Great Flood Sinks Premise on Tort Reform

Damages from the Chicago flood run into the millions, and possibly billions, of dollars, yet the injured claimants could find their damages severely limited under proposed and existing tort reform measures.

A basement restaurant owner sues on behalf of all business entities for lost business, lost volume, lost property, payroll expenses, wages and other expenses as a result of being forced to close its operation due to the flood.

A department store sales clerk files a class-action lawsuit seeking recovery for lost wages, tips and commissions on behalf of herself and thousands of others.

An attorney here on business from New York sues after being forced to evacuate his hotel and find alternative lodgings. He, like others, was unable to conduct his business and alleges lost revenues, profits and goodwill.

Thus far, seven class-action lawsuits have been filed in state court here.

These plaintiffs suffered damages through no apparent fault of their own. Yet, would they have brought suit at all if tort reform measures capping their damages had been passed in Springfield or if their attorneys had not been allowed to take their cases on a contingency basis or if they had to pay the defendants' legal fees should they lose?

These are some of the measures that special interest business groups are pushing in this state and around the country through a well-oiled lobby aimed at curtailing plaintiffs' rights.

Some 30 bills dealing with tort reform are in various stages of review by the 87th General Assembly-proposals from capping damages to abolishing punitive recovery.

Members of the special interest groups are promoting their own agendas at the expense of innocent victims through these ill-advised changes.

Vice-president Dan Quayle leads the charge in this battle. In his fight to cut the cost and the delay of litigating civil cases, he raises the gauntlet of civil justice reform as the panacea.

But those who argue that the civil justice system cries out for drastic overhaul have not demonstrated that their proposals would work better. In fact, a number of independently conducted studies recently have found these proposals to be unworkable and unfair.

Perhaps one of the best testing grounds for the controversial measures can be found in Colorado, which enacted 68 such laws in six years, many of them during the 1990s insurance crisis atmosphere.

Colorado instituted the "loser pays" rule in the hope that it would discourage frivolous lawsuits, but it also discouraged legitimate but risky ones. Real victims are reluctant to bring cases that, although filed in good faith, are difficult to prove.

Colorado instituted its measures in the hope of lowering insurance premiums, but auto insurance, often the major cost for consumers, has actually become more expensive since the "reforms" were passed.

Great Britain and Ireland have similar experiences with reform. Nor have consumers felt any appreciable benefit in medical insurance premiums.

In the case of the Chicago flood, perhaps hundreds of lawsuits eventually will be filed against the City of Chicago and others in the aftermath. Likely, all will be consolidated into one case, where a main issue to be determined will be the immunity of the city from liability for "discretionary" acts.

But, given all the alleged blunders purportedly admitted to by some government workers, even the state's Tort Immunity Act, which grants additional liability protection to local governments, may be tested and stretched to the limits.

Property damage estimates soar into the billions of dollars now. Carrying the brunt of the financial exposure are the downtown building owners and their major tenants. Some carry flood insurance. Most do not carry business disruption insurance, and even if they do, we can expect widespread dissatisfaction with the claims-handling processes of some insurers.

The financial fallout of these lawsuits can be devastating to the city, already reeling from budgetary constraints. Even if the city is successful in dodging liability, legal fees alone may cause an increased burden on the taxpayer.

Instead, perhaps all parties in this instance should examine alternative dispute resolution techniques.

As early as possible in this litigation the parties should examine arbitration, mediation or even a moderated settlement, where the attorneys present their cases before a panel of impartial third parties who evaluate the cases and render advisory, nonbinding options for use in negotiations.

Robert A. Clifford is an attorney specializing in personal injury, aviation, medical malpractice and product liability law. He is the immediate past president of the Illinois Trial Lawyers' Assn.