Tuesday, May 1, 2018

My Reflection on David Engel’s 'The Myth of the Litigious Society'

By John Smith

I didn’t fully appreciate the important role culture plays in influencing people’s views about litigation until I read Engel’s book.  I was aware that negative perceptions were prevalent, but I still subscribed to the misconception that injury victims were rational actors—rational in the sense that victims would overwhelmingly pursue litigation when it would be to their benefit.  Engel’s book helped identify many of the assumptions upon which this misconception is built.  It also framed the cause in a way that makes intuitive sense—that the typical defendant either is or is not represented by a party that is more able to exert influence over the mechanisms that shape cultural views.

Regarding the victim’s tendency toward lumping, I found Chapter 3 (which details how people experience injuries) to be the most thought-provoking.  Engel identifies a few reasons why people do not progress through the injury decision tree as rational actors.  The principal reason is that pain clouds their ability to think clearly and in an abstract way about the problem.  This reason makes sense.  When a victim is experiencing pain, they just want it to go away; the same way the victim of libel or slander just wants their name cleared.  The victim who can identify their injurer may wish for compensation or corrective justice, but at the same time, they know no amount of money will ever make them whole.  I can understand the impulse of wanting to move on; it’s certainly the path that would seem to offer the least resistance (albeit under changed circumstances).  

I think the forces that pull in favor of lumping are greatly exacerbated by the precision our civil dispute resolution system requires.  Lawsuits in our system take time.  And it is generally true that the longer it takes for someone’s efforts to be rewarded the less likely they are to engage in those activities.  If measured in only this dimension, New Zealand’s social compensation scheme would appear to be superior to our system.  But I think socializing the problem moves us even further away from being inclined to have a fact-based conversation that produces the heightened sense that we must as a society somehow address the need to prevent injuries.  Under a socialist scheme, there is no incentive.   

I believe that the alternative, market-based approach is superior, despite Engel’s suggestion that it tends to work to the defendant’s benefit.  Engel suggests in Chapter 10 that the instilling of mostly negative and often unsympathetic views of injury victims and their lawyers is no accident [pg. 190].  This conclusion also makes intuitive sense.  Personal injury victims are often litigating against large corporations, or insurance companies, who themselves are large corporations.  It’s much easier for a few large players to exert influence in a way that shifts cultural views than it is for individual plaintiffs and small personal injury law firms.  

If I possessed a magic wand that would allow me to reform the U.S. tort system in a way I saw fit, I would use it to implement New Zealand’s social compensation scheme but only on an opt-in basis.  The universe of torts would be limited to those that are most commonly the cause of personal injury lawsuits.  People would be free to choose in advance (yearly, along with their health insurance elections) if they want to elect coverage under the social compensation scheme or the current system.  In the event of a qualifying injury, damages would then be pursued and awarded accordingly. 
This approach would be highly unfeasible in the United States.  Funding is one obvious problem.  Is the funding of the plan a private or public obligation?  If private, are the people capable of funding the plan the same ones who would be likely to opt-in?  But more to the heart of Engel’s book, it would not incentivize us to have the type of conversation he desires.  I’m not sure what would. 

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