After November our elected leaders will turn their attention to devising programs that will help improve the quality of life for people in Maryland.
Special attention will be paid to the state?s largest city, Baltimore. Most assuredly there will be proposals debated concerning public education, transportation and criminal justice. One issue which should receive great attention because of its profound effect on the residents of the city is tort reform.
Tort reform? “Why that?” you may ask. The reason, in essence, is this: Correcting the problems of our civil justice system, which is the goal of tort reform, is foremost an economic development issue.
Tort reform improves the business climate and stimulates job creation. For a great number of people living in Baltimore, the most important and effective “social program” that can be offered is a full-time job at a living wage. Thus, actions taken to improve the business climate in Baltimore will benefit all Marylanders.
The negative impacts of the current tort system have been documented by objective observers of the city for many years.
One example of the problem is the disproportionately high automobile insurance rates city residents pay compared to suburban residents. Several studies of the “hidden tax” on city residents conclude that the primary factor causing this rate disparity is that low income citizens are more likely to file lawsuits about minor car accidents than are wealthier citizens.
The perception is that people flock tothe tort system the way they do to a lottery, with more sanctions imposed on losing in the lottery than on losing a law suit. Residents of the city with good driving records and no history of filing law suits pay a premium on their insurance rates because of the overuse of the tort system by others.
The argument that auto insurance rates should be based on an individual?s driving record and not on his place of residence has been ignored, and the insurance industry has persuaded government officials not to require changes in its rate policy citing information about geographic disparities in the use of the tort system as evidence to retain the status quo.
Other examples of failures in the tort system relate to medical malpractice insurance costs (something of great concern to Baltimoreans since a hospital is the city?s largest private employer), asbestos and lead paint poisoning cases.
Regarding the latter, no reasonable person would argue against imposing liability on someone who invites people to live or work in a hazardous environment after that person has been made aware of the hazard and instructed to eliminate the hazard.
However, it does seem unreasonable to impose liability on someone who has no knowledge that a hazardous environment has been created by products which the government instructed him to use in construction work or living environments. Unfortunately, the current tort system permits such lawsuits.
Although the Maryland legislature has attempted to address problems in the tort system relating to some of these discrete issues (for example, lead paint, medical malpractice and auto insurance rates), what is required is a more comprehensive approach to repairing the civil justice system.
Each state has unique problems, but it would be worthwhile for Marylanders to consider the major overhaul of the tort system that occurred in Mississippi in 2004. After years of discussionabout the inefficiencies, the slowness and the complexities of the tort system, elected officials produced legislation that had the effect of achieving tort reform without denying a legitimate claimant a reasonable and adequate remedy.
The bottom line is this: Businesses in high litigation areas raise prices, invest less and expand jobs less than they do in other areas. That is a description of an economic playing field that job creators want to avoid.
The good news for Baltimore is that the economic playing field can be leveled, and one major step toward doing so is through tort reform.
Kurt L. Schmoke is dean of the Howard University School of Law. A partner in the international law firm of Wilmer, Cutler and Pickering, Schmoke served as the mayor of Baltimore City for 12 years, from 1987 to 1999, and was the
