Mobil Corporation Calls for Civil Justice Reform

Strategic Insights -

The American civil justice system has become a "grand jackpot" that provides excessive windfalls to plaintiffs and their lawyers, according to Sam Gillespie, General Counsel for Mobil Corporation. With jury awards for punitive damages spiraling into the hundreds of millions of dollars, the system is out of balance, favoring plaintiffs and their lawyers at the expense of businesses and consumers. The consequences are staggering, with direct costs for the civil justice system estimated at $132 billion in 1991, 60% of the nation's spending on public education.

Key Takeaways:

  • The civil justice system has become a "grand jackpot" that provides excessive windfalls to plaintiffs and their lawyers.
  • Jury awards for punitive damages have spiraled into the hundreds of millions of dollars, with examples including a $3 million award for a customer who spilled hot coffee on herself and a $125 million award for a plaintiff who lost an eye due to a doctor's misadministration of a prescription.
  • The concept of joint and several liability has led to defendants being held responsible for damages beyond their share, including the fast-food franchisor and pharmaceutical company in the examples mentioned.
  • The system is out of balance, with plaintiffs and their lawyers benefiting at the expense of businesses and consumers, leading to higher product and insurance costs, fewer jobs, and reduced availability of services.
  • An actuarial consultant estimates that the direct costs for America's civil justice system in 1991 were $132 billion, 60% of the nation's spending on public education.
  • Lawsuit abuse is not limited to product liability issues, but affects organizations such as the Boy Scouts, Little League, and volunteer workers.

Statistics:

  • $132 billion: Direct costs for America's civil justice system in 1991 (Source: Actuarial consultant)
  • 60%: Direct costs for America's civil justice system in 1991 as compared to the nation's spending on public education (Source: Actuarial consultant)
  • $3 million: Jury award for a customer who spilled hot coffee on herself
  • $125 million: Jury award for a plaintiff who lost an eye due to a doctor's misadministration of a prescription

Sources:

  • Public Relations Newswire, April 18, 1995
  • Mobil Corporation, Sam Gillespie, General Counsel