Philadelphia still in need of tort reform The Pa. legislature and city courts have slowly embraced change. But businesses steer clear of the litigation climate.

Posted: November 18, 2012

James R. Copland

is the director of the Center for Legal Policy at the Manhattan Institute and primary author of the new report "Trial Lawyers, Inc. Update: Philadelphia"

Philadelphia has earned a reputation as the nation's most notorious "magnet court" for tort lawsuits. But where "Trial Lawyers Inc." thrives, businesses flee. Seventy percent of corporate executives say that decisions on where to locate a business depend on the litigation climate. In 2011, Philadelphia's economy grew just 0.3 percent, only one-quarter the nationwide growth rate.

That climate has been good for lawyers, though. The city's Complex Litigation Center (CLC), which manages lawsuits alleging product-related injuries, has seen its docket skyrocket: Over the last five years, the active caseload of asbestos and pharmaceutical lawsuits has grown 143 percent, from 2,542 to 6,174.

This growth is not because of an increased number of product-related injuries in Philadelphia. Rather, lawsuits from around the country are making their way in. By the end of 2011, 47 percent of lawsuits in the CLC were from out of state. Only 13 percent of these cases originated in Philadelphia itself.

Lawyers have shipped cases into Philadelphia because they make more money there. Philadelphia's juries award significantly more million-dollar awards than are the norm elsewhere in the country, and the CLC's "rocket docket" case processing ensures that defendants have limited time to prepare. Until recently, the CLC actually had juries decide damages in cases before determining if defendants were liable, an "innovation" shown to drive up tort awards.

Fortunately, both the state legislature and the city courts have taken steps toward reform. In June 2011, the legislature passed the Fair Share Act, which prevents plaintiffs' attorneys from hitting up minimally responsible but deep-pocketed defendants for all their clients' injuries. And, last November, Judge John Herron assumed leadership of Philadelphia's Court of Common Pleas and shortly thereafter ended the practice of trying damages before liability, as well as limiting out-of-state attorneys' cases to two annually, among other positive reforms.

Though CLC caseloads remain high, the number of new cases filed to date is 60 percent below that in 2011. Unfortunately, such progress may be short-lived. This summer, under pressure from plaintiffs' attorneys, Herron amended some of his reforms.

Rather than relying on local judges, the state legislature can act on modifying the commonwealth's loose venue rules. Reform could be modeled on the state's successful 2002 medical-malpractice law, which dramatically cut med-mal filings in Philadelphia relative to the rest of the state.

Reform will not come easy, especially given the amount of support lawmakers receive from lawyer-lobby groups. For example, State Sen. Stewart Greenleaf (R., Montgomery), chairman of the Judiciary Committee, received 35 percent of his campaign funds from such groups, including more than $115,000 from the Philadelphia Trial Lawyers Association.

But comprehensive reform is still needed. It would lock in recent improvements in Philadelphia and help attract businesses, greatly benefiting the 10 percent of city residents who are unemployed and the 27 percent mired in poverty.


To read the "Trial Lawyers" report, visit www.triallawyersinc.com/

updates/tli_update_pa_1012.html.

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