The Societal Cost of Frivolous Lawsuits

How is it that a dry cleaning store could be sued for $54 million in damages for temporarily misplaced pants?  How could a jury award $2.86 million to a woman who burned herself with hot coffee?  Often times we hear about extreme versions of frivolous lawsuits and abuses of the legal system without realizing the impact of frivolous lawsuits on all members of society. The cost of defending lawsuits is a major drain on the U.S. economy, totaling billions of dollars each year. As a result, civil justice reform is not only a critical issue for Dow, but for American business as a whole. 

What is Civil Justice Reform?
A civil justice system is a fundamental pillar of democracy.  It provides the right to claim compensation to those who have been harmed by the actions of others, while allowing those who have been sued a full and fair right to defend against the claims.  Unfortunately, the courts are distracted from their legitimate business by frivolous lawsuits brought by plaintiffs’ lawyers whose clients have not suffered legitimate harm, or who are demanding compensation that is out of proportion to their client’s injuries.  Cases like these greatly diminish the efficacy of the judicial process.   Civil justice reform efforts attempt to provide balance to correct current abuses of the legal system.

Why is Civil Justice Reform Important?
Like many manufacturing companies, Dow is a target of litigation.  The effects of inequities in the legal system are most often felt in the U.S.  The vast majority of pending lawsuits against Dow are in the United States, and they are concentrated in fewer than ten states that are often “magnet” jurisdictions because of their especially permissive systems.  Some of the permissive features of the U.S, system that can create imbalance include, but are not limited to: liberal discovery rules, high damage awards, punitive damages, class actions and contingency fee arrangements. 

A key issue for Dow and many other companies has been the proliferation of asbestos litigation.  Asbestos litigation had forced eighty companies into bankruptcy and put up to 60,000 people out of work, costing workers and their families up to $200 million in wages. Recently, when some diligent judges questioned the thousands of lawsuits that were flooding the courts, they found a widespread pattern of false medical findings. These judges sounded the alarm and helped curb this form of abuse.

What Can You Do to Support Civil Justice Reform?

Every day, judges and legislators make decisions about the rights of citizens that can affect our jobs, health care, safety, loss of freedom, property and other wealth.  The Chamber of Commerce’s Institute for Legal Reform, of which Dow is a member, has developed website highlighting the faces of lawsuit abuse.  Visit www.facesoflawsuitabuse.org to learn more. Then, assert your right to engage in the debate by discovering the elements and issues that touch your life, your community and Dow.