Pennsylvania trial lawyers, business groups square off over lawsuit reform

Trial lawyer Gerald McHugh Jr. likes to explain the battle over lawsuit reform now playing out in Harrisburg by using the story of a childhood rock-throwing incident that ended with his neighbor's smashed window.

The woman who owned the house knew McHugh's parents and called to complain. At dinner that evening in the McHugh family's West Philadelphia home, his parents read him the riot act: He would pay for the window, even though he had not thrown the rock that broke it. He and his friends could sort out who actually was responsible and how costs might be shared.

"My parents resolved that case quickly and surely," McHugh said. "I had participated, it was wrong, and therefore I was paying for a new window."

McHugh, a lawyer with the Philadelphia trial and appellate firm of Raynes McCarty, said the anecdote showed in the simplest of terms why the Pennsylvania Senate should vote down a proposal that would end the long-standing practice of requiring some defendants to pay full civil-damages awards, even though they might have minimal responsibility.

McHugh has become a leading spokesman for Pennsylvania trial lawyers, who believe the changes would serve businesses, physicians, hospitals, and other institutions at the expense of aggrieved customers.

This so-called doctrine of "joint-and-several liability" traditionally has undergirded civil litigation in state courts throughout the country. It has been defended by trial lawyers and other proponents who say it improves the odds for accident victims to gain fair compensation.

If one defendant does not have enough money or is judgment proof, it stands to reason that an accident victim should seek compensation from another defendant, even though that defendant may have only minimal responsibility, trial lawyers contend.

McHugh's personal story of the childhood rock-throwing incident sounds folksy, but it rings hollow to businesses, physicians, and many health-care institutions that say the current legal doctrine is a green light for trial lawyers and plaintiffs to seek out the deepest pockets.

The businesses have been pushing legislation, passed by the state House of Representatives on April 11, that would end the practice for any defendant found to have less than 60 percent responsibility. The bill, which has been praised by Gov. Corbett, a Republican, now is in the Senate, which is expected to deal with the issue before lawmakers leave for summer recess.

"The long-standing legal rule of 'joint and several' has been grossly distorted by greed and, in many cases, has become nothing more than a search by personal-injury lawyers for defendants whose only real reason for being named in a lawsuit is their ability to pay," said Gene Barr, vice president of the Pennsylvania Chamber of Business and Industry."

Under the bill passed by the House, sponsored by State Rep. Curt Schroder (R., Chester), a defendant who is less than 60 percent responsible would have to pay only a proportional share of a damage award. Exceptions include cases in which the defendant intended to cause harm, engaged in intentional misrepresentation, or engaged in activity that resulted in the release of hazardous substances.

While Corbett earlier this week praised the House for passing the bill, called the Fair Share Act, it faces stiff opposition from the state's politically powerful trial lawyers and many Democrats who see the measure as a favor to big businesses, physicians, and hospitals at the expense of accident victims.

"The effect, if it becomes law, is that injured victims will not be able to recover the full damages awarded to them in a court of law if they are victims of sexual assault, rogue judges, greedy gas drillers who damage the environment, and other wrongdoers," said Bill Patton, spokesman for Rep. Frank Dermody (D., Allegheny), the House Democratic leader.

But with both chambers of the legislature and the governor's office controlled by Republicans, who traditionally favor lawsuit restrictions, opponents of the bill face difficult odds. According to legislative sources, one approach they are considering is suggesting some modified version of "joint-and-several" liability, where defendants with the greatest ability to pay would still face paying a disproportionate amount, but not so much as before.

The battle playing out in Harrisburg is a mirror image of legislative confrontations and judicial elections that have been fought over lawsuit reform nationwide. Business groups have been aggressive in supporting judicial candidates who take a more restrictive approach to litigation, and have pushed bills in state capitals making it harder to sue. Dozens of states have eliminated joint-and-several liability and instituted other curbs on lawsuits.

In Pennsylvania, and nationally, business groups say excessive litigation costs are a drag on the economy, diverting precious resources from business development and job creation.

The Pennsylvania Chamber of Business and Industry points to a 2008 study by consultant Towers Perrin that concludes the U.S. tort system cost $252 billion in 2007, or $835 per person.

The study's authors qualified their work, noting they had made no effort to quantify potential benefits from lawsuits, such as the added incentive for manufacturers to make safer products rather than confront litigation.

Business and their lawyers do not see it that way, of course. Mitch Goldman, a lawyer at Duane Morris L.L.P. who specializes in health care, said a hospital client of his faces potential ruin because of the joint-and-several rule.

The hospital, which he declined to identify, is embroiled in litigation over a medical-malpractice case - in which, he said, it had only minimal involvement. But, he said, if the hospital went to trial and lost, it would be stuck with a huge bill. As a result, it probably will settle.

"The hospital in almost every one of these cases will be the deepest pocket," he said.