Study: Pa.’s Tort System Nearly The Worst

A policy institute yesterday released a report that ranked Pennsylvania’s legal climate the sixth worst in the nation in terms of both state policy and cost of litigation.

The San Francisco-based Pacific Research Institute compared the scope and impact of litigiousness on each state and determined that, judging by the financial costs of lawsuits and the risk to entities of getting sued, only four states (Montana, Illinois, New York, New Jersey and Florida) endure a greater legal burden than Pennsylvania.

Homeowners, doctors, farm-owners, product manufacturers and other frequent subjects of lawsuits are, according to the study titled “U.S. Tort Liability Index: 2008 Report,” more likely to face a tort case than those in 41 other states. Some of the major reasons authors Lawrence J. McQuillan and Hovannes Abramyan, experts on political economy, say this is so are the absence of caps on non-economic damages and contingency fees. They also point to low standards for establishing negligence as well as the commonwealth’s practice of electing judges rather than appointing them, among many other factors.

According to Dr. McQuillan and Mr. Abramyan, the economic costs of Pennsylvania’s legal atmosphere are likewise great. Monetary losses incurred in Pennsylvania were greater in 2006 than in all but six other states and monetary losses per capita were greater than in all but 12. $7,567,883,530 was spent in jury awards, settlements, attorneys’ fees (for defendants and plaintiffs) and insurers’ expenses in the Keystone State alone.

But, write the authors, the costs of copious tort claims extend far beyond any quantifiable figure.

“A poor tort system… imposes excessive costs on society, not the least of which is foregone production of goods and services,” they assert. “There is growing evidence that U.S. tort costs are far greater than other countries’ costs and that much of the difference is due to excessive litigation and lawsuit abuse. All of us shoulder the burden of an excessively expensive and inefficient tort liability system through higher prices, lower wages, decreased returns on investments in capital and land, restricted access to health care and less innovation.”

Depressed access to health care as a result of litigation has been a heated topic in Pennsylvania of late considering the assertion by Gov. Ed Rendell (D) that the state’s medical malpractice crisis is “over”. His administration points to figures showing that the number of doctors in Pennsylvania has hovered around 36,000 for years, which he believes suggests that physicians are not fleeing the state due to fear of lawsuits.

Dr. McQuillan cautioned that the number of doctors is expected to rise with population growth. “Even if the number of doctors held steady, the number of doctors per capita has fallen,” he said. He furthermore pointed out that the governor’s figure does not take into account physicians opting to stay out of high-risk medical fields.

One measure the commonwealth has taken to reduce the costs of medical tort liability has been assisting doctors with the purchase of medical malpractice insurance. But Dr. McQuillan characterized that as passing the cost of a tort crisis on to the taxpayers.

“It’s basically a band-aid to cover the symptom,” he said. “What you’re doing is basically socializing the loss.”

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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