“Life Without Lawyers” — i.e. Dangerous Without Warning or Responsibility

Via Overlawyered, George Will at the Washington Post favorably reviews Philip K. Howard’s "Life Without Lawyers:"

Long Beach, N.J., removed signs warning swimmers about riptides, although the oblivious tides continued. The warning label on a five-inch fishing lure with a three-pronged hook says "Harmful if swallowed"; the label on a letter opener says "Safety goggle recommended."

Defensive, and ludicrous, warning labels multiply because aggressiveness proliferates. Lawsuits express the theory that anyone should be able to sue to assert that someone is culpable for even an idiotic action by the plaintiff, such as swallowing a fishing lure.

Oh no! Not warning labels. Heaven forbid a company slap a sticker on their product pointing out some of the dangers that the manufacturer, which spent years testing and developing the product, has discovered.

I’ve never heard of any swallowed-fishing-lure lawsuits and George Will doesn’t give any examples. I’d be surprised if a jury heard such "idiotic action" and didn’t send the plaintiff home penniless. If a manufacturer thinks that’s worth warning about, that’s their business. How much does a sticker add to their bottom line? Less than 0.1% of the cost of the good?

Will saves the meat for, of course, a runaway jury:

A predictable byproduct of this theory is brazen cynicism, encouraged by what Howard calls trial lawyers "congregating at the intersection of human tragedy and human greed." So:

A volunteer for a Catholic charity in Milwaukee ran a red light and seriously injured another person. Because the volunteer did not have deep pockets, the injured person sued the archdiocese — successfully, for $17 million.

The Charity Governance blog has a description of the case and a link to the Court of Appeals’ opinion, which was upheld due to an even split by the Wisconsin Supreme Court.

George Will is tilting at windmills. The theory of ‘respondeat superior’ — in which a ‘master’ is responsible for the conduct of their ‘agent’ — is centuries old. In the Milwaukee case, it was undisputed the volunteer was acting in the course of her volunteering for the Christ King Legion of Mary, a volunteer organization staffed and run entirely by the Christ King church.

The question was whether the volunteer was also acting on behalf of Christ King itself, which had a poorly-worded insurance policy that appeared to cover volunteers working on behalf of church employees.

Mr. Hjalmer Heikkiknen (yes, the greedy, cynical man has a name) was 82-years-old at the time. Liability was not denied, as the volunteer had admittedly run a red light.

The accident caused Mr. Heikkiknen to lose a leg as well as all bladder and bowel function, so that he’s now completely dependent on others, including his wife. The $17 million was broken down as $558,366.06 for past medical expenses, $750,000 for future medical expenses, $10,000,000 for past pain, suffering and disability, $5,000,000 for future pain, suffering and disability, and $500,000 to Amelia Heikkinen for loss of society and companionship.

Let’s not be coy: Mr. Heikkiknen’s will spend the rest of his life confined to his bed, with most of time directed towards cleaning and managing his bodily fluids because someone deliberately ran a red light in a rush to deliver a statue. $17 million sounds large, but it’s less than half of the $40 million in coverage available. The church will pay not one penny for the case.

I doubt Mr. Heikkiknen will be around to spend much of it. Assuming Congress fixes the bizarre 0% estate tax rate that occurs solely in 2010, then after credits and deductions Mr. Heikkiknen’s estate will likely be charged a tax between 30-50% of what’s left when he passes away, making the government the principle beneficiary of the verdict.

The bigger issue here is what, exactly, was driving this case. There was no dispute the driver was negligent and no dispute the driver was acting in the course of her work for the church’s volunteer group. One "dispute," if you want to call it that, is if the church’s ambiguously worded insurance policy also covered the church’s volunteer group. The other "dispute" was the exact number it would take to make Mr. Heikkiknen whole again.

It’s possible that the insurance company promptly offered a reasonable settlement to cover Mr. Heikkiknen’s medical bills, future cost of care, and an amount to alleviate the misery he has and will suffer, and Mr. Heikkiknen nonetheless held out from settling, possibly to leave behind a large inheritance for his wife and children.

It’s also unlikely. More likely, the insurance company offered nothing or a pittance, banking that either they would eventually prevail on the terms of the ambiguous insurance contract they themselves drafted or Mr. Heikkiknen would die, severely reducing the potential award by proving that he ‘only’ spent a few months or years in his catastrophically injured state.

They almost won that bet, except that Wisconsin Supreme Court split evenly. Now the money the insurance company was investing (who knows where, likely the same mixture of public and private equity and government debt as most insurance companies) has now been converted into tax revenue, different investments in the same market, payments to medical providers, and some personal expenses for the Heikkiknen family.

And that’s the worst example Howard and Will could find. I’m not impressed.

[UPDATE: Unsurprisingly, other plaintiffs' attorneys, like Brooks Schuelke, are unimpressed.]

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