Tort Reform Could Work By Stephen Bainbridge

Or so one infers from the WSJ($)’s report on tort reform in Ireland:

“A new arbitration body in Dublin now reviews personal and employers’ liability claims — including motor, workplace, and other accidents but not medical malpractice cases — before they get to court. This initial process is a lawyer-free zone. Attorneys are not permitted to handle the claim for plaintiffs, who deal directly with the panel, known as the Personal Injury Assessment Board. (Plaintiffs can hire a lawyer for consultation, however).

The panel’s role is striking, given that Ireland is one of the most densely lawyered nations, with one attorney for every 369 people. That outstrips even the U.S., which has one lawyer per 421 people, according to the U.S. Bureau of Labor Statistics.

But the no-lawyers mandate isn’t the only change. Guidelines on award amounts aim to stem inflation in payouts. Legal costs cannot be added to settlements — plaintiffs pay lawyers from any money they receive. Law firms are banned from advertising a promise that plaintiffs don’t incur any costs if their case isn’t won. Another law requires plaintiffs to make claims under affidavit, and imposes sentences for false evidence of up to 10 years in prison or a €100,000 ($130,000) fine.”

And the payoff?

“The number of personal injury claims dropped 20% in Ireland last year, according to the Irish Law Society. Liability insurance rates for government and private employers have also dropped substantially, down about 40% last year alone, according to the Central Statistics Office. Auto insurance premiums are back at 1999 levels.”

By the way, do you know what the Irish call personal injury litigation?

“The American Disease.”

Content used with permission of Stephen Bainbridge from ProfessorBainbridge. You can read more of his work by clicking here.

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