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Tort Reform
Old 02-10-2014, 10:14 AM   #1
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Tort Reform

Many of you may remember that McDonald's lawsuit from the 90's of the lady who sued because she spilled hot coffee on herself. I remember the Jerry Sienfeld episode with Kramer in the theater. Good laughs.

Well I was researching USAA insurance at Top 283 Complaints and Reviews about USAA Auto Insurance and one of the posts recommended the HBO documentary Hot Coffee. I found it very interesting how our right to litigate harmful wrong-doing in the civil courts is quickly being taken away be corporate interests.

If you haven't seen the movie, I highly recommend it. You can find in on Netflix streaming or on youtube.

And as a side note, much to my surprise, the reviews of USAA were not very good at all. Seems that nowadays, as a result of tort reform and arbitration clauses, the insurance companies have no problem denying claims as they don't fear going to court. Sad state of affairs if you ask me.
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Old 02-10-2014, 11:10 AM   #2
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And as a side note, much to my surprise, the reviews of USAA were not very good at all.
I don't think it's surprising. It's sample selection bias--people who take the time to seek out a site in order to leave a "complaint or review" are going to overwhelmingly be dissatisfied. The only way to avoid this (to some degree) is to look at surveys where people are actually polled (Consumer Reports, etc--USAA always comes out at or near the top). Even in these cases, people with the strongest opinions are likely to be the ones who take the time to answer, and dissatisfied customers are far more likely to have strong opinions.

Tort Reform: We need it.
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Old 02-10-2014, 11:17 AM   #3
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Tort Reform: We need it.
I wish the class action epidemic would end. I've been a member of several classes "wronged" by a company. When it's all said and done, the lawyers get about half of the money and the individuals involved get pennies. The cases I've been part of are real stretches. I think the company agrees to a settlement to limit their legal bills and the class action attorneys get rich..
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Old 02-10-2014, 11:25 AM   #4
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I wish the class action epidemic would end. I've been a member of several classes "wronged" by a company. When it's all said and done, the lawyers get about half of the money and the individuals involved get pennies. The cases I've been part of are real stretches. I think the company agrees to a settlement to limit their legal bills and the class action attorneys get rich..
"Loser pays", as it exists in many other countries, would go a long way toward eliminating the most frivolous suits. There need to be protections (e.g. so that a big defendant can't artificially load up the costs beyond reason to dissuade justified lawsuits, etc) , but it has worked elsewhere.
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Old 02-10-2014, 12:22 PM   #5
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I don't think it's surprising. It's sample selection bias--people who take the time to seek out a site in order to leave a "complaint or review" are going to overwhelmingly be dissatisfied.
This. Very much this. I've worked in the customer service industries enough to know that studies have consistently shown that dissatisfied customers are about 10-20 times more likely to "broadcast" their bad experiences than they are to praise an unusually superb experience. As a result it stands to reason that you are likely to see far more negative reviews than positive reviews almost everywhere... especially where you have to enter a few paragraphs about your experience. Very satisfied customers may give 4/5 or 5/5 on their experience but will rarely take several minutes to compose a long note about why their experience totally rocked.

That all said, to the core topic..... IMO tort reform should never include capping *actual* damages (property loss, loss of income, medical expenses caused by others), but there may be a place for capping "punitive" damages or pain and suffering. Those are harder to put a fair "dollar amount" on anyway.
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Old 02-10-2014, 01:00 PM   #6
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Read the most of "reviews" of USAA auto insurance on OP's linked site & many left me scratching my head as nonsensical. Like folks slamming USAA for following a state's no-fault auto insurance law Agree 100% with samclem that actual consumer surveys are much more objective (though not perfect).

Also agree that tort reform is sorely needed in US. Current system mainly rewards a few lucky lawyers in a 'courtroom lottery' with little regard to real justice.
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Old 02-10-2014, 01:36 PM   #7
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I wish the class action epidemic would end. I've been a member of several classes "wronged" by a company. When it's all said and done, the lawyers get about half of the money and the individuals involved get pennies. The cases I've been part of are real stretches. I think the company agrees to a settlement to limit their legal bills and the class action attorneys get rich..
Several class action suits I have been eligible for haven't even resulted in pennies. All I got was some coupons for products I no longer used.
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Old 02-10-2014, 01:45 PM   #8
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I saw Hot Coffee. I agree, it was an interesting documentary.

As a Californian I chuckle when I hear one group complain about the very high malpractice insurance rates that CA doctors pay. And hear another group complain that malpractice suits are almost not worth it in CA because of the 1975 Medical malpractice law that limits non-medical claims to $250k.

Sounds like insurance companies are the winners, since they've figured out a way to increase the insurance rates, even though damages have been frozen at $250k for almost 40 years.

Medical Injury Compensation Reform Act - Wikipedia, the free encyclopedia
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Old 02-10-2014, 03:39 PM   #9
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Sounds like insurance companies are the winners, since they've figured out a way to increase the insurance rates, even though damages have been frozen at $250k for almost 40 years...
That's only NON-economic damages. Awards for economic damage (e.g. medical care, LTC costs, lost wages, etc.) are not capped, and have continued to escalate over that time
One such award in CA topped $74 MILLION for a single birth injury case. Not sure how actual damages calculated out to >$1M annually.
Parents awarded $74 million in malpractice lawsuit against doctor | Local News | SanLuisObispo.com
And another for $22 million to a 43yo woman-
Menlo Park woman wins $22M malpractice verdict against PA Medical Foundation | News | Almanac Online |

A web search on California malpractice awards shows many other multi-million awards. I'm NOT saying no malpractice occurred in these cases, just that awards MUCH larger than $250k are happening & insurance companies must maintain reserves to cover these (and future) awards.

BTW- There is apparently an initiative making its way to the Nov ballot to increase California's cap on non-economic damages to $1.1 million.
2013 Initiative Analysis: The Troy and Alana Pack Patient Safety Act of 2014
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Old 02-10-2014, 04:14 PM   #10
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I was included in a class-action suit against a certain video rental outfit. When it was all over the lawyers got tens of millions of dollars. I got a coupon for a discount on my next rental.

That said, I have seen enough abuse and hornswoggling
by big corporations to know that we need some legal avenue.
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Old 02-10-2014, 06:41 PM   #11
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Agree class action actions are important counterbalance to unbridled corporate power, but some sure seem like little more than enrichment of some lawyers. There was a huge CA against Apple some yrs ago over screen measuring slightly smaller than advertised. IIRC, I got ~$5. It is my understanding the attorneys made a bit more
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Old 02-11-2014, 07:35 AM   #12
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I sat jury duty around the time of the McDonald verdict ... the judge came out to thank us for our "civic duty" then he commented on the McDonald verdict. He said the reason for the large monetary award was because the company IGNORED countless prior injuries (as demonstrated by the defense). It took the punishing award to get the company the change its process.

That said ... we need tort reform! Spoke to the fellow landlord who had just "won" a discrimination suit. A minority woman was applying to dozens of apartments (he was number 14) then sued for discrimination when denied. She would then settle the case during arbitration for a few hundred dollars or maybe a grand all while using tax payer funded lawyers . Ironically he OFFERED HER THE UNIT ... hence his willingness to fight it. Took a couple years, but he WON ... or did he (his legal fees were 4k and his lawyer refused to counter sue for his fees). Yeah it was frivolous ...
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Old 02-11-2014, 07:52 AM   #13
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I sat jury duty around the time of the McDonald verdict ... the judge came out to thank us for our "civic duty" then he commented on the McDonald verdict. He said the reason for the large monetary award was because the company IGNORED countless prior injuries (as demonstrated by the defense). It took the punishing award to get the company the change its process.
I read an article about this years ago. This was an old lady who did nothing wrong. IIRC, she was a passenger and the driver accidentally spilled the coffee or something. But what really did it for the jury (and me too) were the photos of the massive burns all over the lady's crotch. This wasn't hot coffee, it was scalding. And the award was not multi bazillions, it was much more reasonable than reported (I think the actual award was modest but the jury stated they would give her millions more if they could). And, as Tryan states, it had happened before again and again. McD's didn't give a sh**, they just wanted to accommodate the folks who like to carry their coffee back to the office and still have it hot. Get a microwave.

Yeah, tort reform may be needed to some limited degree but the reports of abuse are over stated and the estimated savings from reform are relatively trivial.
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Old 02-11-2014, 11:39 AM   #14
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Hot coffee notwithstanding, lawsuits are about the only way society can get justice from fraud.
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Old 02-11-2014, 06:08 PM   #15
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Hot coffee notwithstanding, lawsuits are about the only way society can get justice from fraud.
I too have mixed thoughts on class action suits, but I also remember the Ford Pinto fires.
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Old 02-11-2014, 06:50 PM   #16
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How about the Corvair. Not sure Class Acton suits figured into that but Ralph Nader got famous with his book about how the company knew the car was going to kill a certain number of people but thought it was too expensive to retool it and make it safe. So, they built into the price of each car the $250,000.00 (huge amount of bread in those days) they would throw at anybody who sued them because the car was directly responsible for a family member's death.

I am sorry to say that market mechanisms just can't car this kind of load. The farther away the results of one's behavior are from his weekly income the less power market mechanisms exert. Smith's baker, butcher, and brewer model were all Mom & Pop Shoppes not corporations or even sole proprietorships of great wealth.

Just making a lot of money immunizes one from the marketplace's authority. Citizen Kane. Mr Kane we lost a million dollars last year. I know, and we will lose a million again this year and next yr. And if this keeps up I'll go broke..... in 65 more years.
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