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Dec. 15, 2004

Bush Economic Forum on U.S. Legal System Is a Rehash of Lies and Distortions From Election Campaign

Nonpartisan, Independent Data Show That Businesses File Four Times as Many Lawsuits as Consumers, There Is No “Tort Tax” and Lawsuit Filings Are Down

WASHINGTON, D.C. – Contrary to what President Bush is likely to hear at a conference today, there is no credible economic rationale – conservative or otherwise – for taking away the legal rights of consumers and patients who are harmed by the abuses of big corporations and the negligence of medical providers, according to two analyses released today by Public Citizen.

The analyses cut through the economic fallacies and rhetoric of those who are trying to undermine consumers’ legal rights. They are available by clicking here and here.

The consumer advocacy group released the analyses as Bush prepared to participate in a panel on Wednesday called the “High Costs of Lawsuit Abuse,” part of a two-day White House Conference on the Economy. Like the rest of the conference, this panel is designed to showcase the president’s agenda and exclude any analysis or nonpartisan, independent facts that challenge his legislative goals. The term “lawsuit abuse” in the title is evidence of this panel’s bias; it was invented by the business lobby.

A serious discussion of the U.S. legal system would include the following facts from Public Citizen’s analyses:

  • The people who most take advantage of the legal system are the business interests lobbying to curtail citizen’s legal rights: U.S. businesses file lawsuits four times more often than individuals, according to an analysis of states and counties that keep such data. Moreover, businesses are 69 percent more likely to be sanctioned by federal judges for filing frivolous lawsuits than are tort plaintiffs and their attorneys, according to an analysis of the 100 most recent cases where such sanctions were imposed.
  • The frequently cited study that contends lawsuits cost taxpayers well over $200 billion per year (the so-called “tort tax”) has been repudiated by the nonpartisan Congressional Budget Office (CBO). According to CBO, the costs estimated by Tillinghast-Towers Perrin “merely shift money from injurers to victims and thus are not true costs to society.” These “costs” are actually the total cost of the liability insurance industry, and they would not disappear even if the legal system did not exist. Overall, 46 percent of the tort cost estimate is for payments made to injured victims for lost wages, medical care, and pain and suffering. These costs are the result of injuries caused by defendants and would be borne by society anyway, through private health insurance, government programs and charities, or by being absorbed by victims and their families. And 21 percent of the tort cost estimate is for insurance industry overhead.
  • Tort lawsuit filings have decreased 9 percent overall from 1992 through 2001, according to a joint tracking project of the Conference of State Court Administrators, the Bureau of Justice Statistics and NationalCenter for State Courts. The filing data from 30 states represent a total of 74 percent of the U.S. population. When adjusted for population growth, tort filings declined by 15 percent, from 269 to 228 per 100,000 over that period.
  • According to independent researchers, the doctor population in states with increasing malpractice insurance premiums is rising – not declining. Further, medical malpractice costs are a very small fraction of overall health care costs and have virtually no effect on the rising costs of health care, and the administration’s claims of $25 billion in “defensive medicine” costs per year have no basis in fact.

“President Bush doesn’t let facts get in the way when it comes to his political goal of dismantling the legal system,” said Joan Claybrook, president of Public Citizen. “He prefers to coddle campaign contributors, rather than protect consumers and patients.”

Added Frank Clemente, director of Public Citizen’s Congress Watch, “This is not a debate among reasonable people.   It is a massive campaign of distortions carried out by the administration in league with its business allies. The fact is, the emperor has no clothes.”

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