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Case filings and "Reform"

        In an incredible display of audacity, the Chamber of Commerce continued its war on victims' rights by asking the legislature for additional legal reforms in Michigan.  It falsely claimed that "forty percent fees" are "often" charged by attorneys, even though attorneys in Michigan are limited by law to charging a maximum one-third fee in contingent fee cases.  The Michigan Chamber must have been too lazy to investigate and simply dropped this line from the Chamber's national lobbying campaign into the Michigan literature.

          The Chamber suggested that Michigan needs contingent fee reform to protect Michigan from "frivolous cases" without documenting that frivolous cases are occurring or explaining why a limit on fees in meritorious cases would have an impact on the filing of frivolous cases.  Clearly, the Chamber has become so brazen that it no longer believes itself subject to normal rules of reasoned discourse or logic.  The Chamber also asked for "additional sanctions" for pursuing frivolous claims, but failed to mention that Michigan currently has one statute, three Court Rules and one rule of Professional Ethics which all ban and punish frivolous claims and which can lead to payment of costs, sanctions and fees by lawyers or litigants or to discipline by the courts or the State Bar.

          The Chamber suggests that too many cases are being filed, without citing the actual numbers.  Even a glance at the actual numbers will demonstrate that Michigan's role in the Chamber's national campaign is absurd and incredibly cynical.  For example, while there were 1,925 medical malpractice filings in MIchigan in 1983, and 3,629 in 1986 as legislative reforms were being implemented, only 931 cases were filed in Michigan in 2006. Michigan has averaged fewer than 100 malpractice trials per year for the years 2002 through 2006, and Michigan ranks in the bottom eight to 14 states nationally, for the median payout on malpractice claims.  In the year 2000, for example, insurers paid compensation on only 300 malpractice cases in Michigan, total.

          While the population of doctors and patients has increased substantially during this twenty years, the number of filings has been reduced by at least fifty percent, and compared with 1986 by 75 percent.  By any measure, if filings are down from 3600 to 900, the number of "frivolous filings" is no longer a problem--if it ever was.  (See Michigan Lawyers Weekly, June 25, 2007 21 Mich L.W. 940, pp. 1, 32)  These arguments have become so brazen and so detached from reality that the Michigan Defense Trial Counsel organization has joined the State Bar in repudiating the Chamber's claims.  When the organization that is directly compensated for representing your interests no longer supports your arguments, it should be an indication that you are departing from reality.  As both of these organizations explained, the Chambers claims are entirely divorced from the actual practice of law in Michigan and are clearly politically oriented:  we already have a form of "loser pays" which the Chamber is apparently unaware of; we already have two mandatory forms of settlement-inducement procedure which the Chamber ignores; there are no frivolous claims any longer; and by the Chamber's own numbers, only 19 percent of the total recovery is normally paid to Michigan lawyers--not the "forty percent" it hypes. 

        The Lawyers Weekly also made another interesting observation.  It noted that while medical malpractice reform was touted as a means of bringing physicians to Michigan, in fact, as the number of claims has come down, the increase in the number of doctors practicing in Michigan has trended downward over the two decades of "reform".  In fact, liability is only one small factor in physicians' choice of geographic location--and for the past ten years physicans have increasingly gone elsewhere despite Michigan's relatively attractive liability climate.

          By the way, even the Chamber had to admit that reducing the number of malpractice claims by between fifty and seventy-five percent didn't reduce malpractice premiums:  it claimed that as a result, premiums "stabilized".    One wonders by what percentage we would have to reduce lawsuits for the insureds to reap an actual savings in liability premiums if 75 percent wasn't enough?

          In truth, this is simply a cynical effort to trash what was the best and most consumer-oriented legal system in the world.  By making scapegoats of lawyers and courts, the Chamber can continue to assure high corporate profits.  Compare these statistics with the recently released record Michigan insurance profits discussed elsewhere in our weblog.

Thompson O’Neil, P.C.
309 East Front Street
Traverse City, Michigan 49684
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