You’ve heard the phrase “certain things come with the territory.” That’s as true for lawyers as anyone else. Besides hearing every lawyer joke that comes along (both bad and hilarious), lawyers routinely hear complaints about how the system is broken, lawsuits are out of control, fraudsters make out like bandits, and honest folks pay the price in higher premiums. We hear all these things from family, friends, and neighbors. But what is most interesting is when we hear it from our clients. They have heard all these lines and yet now they find they need a lawyer. Many clients understandably are defensive about it, saying things like “we’re not the type to sue” or “we’re not trying to get rich.”
So, we’re going to throw some light on these topics over the coming months, and pepper in some half-decent lawyer jokes too, because the numbers can get pretty dry and boring by themselves. Are lawsuits out of control? Well, every lawsuit is tracked by the federal and state court systems, so there is plenty of data to examine the question. What about ‘runaway’ juries? Verdicts are tracked, too, so ‘runaway juries’ can be spotted. Although fraudsters have existed since before the Pyramids, we have more tools than ever to identify them and “brand” them to prevent repeated offenses. What about how all this affects your insurance premiums? For that we have to train our focus on insurance industry profits. Insurance companies failing to turn a profit would be a very big, very yellow “canary in the coal mine” of our system. Of course, if Progressive or State Farm was failing to turn a profit, we wouldn’t see their corporate fingerprints all over our ballparks, racing cars, and constantly on our screens.
Other related topics, such as the now-24-year-old McDonald’s coffee case will be included. Finally, we encourage questions and comments through our website at www.willislegal.com.
This issue’s topic: Are lawsuits out of control? In recent decades the Ohio Supreme Court has kept ever-greater records on lawsuits in our state; the total number, type, length, and disposition (for example – actually went to trial, was dismissed, settled, etc.). This is all found in an annual report, which takes a lot of work to put together. Ohio has 129 municipal courts, 35 county courts, 303 mayor’s courts, 88 Courts of Common Pleas, and one Court of Claims. (2014 Ohio Courts Statistical Summary, p. 5) These 556 courts collectively are our “trial courts,” in which new cases are brought. (The Court of Appeals and Supreme Court do not typically hear “new” cases.)
From the most recent report (released Fall 2015):
“In 2014, a total of 3,167,967 incoming cases were reported across Ohio’s courts, the fewest in the last 10 years, and 2.6 percent fewer than 2013.… the general divisions of the courts of common pleas experienced the largest decline, at 5.5 percent over 2013.”
When people talk to us about the system being out of control, they are of course referring to car crashes, slip-and-falls, and suits against doctors or hospitals. The vast majority of these cases; over 99%, are filed in our Courts of Common Pleas and are assigned to the General Division. This is also where banks file their foreclosure cases, neighbors file suit over fencelines, businesses sue each other for breach of contract, and other, yes, “general” litigation. Yet all of this, from foreclosures to car crashes, accounts for just 5-7% of lawsuits in Ohio (6.6% was the figure in 2014). By far the biggest slice of litigation in Ohio is in the municipal and county courts, which hear most of the state’s traffic cases and small claims matters. Their share of the activity in last year’s report was almost 79%. Criminal matters, divorces, juvenile cases, probate, and a few other categories make up the rest.
To measure the general division, we have to be mindful of foreclosure cases, which surged following the Great Recession in 2008 but which have now run their course. (In fact, foreclosure filings are significantly below even their pre-Recession levels.) But if we use a 10-year window and go back to 2005, before the foreclosure surge, and compare it to the most recent year, lawsuits in the general division are down 22%. There is a 16% decline when looking at all categories together, so car crashes and the like are down even more than other types of filings. So, no: lawsuits are not spiraling out of control and are actually down significantly.