Civil Litigation by the Numbers: The Truth Insurance Companies Don’t Want You to Know About of “Runaway Juries” and “Frivolous Lawsuits”

By: Jacob W. Gent, Attorney at Law

Proponents of tort reform and mandatory caps on damage awards (insurance companies and their lobbyists) frequently claim that the civil justice system in the United States is broken as a result of abuse by individuals filing frivolous lawsuits and “runaway jury verdicts” which unfairly award undeserving plaintiffs and unfairly punishes defendants with huge verdicts.

Several organizations, including the National Center for State Courts (NCSC), have studied actual court case results to see if there is any merit in the “too many frivolous lawsuits” campaign.  The NCSC is an independent, nonprofit court improvement organization founded at the urging of former Chief Justice of US Supreme Court Warren E. Burger.  All of its services, including research, information services, education, and consulting, are focused on helping courts plan, make decisions, and implement improvements that save time and money, while ensuring judicial administration that supports fair and impartial decision-making.

Personal injury-type cases, also known as tort cases actually represent just a small percentage of the court’s civil caseload.

According to recent NCSC data in 2014 that assessed case load in 26 states, “tort cases” (cases in which an injured person seeks recovery of damages against a negligent party) represented less than 3% of the total civil caseload in 13 states; 3-5% of the total civil load in 8 states and 5-8.2% of the total civil caseload in 5 states.[1]  These rates were consistent with NCSC data over the previous two years.[2]  Data from November, 2015 suggests that tort cases represent only 7% of all civil cases nationally.[3]

Another surprising piece of data that up-ends the claim of too many personal injury lawsuits getting filed in court is that  medical malpractice and product liability cases, while receiving a  great deal of media attention, only comprise less than 1% of the total civil caseload.[4]  Contract and small claims cases make up approximately 80% of civil dockets.[5]  More specifically, nearly two-thirds of civil cased filed are contract disputes, which include debt collection (37%), landlord/tenant disputes (29%), and foreclosure cases (17%).  Sixteen percent of civil cases filed were small claims cases involving disputes valued at $12,000 or less, with 9% of filed cases characterized as “other civil” cases involving agency appeals, domestic or minor criminal-related cases.[6]

As stated in the NCSC report, “The picture of contemporary litigation that emerges… is very different from the one suggested in debates about the contemporary civil justice system.  State court caseloads are dominated by lower-value contract and small claims cases rather than high-value commercial and tort cases.”[7]

The number of filed tort cases is actually going down.

Contract litigation rose 63% in 13 states reporting between 1999 and 2008.  During that same period, tort filings decreased by 25%.[8]  From 2005 to 2010, “current caseloads increased 52% (10.5% per annum), much of it occurring in 2008 with the onset of the recession,” due to foreclosure and debt collection actions in 9 states reporting.  Between 2001 and 2010, incoming contract cases jumped 65% in those same states.  Further, there was a 22% increase in contract cases in those 9 states between 2007 and 2008.[9]

Contrary to the proponents of tort reform from the insurance industry, very few Americans injured by the negligence of others actually file lawsuits.  A study by the Rand Institute for Civil Justice found only 10% of injured Americans ever file a claim for compensation, including insurance claims and informal demands.  Only 2% actually file lawsuits.[10]

The overwhelming majority of tort cases are not resolved by juries.

The percentage of tort cases resolved by jury trial is extremely low.  According to the NCSC data from 2014 the tort jury trial rate was less than 2% in ten states; 2-3% in 5 states; and 4.3% in one state reporting.[11]  “Only 15% of tort claims were disposed by judgment compared to 65% of small claims, 56% of contract cases, 45% of real property cases, and 32% of other civil cases.”[12]  A 2009 study by the U.S. Department of Justice found the number of tort trials concluded in state courts in the nation’s most populous counties decreased by 31.5% between 1996 and 2005, with product liability cases showing the largest decline at 46.7%.[13]

Privatization of the civil justice system through the use of mandatory mediation and/or arbitration clauses embedded in most insurance policies, as well as other routine consumer and commercial contracts has contributed to the dramatic decline in the frequency of civil bench and jury trials.[14]  As a result of this trend, there is an increasing lack of jury trial experience among trial attorneys and state court trial judges.

It is difficult for victims to prevail in tort cases and the majority of awards are very modest.

According to the NCSC, the “monetary value of cases disposed in state courts is quite modest” with 75% of tort judgments reviewed under $12,200.  “Despite widespread perceptions that civil litigation involves high-value commercial and tort cases, only 357 cases (0.2%) had judgments that exceeded $500,000 and only 165 cases (less than 0.1%) had judgments that exceeded $1 million.  Instead, three-quarters (75%) of all judgments were less than $5,200.” The NCSC also found that “compared to a mean jury award of $2 million in tort cases, 50% of jury awards in tort cases were $30,000 or less, and 75% of jury awards in tort cases were less than $152,000.  Jury awards exceeded $500,000 in only 17 cases (3% of cases in which judgment exceed zero), and exceeded $1million in only 13 cases (2%).”[15]

A study by the Department of Justice found plaintiffs in tort actions prevailed in 51.3% of the time in a jury trial, and 56.2% of the time in a bench trial.[16]  Furthermore, compensatory damage awards were reduced in 15% of tort trials, with award amounts reduced by 40% on average.[17]  A study of post-trial activity for a sample of verdicts in California and New York found that “both settlement and appeal are more common in cases with larger jury verdicts” and “often lead to substantial reductions in the amount defendants ultimately pay to plaintiffs.”[18]

As part of the mission of Adler ♦ Giersch ps we strive to promote public awareness of insurance and legal issues affecting those who have been injured by the negligence of others.  Please do not hesitate to contact us if you or someone you know has questions about their personal injury claim.

 


[1] National Center for State Courts, “2014 Civil Caseloads-Trial Courts: 2014 Statewide Tort Caseloads and Rates,” www.ncsc.org/Sitecore/Content/Microsites/PopUp/Home?CSP/CSP-Civil.

[2] See National Center for State Courts, “2013 Civil Caseloads-Trial Courts: 2013 Statewide Tort Caseloads and Rates,” National Center for State Courts, “2012 Civil Caseloads-Trial Courts: 2013 Statewide Tort Caseloads and Rates,” www.ncsc.org/Sitecore/Content/Microsites/PopUp/Home?CSP/CSP-Civil.

[3] National Center for State Courts, The Landscape of Civil Litigation in State Courts (November 2015), www.ncsc.org/~/media/Files/pdf/research/CivilJusticeReports-2015.ashx.

[4] Id.

[5] Id.

[6] Id.

[7] Id.

[8] Robert C. LaFountain and Cynthia G. Lee, “Medical Malpractice Litigation in State Courts” (April 2011)

[9] National Center for State Courts, “Contract Caseloads Climb for Fifth Consecutive Year,” www.courtstatistics.org/Civil/2012W4CIVIL.aspx.

[10] Rand Institute for Civil Justice, Compensation for Accidental Injuries in the United States (1991).

[11] National Center for State Courts, “2014 Civil Caseloads-Trial Courts: 2014 Tort Jury Trials and Rates,” www.ncsc.org/Sitecore/Content/Microsites/PopUp/Home?CSP/CSP-Civil.

[12] National Center for State Courts, The Landscape of Civil Litigation in State Courts (November 2015).

[13] U.S. Department of Justice, Bureau of Justice Statistics, “Tort Bench and Jury Trials in State Courts, 2005,” NCJ 228129 (November 2009), http://bjs.ojp.usdoj.gov/content/pub/pdf/tbjtsc05.pdf.

[14] National Center for State Courts, The Landscape of Civil Litigation in State Courts (November 2015).

[15] Id.

[16] U.S. Department of Justice, Bureau of Justice Statistics, “Tort Bench and Jury Trials in State Courts, 2005,” NCJ 228129 (November 2009).

[17] Id.

[18] Seth A. Seabury, “Case Selection after the Trial: A Study of Post-Trial Settlement and Appeal,” RAND Working Paper No. WR-638-ICJ (May 2009).