Lawyers in a Feeding Frenzy

Piper Aircraft is packing its bags and moving to Canada. The company says it's leaving the country to get away from a legal system that's turned predatory. Lawyers are in a feeding frenzy. Piper was literally driven bankrupt by lawsuits--many of them groundless. For example, several years ago, three men died when their small Piper airplane hit heavy turbulence and crashed near Santa Barbara, California. Smelling big money, lawyers persuaded the families to take the company to court. But after six years of litigation, the court found Piper innocent of any wrongdoing. The lawsuit did nothing but prolong the grief of the surviving family members. And drive Piper a step closer to bankruptcy. The story is an example of a litigation explosion that is threatening the American economy. The costs include legal fees, damage awards, lost time, and higher insurance premiums. Before its decline, Piper Aircraft was spending $25 million a year just on lawsuits. Eventually, the threat of lawsuits scared away banks and investors. Piper had $100 million worth of back orders but couldn't get the capital to fill them. And Piper is not unique. Overall, America spends nearly 4 times as much on lawsuits as it spends on research and development for new products. Is it any wonder we're falling behind on the world market? The problem is not just the lawyers, it's that our legal system has built-in incentives to irresponsibility. America is one of the few countries where lawyers receive a large percentage of the money awarded in damages. That's a strong incentive to file outrageous claims in the hope of winning a jackpot. Consider the burglar who fell through a skylight while robbing a California school. Lawyers charged the school with negligence--and won $260,000 in damages. Then there's the Massachusetts man who stole a car from a parking lot, had an accident, and died. The man's estate sued the parking lot--for letting him steal the car. For lawyers, there's everything to gain and nothing to lose in these far-fetched claims. There's even a temptation to cook up false claims. Just last year, one of the largest law firms in the nation was indicted for falsifying cases. Its lawyers doctored photographs, bribed witnesses, and presented fake witnesses who had never been at the scene of the crime. They even manufactured evidence: When a client claimed he tripped in a parking lot, lawyers went out with a pick-axe and made the pothole bigger. Clearly, the problem cuts deeper than policy; it cuts to our nation's morality. A recent book called, The Litigation Explosion says the underlying problem is that "our law has ceased to attach moral significance to wrongful accusation." Wrongful accusation--does that ring a bell? It should. It's in the Ten Commandments. The Eighth Commandment, to be precise: You shall not bear false witness against your neighbor. If we want to reform our legal system, it's time to realize that law must be based on morality. The Ten Commandments are as relevant to modern society as they were 4,000 years ago. One the next program, I'll be talking about how the litigation explosion started. It's something America has to deal with quickly. Before we chase any more businesses--like Piper Aircraft--out of the country.

01/7/92