- The Washington Times - Saturday, November 1, 2008

As presidential candidates discussed how to cure the ailing economy last week, Commerce Secretary Carlos M. Gutierrez warned about what lawyers are doing to it in their quest for damage claims and legal fees.

Lawsuits are costing the U.S. economy and businesses nearly $300 billion a year, or 2 percent of the gross domestic product, Mr. Gutierrez said Wednesday at the U.S. Chamber of Commerce’s Legal Reform Summit in Washington.

“That’s huge,” he said.

A Chamber of Commerce study found that 46 percent of small businesses have been sued or threatened with lawsuits. Each lawsuit cost an average of $5,000 for small businesses, few of which can afford the expense.

“These costs often get passed on to American families,” Mr. Gutierrez said.

The Chamber of Commerce has called for legislative curbs on lawsuit abuse, or tort reform, for years. The difference now is that presidential candidates John McCain and Barack Obama have added their voices to complaints about how lawsuits have gone too far.

Both candidates voted for the Class Action Fairness Act, a 2005 law that limits attorneys’ fees in class-action suits and shifts all such cases from state courts to federal courts. The latter measure prevents lawyers from “forum shopping,” or searching for a state with the laws most favorable to awarding large amounts of money in damages.

Read all articles from The Washington Times’ 2008 Voter Issues series.

Business groups tend to support Mr. McCain’s proposals on lawsuit abuse more than Mr. Obama’s ideas.

“When it comes to issues of legal reform, McCain is stronger on those issues,” said Lisa A. Rickard, president of the Chamber’s Institute for Legal Reform.

In addition to sponsoring the Class Action Fairness Act, Mr. McCain voted for a bill to cap the damages that gynecologists and obstetricians must pay in medical malpractice lawsuits.

He also supported legislation to cap noneconomic and punitive damages in medical malpractice cases, and he voted in favor of a bill to bar lawsuits against manufacturers, dealers and importers of firearms.

However, he voted for a “Patients’ Bill of Rights” that led to more lawsuits against medical personnel accused of violating the privacy of patients or failing to keep them informed about health care options.

Mr. McCain’s 2008 campaign Web site does not specifically list lawsuit abuse as one of social ills he hopes to cure, but it does discuss his desire to support businesses.

In the 2000 presidential election, when Mr. McCain ran unsuccessfully against George W. Bush in the Republican primaries, his Web site said, “John McCain has and will continue to fight to reform our nation’s product liability laws. He supports reforms that would establish a time limit on liability for most products and cap damages on small businesses. He has also worked to provide liability relief to small businesses by sponsoring legislation that limits punitive damages and eliminates joint liability for noneconomic damages for small businesses that employ less than 25 people.”

For his part, Mr. Obama mentioned his support for the Class Action Fairness Act during the final presidential debate last month.

“First of all, in terms of standing up to the leaders of my party, the first major bill I voted on in the Senate was in support of tort reform, which wasn’t very popular with the trial lawyers, a major constituency in the Democratic Party,” Mr. Obama said.

His record on tort reform consists more of statements in favor of it than votes on the issue, compared with Mr. McCain, who has had a much longer legislative career.

While he ran for the Senate in Illinois earlier in his career, Mr. Obama said, “Anyone who denies there’s a crisis with medical malpractice is probably a trial lawyer.”

He co-authored an article with Hillary Rodham Clinton in the May 25, 2006, edition of the New England Journal of Medicine that advocated medical malpractice lawsuit reform but tied it to new measures to ensure fewer medical errors.

He co-sponsored with Mrs. Clinton the National Medical Error Disclosure and Compensation Act of 2005. It would have required hospitals to disclose medical errors to patients and would have granted doctors liability protections if they promptly disclosed their own errors.

Congress never approved the bill.

As with Mr. McCain, the Web site for the Obama campaign says nothing explicit about lawsuit abuse.

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