Do law suits hurt the economy?

Do all of these frivolous law suits being filed and that have been filed in the past 10 years drain the economy, or hurt it? (i.e. McDonald’s coffee suit, Eenie Meenie Minie Mo suit, etc.) Anyone have any cites with which to refer me?

I mean, certainly those that win might not get all of there money, but what happens? Like, say I sue a rich guy in my town for $5 million and win, but he declares bankruptcy (sp?) so he doesn’t have to pay me…do I get my money from somewhere?

IANAE. I suppose this is debatable. Economic theory says that trade is good, even though trade per se doesn’t create anything. That’s because you exchange something for something else, and both parties end up with something that was more valuable to them than the thing they started with. With lawsuits, lawyers are just moving money around, mostly into their own pockets. It doesn’t create wealth, it just redistributes it. I don’t know if wealth redistribution is good or bad for the economy.

Sometimes, it’s pretty hard to get paid after a lawsuit.

If the guy declares bankruptcy, the court would decide which debts he would still be responsible for. IIRC, if they decided that you were one of the ones which were “forgiven” then you would either recieve a tiny portion of your settlement, or nothing at all.

You only recieve money from the defendant. If he can’t, or refuses to pay, there’s no outside party which pays the money you’re owed.

If the judgement is appealed, you could spend years in court, paying out of your own pocket for your attorney(s) until the case is finally settled.

I can be difficult to get people to pay up, even for small amounts, let alone millions of dollars. My grandmother, who is a landlord, has sued tenants who trashed the property in the past, and often, it’s better just to cut your losses rather than fight to get the money. If the defendent doesn’t pay, you have to take them back to court, sometimes over and over, and sometimes you STILL never see a dime.

In general the costs of lawsuits will be supported by consumers. Part of the price of everything you buy could be applied to the cost the company incurs from litigation (or just having attorneys on staff/retained to avoid litigation). As such lawsuits raise the price of everything you buy.

The flip side is that sometimes companies will not make a change unless they are sued. There have been cases where auto manufacturers (as an example) found it cheaper to settle cases than to actually fix a larger problem. There have been cases that busted companies for such behavior and the end result was an ultimately safer product for consumers. Not only does the company that gets busted have to straighten up its act but usually so do its competitors in the same industry.

Also, from experience of going round on this subject on these boards before, you will probably get reamed by the resident attorneys suggesting that frivilous lawsuits are rare and already punishable under law. Rather than give you cites they will demand them from you showing there is actually a problem. I’ve tried but most stats you can manage to dig up they will point out has an agenda against lawsuits (i.e. the insurance industry). While that is a fair complaint it makes useful stats very hard to come across.

Good luck!

Frivolous lawsuits are a byproduct of a system designed for legitimate lawsuits, which are the majority. The system exists to redress the harm caused by tortious behavior; when a vendor or contractor accepts money for a job he did not do completely or correctly, that causes economic damage to the customer and to the reputation of all vendors and contractors. The fact that some honest people are pursued along with the dishonest is unfortunate, but not nearly as ruinous as a market with no justice at all.

And the McDonland’s hot coffee lawsuit was not frivolous. The coffee was extremely dangerously hot, the McD’s had been warned about it, and they chose to ignore the danger. Just correcting a common misconception.

http://lawandhelp.com/q298-2.htm
http://www.vanfirm.com/mcdonalds-coffee-lawsuit.htm

Lets be absolutely clear here: Frivolous, according to an online legal dictionary, means “lacking in any arguable basis or merit in either law or fact.”

It is only if the system totally and completely falls apart that a frivolous lawsuit will ever win any money whatsoever. I, for one, do not believe the civil justice system breaks down all that frequently. I would like a single case cited to me that shows that a case that lacks “any arguable basis or merit in either law or fact” won any money.

So, the cost of frivolous lawsuits are, with few or no exceptions, is the cost of litigation. Some lawsuits take years and hundreds of thousands of dollars. Others take weeks and are dismissed after just a few thousand dollars.

So, does this cost negatively influence the economy? Probably a bit, but no more than other inefficiencies. Without having any facts whatsover, if I were to ballpark it, my guess is that the costs of most frivolous lawsuits is less than the yearly salary of most CEOs.

How about this one…

How about breast implant litigation? Over and over there was no scientific evidence supporting claims made by women who claimed injury from breast implants. Nevertheless considerable damage awards were won. Further, the litigation lost numerous times but an attorney continued to plug away. Eventually a case was won which opened the floodgates. For a good and fascinating read on this check out Frontline: Breast Implants on Trial .

I have been through the ringer on this over in GD. Various posters, many of whom are attorneys themselves and as such may have their own agenda to protect, continually battered at the notion that there is any problem here. Nevertheless the United States has a reputation for being a litigious society. Even if cases are thrown out that deserve to be there is a real fear of being sued in this country and that comes with its own costs…real and subjective.

I have also been in a debate here long ago about the McDonald’s coffee deal and I still believe it was ridiculous. IIRC the plaintiff’s winnings were substantially reduced upon appeal though so the ‘insane’ award ultimately wasn’t too ridiculous.

I suppose it, too. We’ll leave it here for a while to see if folks have peer-reviewed studies (HINT: Data is not the plural of anecdote!), but I’m guessing this will end up in GD before long.

Resident attorney here. A frivolous lawsuit is subject to sanction in every American jurisdiction. For example, Federal Rule of Civil Procedure 11 provides:

Every jurisdiction follows the same rule or some analog. Likewise:

28 U.S.C. § 1927. Again, practically every state has enacted a similar provision, either by court rule or by statute.

The courts and the practicing bar take these provisions very seriously.

“lacking in any arguable basis or merit in either law or fact” is not synonymous with “an argument that can convince Whack-a-Mole

I never suggested the courts always get it right. It is my understanding that the breast implant cases got it wrong, however I have never really done any reasearch. When I went to that web page you linked to, I find “arguable basis”

And, whether you agree with the McDonalds verdict, you must agree that there exists a rational argument that super-heated coffee is unreasonably harmful.

A frivolous lawsuit is not one where reasonable minds can differ. A frivolous lawsuit is one where the court imposes sanctions on the attorney for wasting everyone’s time.

Convenient…in your world that is no such thing as a ‘frivolous lawsuit’ that got by. It would seem that by your definition a frivilous lawsuit is one the court catches and punishes. If the court does not do that then it MUST follow that the case has merit.

Fine, technically that may actually be correct. I can personally still disagree with some cases that slip through and be of the opinion the justice was NOT done.

I STILL think the McDonalds coffee case was ridiculous. Unreasonably hot? While growing up my mom boiled water to make coffee… BOILED it. I would expect coffee to be very hot and would not consider suing someone if I spilled it on myself. If the McDonalds manager tossed the coffee on me that is another matter. I worked as a waiter in a Mexican restaurant. I served fajitas that came out on an iron skillet that was exceedingly hot…more than 212[sup]o[/sup]F that is the absolute maximum coffee can manage. I guess we should have served them luke warm to avoid injury.

Also, you did not respond to the $25 million that guy got for no apparent injury that I quoted. Any opinions on that?

Want another one? How about tobacco litigation? Are tobacco companies good guys? Almost certainly not. How many smokers have recovered damages? Not many but the fie who have have hit paydirt. Did States have standing as injured parties? I guess since they were allowed to sue and won their cases yes but I find that dubious in the extreme. States don’t lose money to smokers. They spend more in healthcare for them but smokers die at an earlier age so are less a burden to the state among the elderly population and States tax cigarettes like crazy.

The real winners in these cases? Attorneys. In Illinois alone the attorneys claim they were due $800 million! ( Cite ). I realize attorneys take risk upon themselves and may lose a case thus costing them millions but just one $800 million payday is enough for a liftime of lost lawsuits and seems a bit extreme to me.

That opinion doesn’t belong in a thread devoted to frivolous lawsuits.

This site: http://www.verdictsearch.com/news/specials/0204verdicts_johnson.jsp says that “each was exposed to asbestos and subsequently diagnosed with asbestos-related lung disease, according to plaintiffs’ attorney Isaac K. Byrd Jr. Although none has developed asbestosis or mesothelioma, ‘our pulmonologists testified they were all at risk for developing lung cancer and mesothelioma,’ he said.”

All rants aside, the original question is “how do frivolous lawsuits affect the economy.” I was unable to find statistics on how many sanctions were assessed against attorneys for filing frivolous lawsuits. Once you get percentage of lawsuits that found lawsuits frivolous, you might be able to extrapolate to the larger body of cases that settle before such motions are even heard. As I mentioned before, I suspect the total numbers are not very high.

If you want to change the question to “What is the economic value of lawsuits that Whack-a-Mole disapproves of?” well, that deserves its own thread.

Since this is still in GQ, I’ll try to give a factual answer, although it seems likely this thread will get moved.

Full disclosure: I’m an attorney.

It seems to me that lawsuits are great for the economy.

Why? Because they are an essential part of Rule of Law. Without Rule of Law, our economy would collapse.

An example: Any modern industrial product or service is the result of the labor of thousands and thousands of people. For example, the computer in front of you required collaboration on the part of the guy who mines metal, the banker who finances the chip plant, the guy who sweeps the floor of the computer store, etc.

Now, many of these people are in a position to take advantage of others of these people. For example, what if the chip manufacturer decides to dishonor its loan? Rule of Law helps prevent such things by giving people a mechanism to hold other people accountable and giving them a forum to voice their disputes. Without Rule of Law, the collaboration necessary for a modern industrial economy would be much more difficult, if not impossible.

Of course, lawsuits are an important aspect of Rule of Law. Although they are expensive and divert resources that could otherwise be used to generate wealth, the reality is that without such a mechanism to resolve disputes, we’d all be a lot poorer.

So yeah, I’d say that lawsuits are great for the economy. And I would also point out that there are areas of the world that have don’t have very many lawyers or lawsuits. Those areas are not infrequently among the poorest.

Well, I happen to believe that many lawsuits are not only wrong, they have a positively harmful effect upon the economy. For example, take vaccinces. These are medicines that greatly improve human life, by preventing disease. yet, for all of medical science, there are still 1-2 bad reactions (permillion doses) , sometimes the reaction can cause death. So, what sense does SUING the vaccine mfg. make? Yet, the US govt. has to offer the vaccine makers immunity from lawsuit, if they are to make the MILLIONS of smallpox vaccine doses which will immunize the US population.
In this case, the threat of a lawsuit is tending to reduce the availability of a postive good (the vaccine).
I also don’t understand the idea of unlimited punitive damages…how you can give a jury unlimited powerto award huge sums of money (upon their whims) is beyond me.

We are getting way off topic here, but lawsuits generally won’t win if the only argument is that the product can be dangerous. Most products are dangerous. The question is are they unreasonably dangerous?

Whether something is unreasonably dangerous depends on various factors such as whether warnings were present, whether alternatives were available at the time of production that were both safer and reasonable to implement.

Basically, the smallpox manufacturers did not need to be worried if (1) they are not aware of any safety measures that would make the vaccine less dangerous, or (2) they provide sufficient warnings to doctors and patients.

Unless the manufacturer has some sort of sordid past (they have actively hidden evidence that their vaccine gives people cancer) I really don’t see them as being at risk. The only reason both the tobacco and asbestos companies have been the subject of lawsuits is because they failed the warning test. They both knew of the dangers of their products and decided to actively hide them from the public. Even the McDonalds case hinged on lack of warning (go into any Chevy’s restaurant, and they will always say “careful, that’s a hot plate” but you are lucky to get a monosyllabic grunt from the guy at the McDonald’s drive-thru)

Imagine the following scenario: Husband is told that he is not in any heightened risk category for getting vaccine. Husband gets vaccine. Wife, however, is in heightened risk categories. Wife becomes seriously ill/dies.

Now, I don’t know about you, but I won’t loose any sleep if the manufacturer is sued because they neglected to mention to the husband that he should not come into contact with anyone in the heightened risk categories because of the contagious nature of the vaccine.

Personally, I would have much preferred lawmakers to get some balls and, instead of giving the vaccine makers a totally free pass, to have just re-stated the current law (“Smallpox vaccine producers are immune from any lawsuit as long as they provide adequate warnings and are not aware of less-dangerous alternative methods of vaccinating against smallpox, as long as those alternative mehtods are reasonable to implement.”)

As is my meager understanding, lawsuits that are “frivilous” never make it past pretrial.

I would assume that also helps to stem any (if at all) ‘damage’ that a lawsuit could cause.

Are some lawsuits unjust? Yes. (this is what appeals are for)

lawyers make LOTS of money over seemingly silly things, but they do so at their own risks. If a lawyer prosecutes too many ‘frivilous’ lawsuits they can be disbarred.

For the most part our legal system is in place to help our citizens and protect the intrest of human rights. From that understanding, would devising a system that harmed the overall populus economically not inheritly undermine the entire basis of the system?

To answer the OP’s question; lawsuits ‘should’ not hurt the economy if done in the name of justice.

-x out