- New Zealand is the new home of capitalism.
- They speak English in New Zealand.
- Fat nurses unwelcome in New Zealand. Gotta love that! Helloooooooo Nurse!
- How about Miss New Zealand? (at right)
- And now: Tort Reform!
Actually, this is not news. Tort law was eliminated forty years ago in New Zealand. Peter Schuck at Yale wrote a great description of the Kiwi replacement for tort law -- it is worth quoting from at length:
When ordinary Americans think of New Zealand (which is hardly at all), they probably envision the breathtaking mountains, glaciers, and lakes panoramically depicted in the film version of Lord of the Rings. For legal scholars, however, it is radical tort reform that distinguishes New Zealand.
Sounds over-the-top and all... but no:
New Zealand, after all, essentially abolished tort law more than three decades ago, and its people seem quite happy with the result. In stark contrast, the American tort system continues to expand and flourish, while representing (depending on whom you ask) the essence of popular justice or a symbol of all that is wrong with our law.
At this point, I'd like to pause and point out a few famous tort lawyers:
- John Edwards: Ann Coulter has a good summary of his tort law experience. Go read it if you haven't already.
- Texas attorney Reed Morgan. Not familiar? You know him by his other name: the McDonalds Coffee Crotch Burn Attorney. (In all fairness to Reed, he did attempt to settle for far less than his client eventually received. It is the system that is screwed up.)
- Erin Brockovich (Ok, technically not an attorney.)
- Every attorney that made partner in his firm by getting you a coupon from a class action settlement. Here’s but one infamous case: In a settlement of a class-action suit against Blockbuster, plaintiff attorneys received $9.25 million while each class-action member received two coupons for movie rentals and one $1 off coupon. The case was about late movie return charges.
- Every lawyer in a story over at overlawyered.com.
Sure, these are champions of the people. The champion of the little guy. They make a living suing the deep pockets. They made a connection between someones supposed suffering and some deep pockets. That's all -- the suffering does not have to be real, the connection does not have to be real. The Tort Bar does not care.
In 2003 alone ... U.S. Silica [a company that mines and sells sand] was served with nearly 20,000 lawsuits claiming it had caused silicosis -- a serious, if rare, lung disease. The tort bar saw silica as the "new asbestos," says Mr. Ulizio, and he had visions of his century-old concern going bankrupt, along with dozens of others.
Instead what ensued was a legal thriller, in which the defendants not only beat the suits, but exposed a mob of lawyers and doctors who were fabricating cases, and who are now under investigation. This year his company has been hit by only one silicosis claim. "We hoped the truth would prevail eventually," he says, back in the conference room of the company's modest headquarters. The realist adds: "It worked, but it didn't have to."
And that might be the most disturbing part of Mr. Ulizio's tale. "When you have an entire system that condones these lawsuits, that does nothing to police its own, where there are no consequences, right or wrong has nothing to do with it. It's a coin flip."
And guess what: It came out that two-thirds of those claiming to have silicosis had previously claimed to asbestosis -- a near medical impossibility. It was just fraud. So, tort attorneys may -- or may not -- make a 'contribution to society' (is that coupon for a dollar off of a Blockbuster rental meaningful?) but they all got rich on tort law. And, US Tort costs are the highest in the world, amounting to 2.2% of Gross Domestic Product (GDP).
In 1972, the National Party government...pushed through the Accident Compensation Act. It enjoyed bipartisan support and passed quite easily - a fact that will astonish any American lawyer observing the endless struggles over even the mildest tort reforms in the U.S.
I'm thinking about making the fact that this legislation passed easily as Reason Number 6 on the list of Reasons to Love New Zealand. Read on from Schuck about the New Zealand Accident Compensation Corporation:
The ACC provides generous no-fault benefits, including hospital and medical costs; wage replacement starting only one week after injury and at a rate of 80% of average weekly earnings; rehabilitation and transportation costs; and lump-sum payments for permanent loss or impairment, surviving spouses and children, and certain other losses. Pre-approval is not required for most medical and dental services, and service providers, not the victims, do the paperwork for the ACC.
So, everyone that is injured is compensated? How much does this cost? In New Zealand, the annual budget for the Accident Compensation Corporation is about $1.5B NZD, or about $858M (see page 5 of Schuck). In New Zealand, they deal with tort claims with (at the official exchange rate) a scant 0.6% of the New Zealand GDP. That is about a quarter of the 2.2% of GPD we spend in the US.
Why the US will never adopt the New Zealand system: Many is the tort case that concludes "let's send the big guy a message -- let's change the system!" Come a little closer, I'm going to share a secret. Torts are the remora of the legal world. Suits filed under tort law usually don't kill the shark -- and forget about punitive damages teaching those bad corporations a lesson -- tort lawyers would never want to dam the river of pain and suffering from which their income flows. And, that is the reason that the US will never adopt the New Zealand system, because too many lawyers make too much money from the current system; the power rests not with the people but with the tort attorneys.
No, the New Zealand system isn't perfect. But it is a lot better than what we have, and now we have another fine reason to Love New Zealand: Tort Reform.