Why claim when you can stay home and lump?

By Alice McDermott

The issue of tort reform has proven to be present in almost every tort we have encountered throughout our studies this year. However, maybe our focus has been misplaced, or that is what David M. Engel would have one contemplate after reading his book The Myth of the Litigious Society. Tort reformers wish to reign in what is often thought to be sleazy personal injury lawyers, outrageously unpredictable awards, overly sensitive plaintiffs and unfairly, as well as unequally, pursued and punished defendants. Engel argues that although these are real issues, they are more like the outliers in our civil litigation system and should not be viewed as the most compelling issue facing the U.S. tort system. Instead we should be worried about the number of victims who are not suing and are instead absorbing the costs, which are not just monetary, of their injuries.

An interesting point made by Engel came through his zoomed-out study of how the tort system is studied. In an early chapter, Engel examined the various diagrams used in studying tort victims. In law school we are often confronted with tidy, linear charts to better explain certain concepts or ideas. Engel criticized tort law being attempted to be condensed into a pyramid chart, pp. 33-34, arguing that the process after an injury for tort victims is anything but linear. Later, Engel returned to this idea that responses after an injury are more sporadic, multi-directional, and complex than our tidy way of thinking about what comes after an injury, pp. 72-73. Even if a victim comes to the conclusion that he’d like to claim, reality does not proceed in that tidy unilateral direction. Engel instead explains the “post-injury experience” of a victim with the idea of “looping,” where a victim thinks and responds in a variety of ways, p. 74. I had failed to ascertain the many challenges faced by victims besides the consequences of the immediate injury. In particular, I thought an interesting point made by Engel was the weight which societal stigma, as well as the class of the parties, pressured victims to question their right to be compensated for their injury, as well as whether or not they should even bother to try to make a claim for their injury, pp. 101-02. It is important to realize that money equals power, which often can equal influence, and therefore perpetuate an unfair perception that victims who pursue a claim against their tortfeasor are money-hungry and opportunists.

Before engaging with Engel’s theory and assertion of America being mislabeled as a sue-happy society, I had been critical of New Zealand’s social compensation system. I believed their social compensation system was inadequate and too forgiving of tortfeasors. I felt as if this system failed to fairly compensate victims for injuries they had suffered. Unbeknownst to me, I had certainly fallen into the assumption that Americans sue frequently for tort-based wrongs and receive ample compensation. However, the reality as indicated by Engel is that the overwhelming majority of tort victims in America lump their injuries instead of pursuing a claim against the tortfeasor. It was only after concluding Engel’s novel that I began to consider how beneficial the New Zealand compensation model might be for the U.S. tort system, especially in considering the staggering number of victims who do not pursue claims.

In reflecting upon the multi-directional reality of a victim’s thoughts and responses after the injury, I began to understand why the New Zealand compensation model is not only convenient because it gets rid of the headache of litigation, but also that it is kinder to victims. As tort reform has us believe, I had previously focused on the unfair consequences of civil litigation against accused tortfeasors, especially those with deep pockets, and not the many problems facing victims.

Although I do not entirely agree with the New Zealand approach, I believe that a modified version could help alleviate the problems facing the U.S. tort system as well as decrease the number of victims who remain uncompensated despite being wronged. In the U.S., a victim’s recovery is based on his loss and is entitled to any damages he can prove. In the New Zealand compensation system, which replaced tort litigation, a victim is automatically compensated by the government, although not 100%, but then again, there are no litigation costs. I previously saw the fact that victims in New Zealand are not made entirely whole by the compensation automatically received as a flaw, but upon reflection, in practice, neither are U.S. victims, even if they are able to recover against a defendant for every loss, because of the high transaction costs of litigation that eat away at a significant amount of a U.S. plaintiff’s recovery.

I disagree with how all-encompassing the New Zealand compensation system is and would instead choose to limit where and when the automatic compensation would kick in for victims versus when they would have to pursue litigation. In my compensation system, plaintiffs should only be able to take advantage of my proposed version of “automatic” compensation in limited circumstances. I propose a cap at a certain maximum amount for the recovery, which would vary by the tort, and is suitable especially for instances when the victim otherwise would have been seeking an amount against a defendant for less than that maximum amount anyways, or else the victim must instead pursue litigation. Additionally, my new compensation system would be limited to claims between two people. Note that this does not mean claims between two parties: if a victim wants to recover against a company, an organization, or multiple defendants, for example, the traditional route of litigation must be pursued. My compensation model is only available in cases of “simple” torts or claims where the facts and law are cut and dry. I understand these “perfect storm” circumstances are not always the reality, and for more complicated matters the claim should be pursued by way of the traditional route. It is not meant to replace all tort litigation like the New Zealand model does, but instead act as a “channeling” tool to give more victims the opportunity to actually receive compensation and not lump because they lack the resources to pursue a claim or are intimidated by litigation.

My compensation model would pay the victim only after a series of steps that must be completed within a certain amount of time from the alleged injury. Again, this would vary by the tort. The victim first must fill out a compensation request, checking off the “boxes” or categories of injury and recovery being sought, as well as waive their right to pursue litigation against the tortfeasor, providing necessary documentation and records for the losses endured, which would then be reviewed and a “damages” quote sent to both the victim and the tortfeasor. The tortfeasor has a chance to refute that quoted amount with a similar form, attaching necessary documentation. Upon review of this objection, the compensation distributors will either reduce the damages, decline to adjust the amount, or void the victim’s compensation request and recommend traditional litigation because they feel the claim is more complicated than those the compensation system is in place to address. The compensation will then be distributed to the victim and the tortfeasor would be billed for that amount. The tortfeasor is not given the opportunity to make additional objections against the victim’s recovery. My system is victim-friendly and meant to make it easier for them to receive compensation, completely cut transaction and litigation costs for both parties, as well as incentivize the would-be defendant by offering a reduction in what could have been a much higher award, a compromise made the victim in pursuing this route instead of litigation.

My compensation system is meant to be required in certain torts under a narrow scope of circumstances and optional for victims in other instances. I think it would help change the public perception of the U.S. tort system as well as allow litigation to be reserved for serious, compelling cases. It will serve as both a deterrence to future tortfeasors and allow society’s perception of the civil litigation system, as well as compensation in general, to shift by reducing frivolous litigation and righting wrongs committed against individuals with this uniform and conflict-free resolution option.

In sum, Engel offered an important and distinct perspective about the realities of the post-injury process which all tort victims go through in one capacity or another, and why it leads them to lumping rather than making a claim. I do not agree with Engel on some of his points, like his attempt to incorporate religious ideologies and traditions to explain the phenomenon of lumping because it seemed advantageous to point at only certain ideas in Buddhism and Christianity yet leave out something like the Code of Hammurabi which would have been applicable in this conversation. However, Engel does accomplish his purpose of challenging the reader to address their preconceived notions about tort law in the U.S., as well as remember the importance of advocacy for victims.