So many public institutions and businesses in the US base much of their internal policies and procedures on limiting their liability in how they operate day to day so they don’t get sued.
When you see a no-brainer, obvious disclaimer on a product packaging or advertisement and think to yourself *why does that need to be explicitly stated?* and the answer seems to always be “so some idiot doesn’t sue them.”
Even myself as an individual need to carry hundreds of thousands of dollars of personal liability insurance on my homeowners policy in case somebody sues me.
When people who feel that they’ve been wronged by an employer, or their kid’s school, or by another individual the advice they get online is always “get a lawyer” but how can most people afford to do that?
I know that attorneys can take money from a settlement after it’s been won, but that takes months or even years in court and with the average fee of well over $150.00 per hour for even a consultation with an attorney, how do normal people afford to sue anyone?
I am well aware that individuals seeking damages from big corporations for blatant negligence is one of the quickest ways for health and safety regulations to be reformed, like that poor woman who was burned because McDonald’s was keeping their coffee at near boiling temperatures, I’m not questioning if these lawsuits are legitimate, I’m questioning how they’re even possible?
In: Economics
Mostly because insurance companies spent a LOT of money on propaganda to convince people that litigation is bad for the sole purpose of making it easy to screw policyholders and lowball victims in the name of profit.
It’s been very effective.
US civil lawsuits still regularly use juries (unlike almost the entire rest of the world). This makes litigation particularly time-consuming, expensive, and unpredictable. And that encourages settlements. You might have a weak case, but the cost of the other party defending it (and the risk they will lose, even if the law is on their side) makes it worth it for them to settle and pay you out something just in case. If it will cost them $500,000 to defend a lawsuit, and they risk having to pay out $5m if they lose, it makes sense for them to hand over $50,000 to settle (of which your lawyers will get a decent chunk).
For the plaintiff lawyers, provided they can make enough from the cases they “win” to cover the cases they “lose,” they can make a living. And provided they have enough cases going on at once they can afford to wait a few years for the payout.
The other big thing the US has is particularly high damages. In traditional common law legal systems damages are based on “actual loss” – so if someone wrongs you, and you sue them, you only get paid what loss they actually caused you. And often that makes it not worth it to sue. But the US tends to throw in punitive damages as well, whereby a jury (see about about unpredictability) can decide to throw in a large amount of punitive damages as well, because they feel like it.
To take the McDonald’s lawsuit, *Liebeck v McDonald’s*, the jury awarded Liebeck $160,000 in compensatory damages (to cover the actual physical damage they did to her – which was extreme), and another $2.7m in punitive damages (around $5.6m today) – two days of coffee sales – to punish them for their wrongdoing (they knew they were selling their coffee at dangerously unsafe temperatures, and had had problems with this before). The judge reduced the punitive damages, making the total $640,000 (many American legal systems have caps on punitive damages *because* juries can go a bit crazy), and then McDonald’s settled the case for some unspecified amount.
Part of why litigation is so popular *and necessary* is also due to the cost of things, particularly injuries, given how expensive US healthcare is. Liebeck originally wanted to settle with McDonald’s for $20,000, of which around $13,000 were her medical expenses (in 1992). In a place where a single medical emergency is enough to bankrupt someone, it can be necessary to try to recover your medical costs from anyone possible. Whereas in countries where healthcare is much cheaper (or even free at the point of use), there is less of a need to sue, and damages are going to be much lower naturally.
It also ties into American attitudes around individualism, entitlement and natural justice; a sense of “this person harmed me in some way so I must get compensated for this.”
The US is litigious because suing for medicle expenses is Not critical part of our Healthcare system.
Lawyers are expencive, hospitals are more expensive.
The US does have one of the highest lawyers per capita in the world. The exact numbers vary slightly depending on source, but it’s solidly in the top 10. https://worldpopulationreview.com/country-rankings/lawyers-per-capita-by-country
When the laws are easily exploited and certain types of cases have a high probability of success lawyers or firms seek out clients to essentially get them to sue someone. If they get a payout, the lawyer keeps a hefty chunk of it. To entice clients they may have low prices or even work the case for free because their pay will come from the settlement. Ever seen these ads calling people to participate in class action lawsuits or urging them to sue their employers? That’s it
You don’t need an attorney in order to sue someone. The vast majority of civil suits don’t involve an attorney at all.
Not sure if someone else touched on it. But many companies have insurance for their line of business.
Personal injury lawyers know if there is enough meat to the case, and the combination of meat and knowing there’s a solid financial backing (insurance company) makes it a worthy chase to go after and almost be guaranteed settlements.
Poor people were never expected to succeed at using the “Justice” system.
It’s there for the Rich to ensure compliance from the Not Rich now that whipping is out of fashion.
Even when “A Poor” does get a payout, the Lawyers get a fat piece and the Taxman claws back a chunk as well.
Bit like giving the Orcas the Whales tongue after they help the Whalers kill them.
Lawyers get some 40% on a contingency basis.
And it doesn’t have to come from the deadbeat that caused the injury, they can also sue the local government for the conditions of the street, or the maker of the product,owner of the location. If the judge or jury finds that any of these are a mere 1% responsibility they could be liable for the entire amount…aka deep pockets.
Now that said. Just because you win doesn’t mean you get. They can appeal and drag it out for years. If they know you are in dire situation because you can’t work they know you might settle for less just to keep from being homeless.
Most lawsuits aren’t brought by an individual, even those that are called David Jones vs. Holly Peterson or whatever.
When you see “burglar sues homeowner for being bitten by dog during burglary” it’s not the burglar suing, it’s his insurance company suing the homeowners’ various insurance providers. They get to file it under the insured’s name. All the various insurance companies want somebody else to pay part of the medical bill.
Little Mary falls off a swing at a park and breaks an arm, it’s her insurance company suing the city.
Anybody gets injured, just about every insurance provider will want to pass at least part of the cost off to some other provider. You get killed in a car accident, your life insurance will pay up. But they’re going to sue the other driver and his auto insurance provider, and his umbrella provider, and maybe his employer if he was driving to or from work, and the city where it happened. Their expectation is that those other carriers will settle for say $60,000 to make it go away, because that’s cheaper than fighting it in the courts.
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