Professor Rhode Takes On Tort Reform in Third Annual Siegel Lecture

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Professor Deborah L. Rhode clarified problems with the American tort system and proposed solutions when she delivered the third annual Rabbi Seymour Siegel Memorial Lecture in Medical-Legal Ethics on Mar. 31. Professor Rhode is the Ernest W. McFarland Professor of Law and Director of the Stanford Center on Ethics at Stanford University. She based her talk, “Litigation and its Discontents” on a chapter of her upcoming book, Access to Justice.

Before an audience of students, faculty and friends of the Law School, Rhode lamented the distorted perception of both litigation-related problems and their root causes, which lead to ineffective tort reforms. “The result is that reform strategies are proceeding without an informed understanding of procedural pathologies, their underlying causes, and the complex tradeoffs that solutions will require,” she said.

Rhode challenged the common belief that excessive litigation is the core problem. American litigiousness, itself a myth, is not damaging the U.S. economy or driving malpractice premiums up and doctors out of business, she said. Rhode traced recent increases in malpractice premiums to economic factors other than tort awards and liability risks.

The real problems with the litigation system, Rhode suggested, involve its expense, inefficiency and the inconsistency of results. Few victims file successful claims, those with the most serious injuries receive too little and, all too often, lawyers are overcompensated. Citing class action cases, where class members’ injuries are often minimal yet settlements are expedient, Rhode noted that, “the real parties in interest are the lawyers.”

Many problems could better be addressed by legislation or regulation, Rhode said, such as the tobacco litigation, where legal fees totaled as much as $150,000.00 per hour. In that instance, the money could have “more productively gone for treatment if the government had acted earlier.”

Exploring ideological and structural roots for litigation in America, Rhode cited the national reluctance to rely on a centralized government to meet social needs; Americans may need to turn to courts to address injuries that elsewhere could be dealt with by administrative and social services.

Rhode and colleagues
Professor Rhode with Allen Siegel '60 and his wife, Rochelle

Addressing reform, Rhode said the main goals of the tort system should be dispute resolution, victim compensation and deterrence of negligence. “Criteria we use for assessing the performance of that system ought to include its costs in time, money and acrimony, and its procedural and substantive fairness,” she said.

Yet many strategies, such as damage caps and non-voluntary alternative dispute resolution, fall short by those criteria. The former, she said, generally fail low-income earners whose injury-induced losses are non-economic, and do little to stabilize health care premiums. The latter can be tainted by inequalities in power and resources as lawsuits currently are.

Rhode advocated the use of streamlined, no-fault compensation systems, such as the “honesty policies” of a growing number of hospitals and insurance companies, under which patients are informed of mistakes and compensated for economic losses and expenses. In the malpractice context, these programs are cost effective, quick and offer coverage for a broader group of victims. “A rational reform agenda would provide more experimentation with such no-fault frameworks, specialized tribunals and other ADR approaches, as well as more systematic information about their effectiveness,” said Rhode.

Finally, Rhode called for better disciplinary processes for doctors and lawyers in order to weed out those with a history of incompetence. Building more incentives for prevention of avoidable errors, particularly in health care systems, could also help. “Courts, bar associations, and legislatures could also do more to curb excessive legal fees and frivolous cases,” she said.

Rhode concluded that effective tort reform depends on political and public will. “We do not lack for promising proposals. But we do lack an informed public committed to addressing the most fundamental problems and the forces that perpetuate them,” she said.

The Rabbi Seymour Siegel Memorial Lecture in Medical-Legal Ethics is sponsored by labor lawyer and senior lecturing fellow Allen Siegel ’60 in honor of his brother who died in 1988. Rabbi Siegel was a leading scholar in theology and ethics, particularly medical ethics.