“If it's worth striving for, it's worth protecting.”

October 20, 2005

By Rob Lambert, President of Asset Protection Corporation

If you haven’t noticed already, our legal system is hopelessly out of control without any chance of reform. With outrageous jury awards, shameful legal fees, and millions of frivolous lawsuits being filed each year, we are close to becoming nothing more than a nation of lawyers!

The U.S. is the most litigious society in the world. It’s been estimated that 90 percent of all lawsuits WORLDWIDE are filed in the U.S. What makes this even more shocking is that the U.S. has only 7 percent of the world’s lawyers!

Each year, close to 40,000 students graduate from law schools in the U.S. Armed with their law degrees, these men and women have to scramble to earn a living in a job market heavily saturated with attorneys. It’s no small wonder that many discover that being a trial lawyer is a lucrative way to make a living. What makes this more interesting is the U.S. Labor Department’s Bureau of Statistics says that employment of lawyers is expected to grow by 36 percent through 2012!

Since the early 1960s, there has been a literal explosion in civil lawsuits. In fact, it has been estimated that 70,000 lawsuits are filed daily. If we do the math (and leave out Saturdays and Sundays), that’s 350,000 lawsuits filed a week, totaling up to 10,200,000 lawsuits filed a year! (And any attorney can file a lawsuit; all it takes is filling out the paperwork and paying a couple hundred dollars to file.)

Let me put it another way: Tort case costs total over $200 BILLION dollars annually! This amounts to 2 percent of the Gross Domestic Product, and it’s significantly higher then anywhere else in the world!

You might think that the plaintiffs in these lawsuits win big. Not so. The real winners are the trial lawyers themselves. To the tune of $39 billion a year, trial lawyers make more in revenue than companies such as Microsoft, Pfizer, Coca-Cola, etc.

Meritorious cases, which are legitimate claims filed by people deserving of collecting money for their injuries, often take years to wind their way through our overburdened court system. These people are forced to wait in line behind frivolous lawsuits choking nearly every court docket across the country.

If you want to hear what the other side has to say, the Association of Trial Lawyers of America (ATLA), a huge and well funded lobby, claims that trial lawyers are getting a bad reputation, and that frivolous shakedown suits are rare. They further claim that ingrained in our legal system are procedural safeguards preventing such frivolity, such as needing to have a certain amount of strong evidence present for any case to proceed, and having judges monitoring filings at every step with the ability to dismiss a case at almost any time.

The ATLA also cites that thousands of frivolous lawsuits are not filed every year, and that such lawsuits are nothing more then “urban legends,” citing the “Stella” awards as an example. ( “Stella” is named after Stella Liebeck who sued McDonald’s after being scalded by a cup of coffee she bought there, allegedly winning a huge settlement from the company in court.)

The ATLA went so far to say that bringing frivolous lawsuits is “bad business,” and further stated that “when an attorney takes a case on contingency, s/he only gets paid for winning. Spending valuable time and money filing frivolous lawsuits that are thrown out by the judge is no way to make a living.”

Whatever the ATLA claims, it would be great…if it were true. Unfortunately, although judges can dismiss suits as frivolous, such cases still make it to court. And, yes, lawyers can be disciplined for bringing a frivolous suit to court, but this rarely happens.

The ATLA further claims that malpractice suits aren’t on the rise and that doctors aren’t “disappearing” because of an increase in malpractice suits.

Let me clue you in: Last year the American Medical Association warned that million-dollar jury awards and a flood of frivolous lawsuits are increasing the cost of doctors' insurance and creating a "full-blown liability crisis." Each year many groundless malpractice suits are initiated against health care providers, with the result of soaring malpractice. And no doctor is safe! It was reported by the Medical Economics Journal that 52 percent of physicians had been targets of lawsuits. Because of this, many physicians have been forced to relocate to areas having few malpractice suits, practice medicine without having any insurance, or leave their profession entirely.

So, as you can see, lawsuits exact a heavy financial toll and have an effect on all of us! Because of lawsuits, the prices we pay for food, clothing, fuel, etc., go up because the companies manufacturing these items have to pay the legal costs.

This is definitely something to think about.

Best,

Rob

If you would like more information regarding asset protection, trusts, family limited partnerships or the subject of this article please call or email our office.