It was obvious to almost everybody after the twin towers came down that the foreseeable plague of lawsuits against the airline industry and the owners of the destroyed World Trade Center-as well as its architects, engineers, builders, insulation suppliers, and every other solvent company that had anything to do with the place, not to mention Boeing Co. and the City of New York-would be a repugnant spectacle.
Hence, Congress has essentially immunized the airlines (by limiting their liabilities to their insurance coverage) and other possible defendants while appropriating more than $4.5 billion for a victims fund, governed by an administrative process designed to afford swift and adequate compensation by channeling claims away from the courts and awards away from the lawyers. Even the head of the lawsuit-happy Association of Trial Lawyers of America, apparently anxious to keep the rapacity of its members and the irrationalities of the civil justice system out of the spotlight, called for "a moratorium on civil lawsuits that might arise out of these awful events."
While spurred by the unparalleled enormity of these mass murders, these adaptations also reflect an implicit recognition of the deep flaws in our tort litigation system. And the impulse to avoid litigation over September 11 should spur deeper thought about how to remedy these flaws: The system leaves most accident victims uncompensated, is most generous to those least in need, "compensates" some who are not victims, and often soaks corporate defendants that did little or nothing wrong. It also squanders most of the money exacted from defendants and insurers-more than 60 percent, in most cases-on legal costs, including fees so large as to make many lawyers fabulously rich.
Perverse as it may seem to sue airlines and building owners for failing to prevent mass murders, these lawsuits-and there will be lawsuits, plenty of them, mostly by affluent plaintiffs unsatisfied with their shares of the congressionally appropriated fund-will be little more far-fetched than many other suits. They will represent a reductio ad absurdum of a system already awash in absurdities.
The major chemical companies that had sold Agent Orange to the government for use in Vietnam were forced in 1984 to pay $180 million to settle suits by thousands of sick veterans who were almost certainly mistaken in attributing their ailments to Agent Orange. The manufacturers of silicon breast implants have paid more than $7 billion to women with terrible illnesses that almost certainly were not caused by breast implants. Crime victims routinely sue motels, schools, and others for failing to do enough to protect them from criminals. Lawsuits and threatened lawsuits have depressed the stocks of entire industries, especially the managed care industry.
The lawyers who became rich from the initially justifiable lawsuits that bankrupted virtually every company in the asbestos industry have enlarged the pot by launching massive litigation wars against other companies that had only the most glancing connection to the stuff, and no reason to know of its dangers. Many and perhaps most of the clients recruited by these lawyers as plaintiffs in recent years have not been and never will be made sick by asbestos. Those who do become sick will have fewer and fewer solvent defendants left to sue. And so on, and on.
Two popular illusions sustain this litigation lottery: that ever-wider corporate liability is a good way to compensate injured people in need, and that the system punishes malefactors of wealth. In fact, only a small minority of accident victims (excepting those hurt in auto accidents) have the resources to sue and win. Most receive no compensation at all. And in some areas, the correlation between persons harmed by negligent conduct and those who win compensation seems almost random, with outcomes turning less upon moral desert than upon legal technicalities, the skills of the lawyers, and the whims of judges and juries.
At the same time, the urge to find someone to compensate accident victims has stretched the concepts of negligence and legal fault to the point of imposing liability upon many corporate defendants that have done little or nothing wrong. And even when companies have done wrong, the responsible officials are rarely affected by lawsuits, and the companies themselves and their insurers usually pass the costs along to the rest of us through higher prices. So tenuous has the connection between fault and liability become that companies are reluctant to develop products-such as contraceptives and the new vaccines that we need to protect us from bioterrorism-that may become targets for lawsuits.
The outlines of the federal government’s September 11 compensation plan, ably crafted by Kenneth Feinberg, the special master appointed to distribute the funds, show how an administrative program can improve on the litigation system, at least in mass-injury cases. People seriously hurt in the September 11 attacks and survivors of the approximately 3,000 who were killed can get swift, certain governmental payments if they give up the right to sue anybody but the terrorists. The specific amounts, ranging from about $300,000 to more than $4 million for next of kin, will be determined by formulas depending on the murdered victim’s age, income level, number of dependents, and other factors. None of the money will be spent assigning blame, and little will be spent on determining who gets how much. There also will be no punitive damages and relatively limited payments to families for the pain and suffering of dead victims.
Critics have no shortage of complaints: that Feinberg’s unavoidably cold-blooded charts place a far higher dollar value on the life of an investment banker than on that of a janitor; that the plan guarantees the investment banker’s survivors far less than they might hope to win in successful lawsuits if Congress had not shielded potential defendants; that it reduces awards to people who receive life insurance payments or pensions but not to those who get generous amounts from private charities. Such complaints reflect the inherent arbitrariness of all efforts to place monetary values on human lives. But Feinberg’s chart is far less arbitrary, and more egalitarian, than are litigated court awards and settlements, which are typically more generous to affluent plaintiffs (whose lost income is larger) and skewed by the luck of the draw inherent in the litigation lottery.
Largely lost in the unedifying squabbles over who should get how much is the unfairness inherent in the plan itself, which was propelled into law by a (justifiable) one-time rush of national generosity to those most directly affected by an attack on the nation itself. Most of the survivors would have received little or nothing (excepting any private life insurance) had their loved ones died in the Oklahoma City bombing, for example. They have no more compelling a moral or legal claim to compensation from the government or anyone else-except the terrorists-than do the victims of other acts of terrorism, ordinary murders, or freak events such as tornados. The reason that Congress needed to shield the airlines and others from lawsuits was simply that the courts cannot be relied upon to shield blameless defendants.
It is easier to identify the litigation system’s flaws than to come up with workable fixes, let alone get them past the trial lawyers’ lobby. Junking the tort system, barring contingency fees, or putting arbitrary caps on real (economic) damages would leave victims even worse off than they are now. For all its inadequacy as a compensation system, the threat of liability for real negligence is reasonably effective at motivating companies and individuals to make safety a priority. And removing or blunting that threat would offend most people’s sense of justice.
But the system is badly in need of reforms, which should be carefully crafted to serve the same general purposes that Congress and Feinberg seek to serve in the case of the September 11 victims. The most-obvious benefits to possible defendants would come from shielding those who did little or nothing wrong, eliminating (or at least curbing) runaway punitive damages, avoiding double payments to privately insured plaintiffs, and holding down legal costs. But a balanced reform program would also benefit deserving accident victims, by adopting incentives to spur prompt, reasonable settlements without years of litigation, and by judiciously curbing unreasonably large contingency fees. The September 11 fund also provides a precedent for Congress to provide a safety net for other injured people who lack legitimate legal remedies or private insurance, by moving closer to a governmentally funded social insurance program for all innocent, seriously injured victims of accidents and criminal violence.
In the past, most tort reform proposals supported by the corporate sector and conservatives have been solely for the benefit of defendants. The congressional response to September 11 could be a step toward an enlightened liberal-conservative coalition to help injured people too, by providing prompt, efficient compensation and by attacking legal waste.