Marcinkowski: Tort reform socializes liability

Lake Orion attorney Jim Marcinkowski wrote a commentary for the Detroit Free Press attacking the tort reform movements both past and present as a form of corporate socialism.

Some highlights:

4. There are only two choices for compensation.
•The responsible party pays. The person or entity found responsible for the loss in a legal proceeding pays the person suffering the loss. In the case of a business, this may be looked at as the “cost of doing business,” where the cost of the accident is paid by the business, which in turn spreads those costs to its customers by raising the price of its product or service. In such a “mini-free market” system, lawsuits punish an irresponsible party, forcing either higher prices or even market exit, while simultaneously rewarding a more responsible competitor who, without a lawsuit, can keeps its prices low.

•The government pays. If the loss cannot be recovered from a responsible party in the legal system, then, as in the case where a household loses a breadwinner or the breadwinner suffers an irreparable injury and cannot work, the last recourse will be some government assistance program. In other words, the loss is spread not among the users of the product or service, but is spread among taxpayers.

What advocates of “tort reform” are really saying is that the “cost of doing business” (paying compensation) should be borne by the government and taxpayers, not by private enterprise. Given their way, such reform would not only reduce cost and therefore increase profit (by shifting those costs onto the public), but take away lawsuits that, aside from increased government regulation, are the only mechanism available to check irresponsible behavior.

Tort reform is, therefore, just another mechanism to increase private profit by socializing any cost or loss.

Marcinkowski argues that tort reform has not had the proposed positive effects on the Michigan economy and premium rates (especially for doctors), and has made the state less safe, comparing it to allowing criminals to go free:

•Tort reform is a catchphrase.
So is “Don’t do the crime if you can’t do the time.” The latter is more insightful than the former. Tort reform is the equivalent of choosing not to prosecute criminals so they can remain on the streets to do more crime. We all suffer and pay as a society while the wrongdoers continue to make more profits without penalty.

The Freep did not publish a counter argument. Feel free to post your own in the comments.