Virginia, testifying before the Senate Consumer Subcommittee of the Committee on Commerce, Science and Transportation on behalf of the Conference of Chief Justices stated that, "...the study is the most authoritative available and the burden of proof has shifted to those who now would claim the existence of the [litigation] explosion..." Furthermore, testimony by the Institute for Civil Justice of the Rand Corporation before the Subcommittee on Trade, Productivity, and Economic Growth of the Joint Economic Committee of Congress, further evidences the lack of any "explosion" in the number of tort filings between 1981-1984. Additional support for this finding is available from Gerald T. Wetherington, Chief Judge of the Eleventh Judicial Circuit of Florida (Dade County, Florida). The National Center report was originally designed to test a general propensity to sue. The casetypes that specifically addressed this issue are tort, contract, real property rights, and small claims. The general finding is that, "A careful examination of available data relating to tort, contract, real property rights, and small claims cases from a representative group of state courts provides no evidence to support any allegation of a steep, continuing upward trend of the referenced civil case filings in the state trial courts during the 1981-84 time period." There are some state courts that have experienced significant increases in the filings of the casetypes described, but those are courts in states that have also experienced significant increases in their total populations. Thus, changes in the number of these filings for 1981-1984 are not attributable to an increase in the propensity of Americans to sue, but rather to an increase in the number of Americans. The findings, however, can be extended one further step. Not only is the evidence missing to indicate a significant national increase in filings above the increase in population, but in a number of state courts, selected civil filings have decreased between the period 1981-1984. It may be that there was a litigation explosion that peaked around 1981. The evidence tends to support that observation. There were significant increases in filings between 1978-81, far exceeding the increases in population. In fact, the increases were so large during 1978-81, that despite the decreases that occurred during 1981-84, the percentage changes from 1978-84 are still showing moderate increases. Torts are of particular interest in this matter. The increase in tort case filings between 1978-81 was only 2%, while the population for those states grew 4% during the same time period. Between 1981 and 1984 the population grew another 4% while tort filings increased by 7%. For the entire period 1978-84 total tort filings increased 9%, however, the population also increased by 8%. Clearly, this increase does not qualify as an "explosion." The "litigation explosion" has several dimensions, and the perception of a continuing upward trend of civil lawsuits in the state courts could result from confusing the number of new filings with the other dimensions of the problem: (1) intensive media focus on the enormous "size of the awards" in a few selected and well publicized civil cases; and (2) increased workload in the courts, not caused by an increase in the rate of civil lawsuits, but by "more complex cases," and perhaps fewer resources available to the courts to handle expected increases in filings which results in larger backlogs. Additionally, there are a variety of potential explanations for the leveling off or decreases in civil suits during that time period: (1) The public's attitude toward lawsuits may be changing. People may be deterred from filing in court as a result of concerns about costs and civil litigation that is likely to take years--except for the more serious cases, it may not be worth the effort; (2) For years people speculated that greater numbers of laws resulted in increased litigation to interpret those laws--this testing of new legislation and judicial rules may have run its course; and (3) Finally, and perhaps most importantly, insurance companies and attorneys may be increasing their efficiency in settling conflict before cases reach the courts. The existence of any litigation explosions has been cyclical, and there is no evidence to support the notion of a continuing nationwide increase in lawsuits in the state trial courts between 1981-84. What is absolutely clear from the current debate is the lack of information on the topic of the "litigation explosion." Appendix A outlines some of this problem's dimensions: the number of total disputes (most of which may never reach court); the number of court filings; the types of court outcomes; the complexity of cases; and the resources available to courts. Reliable, comparable, and national data that address all of these dimensions are simply unavailable. For example, we are unsure of: how many cases are settled, withdrawn or defaulted prior to a court filing; the size of pre-filing settlements; the distribution of types of torts in the state courts; the percent of the time the plaintiff actually wins; the amount of damages that are compensatory or punitive; the median size of jury awards; the reduction of jury awards by judges; what happens to jury awards on appeal; how much of the awards are actually paid in lump sums vs. structured settlements; and the impact of complex litigation and available resources on court workload. In the absence of this information, one cannot make an educated guess about the existence of a "litigation explosion." We need more data to address this problem, and ought to be cautious about making major changes in the legal system based on anecdote and the existing information. After studying this issue, the Iowa and Alabama state legislatures concluded that more research is needed. They appropriated money to further study these questions. Late this fall, the National Center for State Courts will publish a complete study of these problems. The study will: update the findings of the Preliminary Report with 1985 data; summarize all of the research that is currently available on the topic; develop a typology for organizing the dimensions of this problem; and outline research methodologies for addressing these unanswered questions. Again, we thank you for the opportunity to express views on this topic. Appendix A DIMENSIONS OF A CIVIL "LITIGATION EXPLOSION" O NUMBER OF DISPUTES Number of disputes involving insurance claims Number of settled, defaulted, and withdrawn cases O NUMBER OF COURT FILINGS Number by casetypes per capita over time (tort, contract, Number by tort casetypes per capita over time (medical PRODUCT LIABILITY REFORM ACT-S. 2760 WEDNESDAY, SEPTEMBER 10, 1986 U.S. SENATE, COMMITTEE ON THE JUDICIARY, Washington, DC. The committee met, pursuant to notice, at 9:07 a.m., in room SD226, Dirksen Senate Office Building, Hon. Strom Thurmond (chairman) presiding. Present: Senators Broyhill, McConnell, Heflin, Grassley, Simon, and Specter. Staff present: Mike Regan, counsel; Lawrence R. Herman, chief counsel (Subcommittee on Courts); and Christopher Dunn, minority counsel. OPENING STATEMENT OF SENATOR JAMES T. BROYHILL Senator BROYHILL [presiding]. The committee will come to order. The committee is holding a hearing on S. 2760. We are delighted to hear from the distinguished Senator from Missouri, Senator Danforth, who is the chairman of the Commerce, Science, and Transportation Committee and whose committee has reported S. 2760 and has original jurisdiction over this legislation. We are delighted to have you come and testify this morning. We will be delighted to have your testimony inserted in the record and you may summarize. [The prepared statement of Senator Thurmond follows:] PREPARED STATEMENT OF CHAIRMAN STROM THURMOND The Senate Judiciary Committee today considers S. 2760, the Product Liability Reform Act, a bill drafted by the Senate Commerce Committee which provides for a uniform Federal product liability law. This legislation represents months of efforts by the Commerce Committee to write a consensus bill which could be considered by the full Senate. Despite the good faith efforts of members of both the Commerce and Judiciary Committees, we were unable to obtain a sequential referral of S. 2760. Regardless, the members of the Judiciary Committee believe it is appropriate that the committee carefully review legislation which affects standards of liability and civil procedure in tort actions. Therefore, the committee is holding these two days of hearings, with an impressive witness list, to examine S. 2760 in detail. Tort reform legislation-the need for it and, if there is a need, the exact shape it should take-has been a hotly debated topic of late. In the last decade, we have witnessed an erosion of the traditional concepts of fault-based liability, which have been gradually replaced by no-fault and strict liability theories. These developments have significantly increased the number of lawsuits that are clogging our court system and have contributed to the dramatic increase in the number and size of monetary awards. While the underlying causes of these developments may be debatable, no one disputes the dramatic impact that expanded tort liability has on our lives. Liability, or the fear of liability, affects the price and types of products we buy, the manner in which we conduct business, the price and availability of insurance, the permissible |