Throughout the recent political campaigns, there has been a great deal talk regarding reform of our legal system. Some of this talk has been constructive; some of it has been false. This month’s column focuses on some of the myths and legends often proposed by both sides.

Q. I read somewhere that lawsuits in Texas are out of control. Doesn’t this stifle business’ ability to grow?

A. First, Texas has seen a dramatic decrease in case filings since the early 1990s, when many reforms were adopted here. Since then, the legislature has reformed the system in one way or another each cycle. This is good or bad depending upon your viewpoint. Fewer suits may just mean that aggrieved people are being denied justice.

Q. What about the business climate?

A. All of the data collected regarding this issue indicates that businesses file more lawsuits than the individuals. Though some problems in the system exist, it is designed to favor the litigant who deserves justice. Our system can not merely exist to repair the wrongs committed against business, it is in place for the individual as well.

Q. I heard about the verdict in the McDonald’s case; $2.9 Million seems excessive to me?

A. When we hear about verdicts in the press, we are quick to second guess the verdict. This is a dangerous practice because we are rarely given all of the facts. For instance, the woman in the case you cite suffered third degree burns that required skin grafts to repair. The coffee she was given was 185 degrees, 45 degrees warmer than most restaurants. McDonalds had received 700 claims in the past for coffee that was too hot but they failed to make a change as they believed that hotter coffee saved dollars as it took longer for it to spoil.

Q. Still, that seems like a lot of money?

A. The plaintiff in that case offered to settle before trial for the amount of $20,000. The defendant refused her offer.

Q. None of that information was given to me when I heard about the case.

A. A newspaper article or news story does not have the space to elaborate on a case’s details. As a result, we have to rely upon a jury’s verdict to give us the final truth. We trust juries to sentence a man to death. They are more than capable of sorting out frivolous lawsuits from those that have merit.

Q. What did the lady do with the money McDonald had to pay her?

A. I don’t know that answer to that question but I can tell you that she only received $640,000 after the verdict was substantially reduced on appeal. Though that may seem like a lot of money, several studies have been conducted that find the award still makes McDonald’s decisions to serve coffee that hot very profitable – even after the reduced jury award was paid.

Q. Still, why should she get that money if the award is designed to serve the public good?

A. There are two options to checking the profit motive in business. The first option would be to multiply government budgets many times, along with taxes of course, and hire the inspectors needed to fine and regulate business. When a consumer had a complaint that caused him physical injury, he could complain to the government who would pursue the wrongdoer, leaving the wronged to pay his own medical bills. The other option, which our founders sought to develop, is to allow private litigants to pursue the wrongdoers in court. Should their claim have merit, the jury will deliver punishment. The second method leads to smaller government and taxes and arguably provides society with a better business environment.

Q. Hasn’t the legal system and lawyers gotten too expensive to efficiently deliver justice to any side?

A. Absolutely. However, there are many ways to address this growing problem. One option, the one we have been taking for a few years now, involves reducing the number of lawsuits regardless of their merits. Along with these reforms, new steps have been added to the litigation process. For the defendant, this means higher attorneys fees paid to the hourly lawyers. In fact, many of the reforms offered are supported by the defense bar. Some believe this is due to the fact that the reforms drive up the number of hours require for each case, thus driving up the attorneys fees paid.

Q. What are some of the solutions to this problem?

A. First, some have proposed changes to the hourly fee system. Most of us however, do not believe government should decide how private parties contract. On the other hand, defendants can vote with their dollars and start hiring their lawyers on a fixed price for the lawsuit, for example. This would discourage lawyers from filing frivolous pleadings and thus, wasting precious court time. This would also allow business to calculate their total potential loss on a claim.

Q. What about behavior limiting the actions of plaintiffs lawyers?

A. First, plaintiffs are discouraged from filing frivolous claims because they are usually only paid if their client wins and they also are paying all of the costs. Thus, unless the case has merit, a lawyer will not waste her money or time on the matter. Also, because the plaintiff’s lawyer does not receive an hourly pay, she is discouraged from filing frivolous pleadings or motions.

Q. What about the fees received by the plaintiffs lawyers, don’t they get as much as 40%?

A. Many times they do and it is sometimes a problem. Plaintiffs lawyers who have contingent arraignments with their clients pay the expenses of the case and they front their time without getting immediately paid. This makes the Plaintiff’s lawyer both the client’s lawyer and his banker. The lawyer is looking for a return on his investment. Because the lawyer can not know all of the facts to a case when it comes in his door, the lawyer may loose his time and money if it turns out the case does not have merit. How many bankers would loan thousands or tens of thousands of dollars to a complete stranger without a credit check and without a promissory note guaranteeing repayment? Those that would, would do so only at an enormous interest rate. Part of the plaintiff’s lawyer’s fee goes to pay back this money with interest.

Q. Still 40% seems high?

A. It is too high on the numerous cases that are settled shortly after the claims are made. Though many attorneys voluntarily reduce their fee, it is not common. Some reform is needed here but no great ideas have developed. One of the concerns at play is that plaintiff’s lawyers need windfall profits in some cases in order to pursue the next clients’ case. Though it may seem unfair for one client to pay for another’s justice, the alternative is massive government regulation or deadly, unsafe products and business practices.

Q. Still, I am not comfortable with the million dollar lawyers you see on TV. What can be done about it?

A. For every one of those lawyers, there are thousands who make well below the average of other professionals such as accountants, architects, engineers and, especially, doctors. On both sides of the bar, there are great lawyers who scrape out a living each year while pouring their profits back into cases for their clients or for their pro bono activities. Lawyers, like all other professions, have some very wealthy members but this number is very small.

Q. What about the disgusting advertising we see. Can’t something be done about it?

A. Yes, and the State Bar has proposed a rule change that will be the topic of discussion next month.