Trial Lawyers, Inc.
update:
Michigan on Trial
Litigation Industry Looks
to Recapture the Great Lakes State
(Press Release Courtesy
The Manhattan
Institute)
New York June 17, 2008 -- New
York, NY: Today, the Manhattan Institute’s Center
for Legal Policy released Trial Lawyers, Inc.
Update: Michigan on Trial, a report highlighting the
severe threat posed by the Michigan trial bar, as
they attempt to unravel years of successful reforms
aimed at keeping businesses and doctors in the Great
Lakes State. Following up on the success of previous
Trial Lawyers, Inc. publications, this brief report
exposes the efforts of the Michigan branch of
America’s rapacious litigation industry.
In the mid-1980s, Michigan was a
state in legal crisis, leading the state Senate to
declare in 1985: “Liability has reached epidemic
proportions and presents an emergency situation to
the Legislature.” Trial lawyers’ control over
Michigan’s legal system had led to:
-
1,100% increase in malpractice
filings from 1970 to 1984 in the large metro
counties of Wayne, Oakland, and Macomb
-
Doubling of medical-malpractice
insurance costs from 1980 to 1985 – with even
higher increases in the riskiest specialties
-
42% of family physicians
reporting that they had ceased delivering babies
or reduced the number they delivered, and even
more had cut back on surgery and treating
patients likely to require intensive care.
The Michigan Legislature responded
admirably and effectively by instituting reforms
throughout the 1990s that targeted medical
malpractice, product liability, and tort law
generally. Michigan quickly saw dramatic results:
-
Filings of tort lawsuits fell
over 50 percent in the year after the 1995
product liability reform and they have continued
to decline since.
-
Tort actions in Michigan had
dropped to a third of their 1996 level, by 2005.
-
Cases proceeding to trial
declined by more than 20%, within five years
after the reforms, in big counties like Wayne
and Oakland.
-
Medical-malpractice insurance
rates in Michigan remained stable, while they
soared nationwide.
-
Michigan’s largest
medical-malpractice insurer of physicians cut
its rates in 2008 by an average of 6.5%
statewide, even for the most vulnerable
specialists: by 12% for neurosurgeons, by 14%
for obstetricians, and by 25% for orthopedic
surgeons.
-
The reforms helped to attract new
businesses and allowed Michigan to diversify
away from its traditional manufacturing base.
From 1999 through 2002, more biotechnology
companies were started in Michigan than in any
other state
But the trial lawyers have not given
up their self-interested fight:
-
Trial lawyers sought to get tort
reforms overturned but were rebuffed by the
state Court of Appeals in 1996 and the state
Supreme Court in 1999 and again in 2004.
-
Trial bar worked diligently – but
unsuccessfully – to elect favored candidates to
the bench by raising hundreds of thousands of
dollars for candidates who would work in their
financial interests
-
Having failed in the courts, the
litigation industry is now working to repeal the
state’s FDA-defense law and, more recently, have
been trying to expand the scope of the state’s
consumer protection laws, with the intent of
permitting plaintiffs to win damages without
meeting the basic requirements of tort law –
such as the occurrence of an actual injury.
So where Should Michigan Go from
Here?
Michigan’s dismal economy enhances
its need for legal reform. A 6.9% unemployment rate,
well above the national average, retail sales growth
substantially trailing inflation, and an annualized
first quarter growth rate of just 0.9 percent render
the state’s legal climate remains one of its few
competitive advantages – particularly given its
relatively high tax rates.
If the legislature reverses course on
tort reform, or the trial lawyers seize control of
the state Supreme Court, the consequences for
Michigan’s already ailing economy—and the residents
who depend on it—would be severe.
For a copy of the report please
visit:
www.TrialLawyersInc.com. To speak
with James Copland, the author of the report and the
director of the Manhattan Institute’s Center for
Legal Policy, contact Samara Klar at 646-839-3313 or
sklar@manhattan-institute.org
##
The Manhattan Institute, a 501
(c)(3), is a think tank whose mission is to develop
and
disseminate new ideas that foster greater economic
choice and individual responsibility.
