New Health Reform Legislation Slated for May.

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THE FACTS

U.S. Chamber CEO Donohue, 5/10/01: " Lawsuit abuse has created a

climate of fear with a chilling effect on new product creation and business

expansion. " _21_ (http://www.peopleoverprofits.org/chamber_footnotes.htm)

" Lawsuit abuse is a serious problem. " _22_

(http://www.peopleoverprofits.org/chamber_footnotes.htm)

A Recent Survey from the National Association of Manufacturers Suggests that

" Lawsuit Abuse " is Not a Top Concern for American Manufacturing Companies.

The National Association of Manufacturers recently released_23_

(http://www.peopleoverprofits.org/chamber_footnotes.htm) a survey of

manufacturers in

the United States showing that the " fear of litigation " ranked at the bottom of

their list of concerns:

" Please rate the following factors in terms of their negative impact on your

company's operations (with 1 representing the greatest negative impact and

10 the least). " _24_ (http://www.peopleoverprofits.org/chamber_footnotes.htm)

* 2.9 Cost of non-wage compensation

* 3.5 Cost of materials used in production

* 4.0 Inability to raise prices

* 4.1 Energy prices

* 5.0 Foreign competition

* 6.1 Taxes

* 6.3 Cost of wages

* 6.4 Shortage of qualified workers

* 7.4 Regulations/corporate governance rules (Sarbanes-Oxley)

* 7.8 Fear of litigation

A Survey from Business Week Magazine Suggests that " Lawsuit Abuse " is not a

Major Concern for Small Business Owners. According to a recent survey

published_25_ (http://www.peopleoverprofits.org/chamber_footnotes.htm) in

Business

Week magazine, owners of small and medium-sized businesses are generally not

concerned about the threat of lawsuits: " One of the survey's more surprising

results revealed that tort reform -- particularly limiting class-action

lawsuits -- is not a major priority. " The survey found that the biggest threats

to

their businesses are: (1) Rising inflation, 44 percent; (2) The trade

deficit and a weak dollar, 40 percent; (3) Energy shortages, 40 percent; (4)

Excessive household and/or corporate debt, 29 percent; (5) The growing federal

deficit, 28 percent; (6) Poorly prepared labor force/Shortage of skilled labor,

27 percent.

A Survey of Federal Judges Found that an " Overwhelming Majority " Don't See

" Frivolous Lawsuits " as Major Problem. According to survey by the Federal

Judicial Center - the research and education agency of the federal court system

-

most Federal judges do not view " frivolous lawsuits " as a problem:

" Frivolous litigation is not a major problem in the federal court system,

according to

an overwhelming majority of federal judges who participated in a recent

survey. The survey, conducted by the Federal Judicial Center, was based on the

responses of 278 federal district court judges. Seventy percent of the

respondents called groundless litigation either a 'small problem' or a 'very

small

problem,' and 15% said it was no problem at all. Only 1% called it a 'very

large problem,' 2% called it a 'large problem' and the rest rated it as a

'moderate problem' in their courts. ... In addition, 91% of the judges surveyed

opposed provisions in the Lawsuit Abuse Reduction Act, which won House approval

in the last Congress. " _26_

(http://www.peopleoverprofits.org/chamber_footnotes.htm)

Bush Administration Statistics Show that the Number of Federal Tort Trials

is Down Nearly 80 Percent Since 1985. Last year, the Bush Justice Department

reported that the number of tort (personal injury) cases resolved in U.S.

District Courts fell by 79 percent between 1985 and 2003. In 1985, 3,600 tort

trials were decided by a judge or jury in U.S. District Courts. By 2003, that

number had dropped to less than 800._27_ (http://w

ww.peopleoverprofits.org/chamber_footnotes.htm)

The Number of State Tort Trials is Decreasing. According to the most recent

statistics from the Bush administration's Bureau of Justice Statistics, the

number of tort trials at the state level has decreased. These statistics were

compiled as part of the Bureau's survey of state civil justice systems in the

nation's largest 75 counties. Among these counties, the number of tort

trials decreased 31.8% between 1992 and 2001._28_

(http://www.peopleoverprofits.org/chamber_footnotes.htm)

_Warn Friends About This Bogus Study_

(http://action.peopleoverprofits.org/tellafriend/)

IV. THE U.S. CHAMBER'S RHETORIC: " EXCESSIVE LITIGATION " RESULTS IN A " TORT

TAX " ON ALL AMERICANS

CHAMBER ATTACK THE FACTS U.S. Chamber CEO Donohue, 9/14/05: " Our

society is now coming to understand what the business community has known for

many years - that the litigation explosion in the United States represents a

punishing tax on all citizens. It stifles innovation and job creation. And it

has unfairly enriched a handful of lawyers while slowing the wheels of justice

for those who truly deserve relief and compensation. " _29_

(http://www.peopleoverprofits.org/chamber_footnotes.htm)

U.S. Chamber Used a Widely Discredited " Study " to Support Their Claims

Regarding the Costs of the Legal System; Business Week Called It a " Wild

Exaggeration. " To support their claims about the " cost " of the American legal

system,

the U.S. Chamber cites a study by the insurance industry-consulting firm_30_

(http://www.peopleoverprofits.org/chamber_footnotes.htm) , Tillinghast-Towers

Perrin (TTP). However, this study, which is updated annually, has been

widely discredited because it includes the cost of the insurance industry -

multimillion dollar salaries for insurance CEOs, rent on office buildings, and

administration overhead - in the " cost " of lawsuits. Business Week magazine

editorialized that the study " includes everything from payouts for

fender-benders

to the salaries of insurance industry CEOs. It's a wild exaggeration. " _31_

(http://www.peopleoverprofits.org/chamber_footnotes.htm)

* Congressional Quarterly Called Conclusions of TTP Study " sketchy at

best. " Congressional Quarterly Weekly magazine did an entire story describing

the evidence behind the figures cited by President Bush in his call for

legal restrictions " sketchy at best. " They examined the " tort tax " figure and

found, " Nearly all the assertions about the growing cost of the tort system are

based on the figures from just one actuarial and management consulting firm,

Tillinghast Towers-Perrin, that works for the insurance industry, which has a

stake in limiting lawsuits. ... The company's estimates of tort costs

include the insurance industry's administrative expenses and payments on claims

that never involve courts or lawyers, such as auto collisions. " _32_

(http://www.peopleoverprofits.org/chamber_footnotes.htm)

* TTP Admitted that Past Study Not a Reflection of the Tort System.

After being criticized for the methodology, TTP was forced to admit in their

2005 edition that " the costs tabulated in this study are not a reflection of

litigated claims or of the legal system. " _33_

(http://www.peopleoverprofits.org/chamber_footnotes.htm)

* The Study's Primary Author Said Study Used in a Misleading Way. Russ

Sutter, primary researcher for the study, admitted in 2005 that tort-reform

advocates use the data " in a way that's probably misleading. " _34_

(http://www.peopleoverprofits.org/chamber_footnotes.htm)

* Analysis of Past Studies Revealed Flawed Data. A May 2005 report_35_

(http://www.peopleoverprofits.org/chamber_footnotes.htm) from the Economic

Policy Institute (EPI), a nonprofit, nonpartisan think tank in Washington

D.C. revealed that TTP's reports are one-sided, exaggerating the impact of the

tort system and ignoring its benefits, and that evidence supporting them is

shaky or nonexistent. Claims that the tort system harms the U.S. economy do not

square with the data. In fact, there is a good deal of evidence to the

contrary. EPI's careful examination concludes that nearly half of the " costs "

of

the tort system described in the Tillinghast study are actually payments made

to from wrongdoers to injured people for lost wages, property damage, or

medical care - costs that are the result of injuries caused by the defendants

and would be borne by society one way or another, whether by government

programs or charities, or absorbed by the victims and their families.

* Wall Street Journal: New Version of TTP Study " Includes Payments

that Don't Involve the Legal System at All. " The Wall Street Journal previewed

the new version of the TTP report, and noted that it includes costs that are

not part of the legal system: " ...critics of past years' studies -- and there

are many -- say the number and the projections that come with it are deeply

flawed. For instance, they include payments that don't involve the legal

system at all. Say somebody smashes his car into the back of your new SUV and

his

insurance company sends you a $5,000 check to fix the damage. That gets

counted as a tort cost in Tillinghast's number. Critics say it's just a

transfer

payment from somebody who wasn't driving carefully to somebody who has been

legitimately wronged. How is that evidence of a system run amok? "