The Sue-Happy Lie: Don’t Believe Every Legal Infographic You See
Search engine optimization is all the rage today, and one of the most common tools is to create an infographic. In theory, people will see your pretty graphic and, if they agree with it, will link to it, and thereafter sprinkle your website with more Google SEO fairy dust. The folks at SEOBook made infographics about Google’s algorithm. Even big firms like Morrison & Foerster are into the infographic game with their Short History of Social Media.
That’s not to say all infographics are bad. I like both of the above graphics. Information Is Beautiful truly is beautiful, and appears accurate to me, like with their Snake Oil interactive visualization of the scientific evidence for over one hundred nutritional supplements. Ecomom’s infographic of the surprise toxins and poisons in your home is quite interesting, too.
But then I see in the HotLawTopics Twitter stream:
HotLawTopics, run by West, is normally a decent news curator, and so I was disappointed to see a link to the “Sue-Happy America” (nofollow’d) infographic from eLocalLawyers, apparently yet another lawyer directory, which starts out:
It seems like every day we hear about another ridiculous lawsuit.
Although the worst of them (such as the man who tried to sue himself) usually don’t go anywhere, the sad truth is that the USA is the most litigious nation in the world, and we waste huge sums of money on the system that supports our lawsuit addiction. But is it really a handful of greedy people who are to blame, or does the problem go deeper?
The graphic then has all kinds of “facts” about “America’s Obsession with Lawsuits,” including the claims that America spends $251 billion each year on tort costs, that “$1.6 billion was spent on settling frivolous lawsuits outside of court,” and that “less than 15 cents of every dollar for the cost of a tort goes to compensation for the litigant.”
As a bonus, they include a hopelessly misinformed and garbled definition of frivolous lawsuit as “a suit that the litigant has a very low chances of winning,” as if a challenging (“very low chances of winning”) lawsuit was the same as a frivolous (“meritless”) lawsuit. The plaintiffs in Brown v. Board of Education expected to lose at the District Court and they did; was that suit frivolous?
But more interesting were their “sources” for the above “facts.” I asked eLocalLawyers about their sources but heard nothing back. Most of the “facts” came from two links on pacificresearch.org — the website for the Pacific Research Institute, a right-wing advocacy group funded by Altria, Exxon Mobil, Pfizer, and the pharmaceutical industry’s lobbying group, PhRMA. (See also here.) The foreward to PRI’s “U.S. Tort Liability Index” — the primary source for the “Sue-Happy” graphic — was written by notable half-term governor and non-lawyer Sarah Palin.
That study admits it has no original data, but instead takes its cues from the notoriously inaccurate Tillinghast-Towers Watson study (more on that in a moment), then gloms a bunch of arbitrary costs. When they calculate tort costs, more than half of them are meaningless guesses like “Costs Due to Less R&D and Innovation,” “Administration Costs,” and “Deadweight and Miscellaneous Costs.” That’s where Sue-Happy’s supposed “less than 15 cents” number comes from. Some “source.”
The Towers Perrin / Towers Watson study, the sole source of most of these claims, remains discredited. (Hat tip: The Pop Tort). The study ignores actual verdicts, settlements, and litigation costs in favor of claiming that every dollar transferred to a victim is a “tort cost” — in blatant ignorance of the Coase Theorem that has governed all study of torts for two generations now — which even the Wall Street Journal admits is an inappropriate way to evaluate tort costs, as I discussed here almost three years ago. In the context of medical malpractice, the Towers study inflated tort costs by 400% as compared to the numbers determined by A.M. Best, so we can assume they’re probably doing the same thing here.
All of which is to remind everyone they can’t believe everything they read on the internet, whether or not it comes with a pretty infographic.