bring charges against businesses like Wal-Mart and
hope that the threat of bad publicity, with falling sales and
declining profits, will cause these businesses to settle out of court
to the tune of millions of dollars.
Trial lawyers also sue doctors and hospitals, whose insurance
companies are often afraid to go to trial, for fear that a slick
lawyer with junk science and a gullible jury can cost them many
millions of dollars.
John Edwards was one such trial lawyer before he became a Senator and
now a vice-presidential candidate. His specialty was claiming that
brain-damaged babies were the fault of doctors who failed to have
these babies delivered by Caesarian section.
With a heart-wrenching human tragedy, a lawyer skilled at playing on
the jury's emotions, and a well-insured defendant, it was virtually
inevitable that millions of dollars in damages would be awarded. John
Edwards is estimated to have collected $60 million.
Since then, a massive factual study has been done, and validated by
medical authorities here and in countries as far away as Australia,
showing no such correlation between Caesarian operations and the
prevention of brain-damage in babies.
Such operations have now increased greatly, protecting doctors from
lawsuits but not protecting babies from brain damage. The cost of
health care is driven up, not only by huge damage awards, but also by
costly medical procedures that are unnecessary for the patients'
health but imperative to keep doctors from being ruined financially by
big damage awards or skyrocketing insurance costs.
Democrats who loudly proclaim a need to "bring down the cost of
health care" haven't the slightest interest in stopping trial lawyers
from driving up the cost of health care. Every attempt to penalize
those whose charges prove to be false is bitterly opposed by
Democrats, who receive financial support from trial lawyers.
That support is not chump change like 58 cents.
©2004 Creators Syndicate, Inc.
