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New Anti-Tort Study Relies on Discredited Data and Junk Economics, Ignores Core Function of Legal System

April 26, 2007

New Anti-Tort Study Relies on Discredited Data and Junk Economics, Ignores Core Function of Legal System

Public Citizen Exposes Ideological Report’s Serious Flaws

WASHINGTON, D.C. – A study released last month attacking the nation’s tort laws is not scholarly research but another public relations advance by corporate-funded “think tanks” in the ongoing campaign to gut our civil justice system and reduce corporate accountability, according to analysis by Public Citizen.

In its March report, “Jackpot Justice: The True Cost of America’s Tort System,” the Pacific Research Institute (PRI) claimed that the legal system is too costly and proposed eliminating many of the legal protections that Americans currently enjoy to reduce these costs. But PRI’s report relied on widely discredited cost estimates from an insurance industry consultant, Tillinghast-Towers Perrin. These “costs” are entirely speculative and include many factors unrelated to litigation, such as administrative expenses for the highly bureaucratic insurance industry.

According to the Economic Policy Institute in 2005, “Any work that relies on [Tillinghast’s] seriously flawed reports is, to that extent, also unreliable.” PRI, undeterred, greatly increased the already-bloated numbers from Tillinghast and applied even more irrelevant factors to produce a flawed and ridiculous estimate. PRI’s calculations include formulaic cross-applications from unrelated studies of corporate taxes and double-counting. Even conservative jurist Richard Posner agrees that its assumptions and ultimate conclusions are baseless. PRI’s ultimate goal is ideological.

“The study employs junk economics that ignores an important purpose of the justice system – fairness,” said Joan Claybrook, president of Public Citizen. “The report’s theories would, if taken to their logical conclusion, eliminate government altogether.”

PRI’s report also includes the now-debunked Hilda Bankston story about a Mississippi pharmacy owner who was allegedly forced to sell her business after it was named as a defendant in a national class-action lawsuit against a major drug company in New Jersey. The story was shown in a recent book by reporter Stephanie Mencimer to be riddled with falsehoods.

“Thanks to our civil justice system, Americans are safer, healthier and enjoy a higher standard of living today than ever before,” said Laura MacCleery, director of Public Citizen’s Congress Watch division. “While emphasizing costs, PRI fails to adequately measure the benefits of litigation. The study parcels out a miserly benefits picture, ignoring clear benefits of our court system such as deterrence and punishment of negligent conduct, compensation for life-threatening injuries or death, safer and healthier industries and products, and a more sustainable and transparent economy.”  

Access to the courtroom and a jury is a cornerstone of American democracy. Americans know that if they are injured by negligence, there is a fair and impartial process to hold corporations and individuals accountable.

“The business lobby and far-right groups like PRI want to return to a system of robber baron justice,” said Claybrook. “Their attempts to dismantle the American legal system harm both individuals and the very fabric of our nation.”

To read Public Citizen’s analysis of the serious flaws in this study, click here.