Tort Reform: It is a Question of Fairness!

Robert D. Wurtz, CPCU

General Administrator of Wisconsin County Mutual Insurance Corporation "Tort reform" is a phrase made up of two words that we hear together so often we have begun to think they can have no meaning without each other! The fact is, the individual words with their individual meanings have been suffused together so often in an emotionally charged context that the phrase itself has developed a meaning of its own. The combination has a devious sort of synergism that at once gives it a gut level emotional context that each word could never generate on it's own. If you do not believe this, the next time you have a speech in a room with more than one practicing civil trial attorney in it, lead off with a loud "tort reform!" You will have their attention. Guaranteed!

The emotional hit in the phrase has only come about in very recent times. When I started my career in the late sixties "tort" was a word with a strict legal meaning not used in polite dinner conversations and "reform" was something big city politicians (sorry Tom and John!) or sixteenth century priests did. What caused this change and why didn't we read about it in the newspaper?

As I said the last time I wrote an article for the Wisconsin Counties Magazine, please make allowances for me because I am not a lawyer and my only qualifications are twenty-five years as an "insurents sailsman." (Did I spell it right this time Michelle?) This would also tend to give me a slight bias on the defense side of the issue but I will try to be at least as objective as our friends who are with the plaintiff's bar fighting for "victim's rights".

When I started my career the meaning of the word "tort" approximated that of the dictionary, that is, "a wrongful act, damage, or injury done willfully, negligently, or in circumstances involving strict liability, but not involving breach of contract, for which a civil suit can be brought" (italics mine). It comes from the Latin word "tortum" or "torquere", meaning "to twist". No kidding! I looked it up! That is the most succinct definition of what a lawyer does that I have ever seen.

The difference in the meaning of "tort reform" from then to now has been the evolution of common law that has taken place in the last twenty-five years. We wrote liability policies with $100,000 limits back then. Now you could not nick the fenders on some cars for that! The change has been dramatic and sweeping yet so incremental as to be unnoticeable unless you look at where we were verses where we are in one snap shot.

As I was entering the insurance business as an underwriter trainee, there was a legal concept called "contributory negligence". This was a potentially very unfair legal defense that said that even if I ran you over well negligently driving too fast, if you were negligently reading a book while you crossed the street, your negligence precluded me being financially responsible for my negligence. Sorry! It's O.K., I'll send flowers.

The concept of contributory negligence is still around but it has been diluted, almost to nonexistence, by another legal concept called "joint and several" liability. This is truly a great concept, not unlike progressive income taxes. Basically, what it says is that, "if you got, you pay!" or, as Karl Marx said, "to each according to his need, from each according to his ability" (to pay). The connection to the concept of negligence is tenuous, to say the least. There just has to be some negligence there to make you fully responsible for all damages.

Joint and several liability means that each and every negligent party, regardless of their individual degree of negligence, is jointly and individually, fully liable for the financial impact of all damages or injuries to an injured party. The application of the concept insures that as long as somebody near the scene is financially sound, they can be had. The plaintiff's lawyers will tell you, with a straight face, that this is to insure that the victim's damages are taken care of. He will definitely not tell you that it also so his or her 33 to 50% contingency cut will also be covered.

Anyone with a basic level of humanity does not want to see an injured person suffer. Most of us who have the means are willing contribute to help out someone who needs help. We will do what we can to alleviate another persons injuries or pain. It is the way of civilization and separates us from the rest of nature. Of course, this also includes those who injuries are not caused by anyone's negligence, such as storm, flood, or earthquake victims or victims of illness. The concept of negligence is an adjunct which allows us to conveniently make someone financially responsible for the injured party.

The concept of liability for negligence is debatable. Everyone is negligent every day in some way or another. You may forget something or do something without thinking, both types of actions may be negligent. It is the degree of negligence that swings our viewpoint of responsibility. We reason that the responsible party should pay. But, if for social reasons, we truly want to insure that injured parties are always compensated wouldn't we want to do it regardless as to whether or not those injuries were caused by someone's negligence? Wouldn't a system like the Worker's compensation system in Wisconsin be a better vehicle? It returns much more of the dollars spent to the injured party than does the liability system where the legal determination of negligence consumes around fifty percent of the benefits paid. Let's analyze the concept of negligence and joint and several liability.

If a drunken driver drives her car into a packed restaurant injuring people, most of us would agree that she should be held responsible. Most of us would even agree that the bar where she was over-served has some responsibility. Some of us might even say the waitress who served her has a degree of responsibility. How many of us would be willing to assign some responsibility to the boyfriend who insensitively left with another woman after dinner, leaving her hurting at the bar. How far out does the responsibility play.

Few of us foresee the immediate results of our negligent actions let alone the ultimate outcomes in the extreme circumstances. Yet this is the way our legal system assigns financial responsibility for injuries. The issue is fairness. When is it fair to assign full responsibility to a party for their negligence and when is it not fair.

To look at it another way, let's assume for a moment that we all agree that the negligent parties in an accident should pay for the injuries and damages that their negligence caused. Lets say we have three parties who are 60%, 30%, and 10% negligent, respectively. Under our current system of joint and several liability , if the parties who are 60% and 30% responsible have no assets, the party who is 10% negligent pays the whole bill. This is really interesting when the injured party is the one who is 30% negligent.

By the way, in spite of the fact of what we all know is true about the "infinite" capacity of county governments to tax, the courts always look at governmental entities, including counties, as being financially responsible. As a county government, you are always responsible! You may think I exaggerate but let me relay one of many cases that Wisconsin County Mutual Insurance Corporation has handled for a county where the county's negligence was tenuous, to say the least.

One of our member counties, who shall remain nameless, had a plow on the road during a storm to try to keep the road open as they are statutorily required to do. A driver, whose wife was a passenger in the car, was coming in the opposite direction of the plow who was plowing the center line within the proscribed procedures (less than one and one half feet over the center line). The sight of the oncoming plow panicked the driver. His vehicle had bald tires and distinctly did not handle well on the snow covered highway. With his limited control, he swerved towards the right shoulder, over corrected, and swerved into the oncoming lane of traffic behind the passing plow. The ensuing head on collision with the vehicle traveling behind the plow severely injured the panicked driver's passenger, his wife.

Most of us, and the courts, would agree that the panicked driver had, by far and away, the most negligence and primary liability for this accident and severe injuries to his wife (her hospital bill alone was over $220,000). Some of us might say his wife might have some liability for riding with him in a poorly maintained vehicle on a day such as it was. Unfortunately, the couple had no insurance or other assets to speak of. The county would have to contend in court that it had no negligence whatsoever, and proving that you could not have driven slower, pulled over to the right, or whatever, would leave the county a in tough position with this severely injured lady sitting in court. We would probably be found by a jury to have 5% negligence just for being there. Needless to say the Mutual and the county paid.

Almost all the states of the union have evolved the concept of joint and several liability. Most states though (37 to be exact), are ahead of Wisconsin in that their legislatures have modified its application to mitigate the worst results of its most extreme applications.

The Wisconsin legislature periodically looks into tort reform. Most recently, the Senate has passed S.B. 152, which, as I understand it, would put some limitations on the worst excesses of joint and several liability. It would reduce the defendant's negligence by the plaintiff's percentage. It also sets aside punitive damages (those assessed over and above economic damages for strictly punitive and behavioral modification incentive reasons) into a fund to pay for injuries to victim's which are reduced by the application of this change. Punitive damages are always over and above economic damages and have nothing to do with the victim's requirements. There is no reason for them to be paid to the victim of the negligence for which they were assessed as they are usually assessed for willful or intentional acts.

S.B. 152 would seem to be a intelligent and socially positive bill but it is having trouble in the Assembly. As you would expect, the plaintiff's bar is very much against it's passage and many legislators are heavily indebted to this financially powerful group for campaign financing. To many in the Assembly, it looks like political suicide to vote for this bill. It behooves you and the taxpayers you are responsible to, to let your Assembly member know where you stand. Please take the time to do so, often and loudly. Maybe we can yet bring some level of fairness back into our civil justice system and get benefits more assuredly and timely into the hands of accident victims.