Removing Incentive For Lawsuit Lotto: Punitive Damage Awards Should Go To The State
There are a whole class of plaintiffs who use the legal system to play "lawsuit lotto". This is an attempt to win a lawsuit in order to get a large punitive damage award.
In support of their efforts, there are legions of lawyers who are willing to take on their cases on a contingency fee basis. What is a "contingency fee basis": a lawyer takes on a case for free, on the basis that, should the plaintiff prevail, the lawyer collects a portion of the damage award (typically 30%, sometimes 50%) as a fee. The plaintiff pays nothing unless he/she prevails and collects from the defendant.
I'm not too crazy about contingency fee cases, as I've represented my clients on the defendants side. There's little motivation for a plaintiff to settle, or to settle for some amount less than what he/she wants...the lawsuit costs them nothing. However, I understand that contingency fee cases are are a necessary evil, as low-money defendants need their day in court, and lawyers are not cheap.
Back to damages.
There are two types of primary damage awards, compensatory and punitive. There are other damage awards types, but these are beyond the scope of this article.
Compensatory damages are for the purpose of making the plaintiff whole...putting him/her in a position as if the defendant had not committed the wrong. In personal injury, this could be payment of hospital bills, lost salary, repair of a car; in business litigation this could be lost profits; in contracts litigation this could be payment of another to fullfill contract obligations. Today, lawyers are trying to use compensatory damage measures in a punitive fashion, but this is a different topic for a different day.
Punitive damages exist for the purpose of punishing the defendant, not for enrichment of the plaintiff. As such, it's my proposal that all punitive damage awards should go to the State.
There are a number of benefits that could be gained by this:
1) Juries (who are human, after all) will not need to feel like they're simply giving money to a plaintiff that the plaintiff doesn't deserve;
2) The incentive to play "lawsuit lotto" will decrease, as the plaintiffs won't get to pocket punitive damages. Compensatory damages are measurable, for the most part, and thus a wronged plaintiff can be fairly compensated;
3) At least in the short term, the State will receive additional monies to its coffers;
4) Cases in which punitive damages are truly warranted - i.e. plaintiffs are not simply trying to get rich - will be litigated;
5) A whole class of plaintiffs can be removed from court dockets - law suit lotto plaintiffs - as well as their lawyers;
6) The effect upon society of lawsuit lotto can be reduced, reducing insurance rates and cost of doing business in the state. These directly affect the cost of goods and services; and
7) Remove the need for thousands of lawyers. BTW, these are the people who would be most adamantly against actual implementation of what I propose.
California has a ballot initiative system...anyone care to work on this with me?
In support of their efforts, there are legions of lawyers who are willing to take on their cases on a contingency fee basis. What is a "contingency fee basis": a lawyer takes on a case for free, on the basis that, should the plaintiff prevail, the lawyer collects a portion of the damage award (typically 30%, sometimes 50%) as a fee. The plaintiff pays nothing unless he/she prevails and collects from the defendant.
I'm not too crazy about contingency fee cases, as I've represented my clients on the defendants side. There's little motivation for a plaintiff to settle, or to settle for some amount less than what he/she wants...the lawsuit costs them nothing. However, I understand that contingency fee cases are are a necessary evil, as low-money defendants need their day in court, and lawyers are not cheap.
Back to damages.
There are two types of primary damage awards, compensatory and punitive. There are other damage awards types, but these are beyond the scope of this article.
Compensatory damages are for the purpose of making the plaintiff whole...putting him/her in a position as if the defendant had not committed the wrong. In personal injury, this could be payment of hospital bills, lost salary, repair of a car; in business litigation this could be lost profits; in contracts litigation this could be payment of another to fullfill contract obligations. Today, lawyers are trying to use compensatory damage measures in a punitive fashion, but this is a different topic for a different day.
Punitive damages exist for the purpose of punishing the defendant, not for enrichment of the plaintiff. As such, it's my proposal that all punitive damage awards should go to the State.
There are a number of benefits that could be gained by this:
1) Juries (who are human, after all) will not need to feel like they're simply giving money to a plaintiff that the plaintiff doesn't deserve;
2) The incentive to play "lawsuit lotto" will decrease, as the plaintiffs won't get to pocket punitive damages. Compensatory damages are measurable, for the most part, and thus a wronged plaintiff can be fairly compensated;
3) At least in the short term, the State will receive additional monies to its coffers;
4) Cases in which punitive damages are truly warranted - i.e. plaintiffs are not simply trying to get rich - will be litigated;
5) A whole class of plaintiffs can be removed from court dockets - law suit lotto plaintiffs - as well as their lawyers;
6) The effect upon society of lawsuit lotto can be reduced, reducing insurance rates and cost of doing business in the state. These directly affect the cost of goods and services; and
7) Remove the need for thousands of lawyers. BTW, these are the people who would be most adamantly against actual implementation of what I propose.
California has a ballot initiative system...anyone care to work on this with me?
posted by cookies at 7:00 AM
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