Why America is not 'like America': debunking myths of the American legal system

"Indeed, a commonly expressed concern with our public is that the local jurisprudence may come to embrace outlandish US experience in the area of so-called compensation. . .

People who have to pay insurance premiums, together with others altruistically minded, read about these trends and worry: will this become a feature of the Australian compensation landscape?"

The above passage is an extract from a paper delivered by a Supreme Court Judge to a meeting of the legal profession. The statement reflects common community notions of the American legal system: a system flooded by spurious claims from vexatious litigants being rewarded with enormous awards of damages. Australians believe that Americans are over-litigious and their claims for compensation are out of control. The great fear of the Australian public is that Australia’s legal systems will ultimately become "like America".

This perception of the American legal system is misleading. It is a myth, fuelled by those who seek to reform tort law in the United States. These reforms are aimed at restricting the financial exposure and legal liability of interested parties for wrongs committed within the community. The reforms attempt to strip the community of their basic common law rights and replace them with a manageable and "fairer" justice system.

Myth No. 1 – The US civil justice system is overwhelmed with personal injury compensation law suits

A common perception among Australians is that the US civil justice system is overwhelmed with tort cases. The majority of Australians believe that claims for compensation in the United States are very common.

Research into the US justice system reveals that this conclusion is simply not correct. Tort cases, excluding small claims matters, account for less than two per cent of the total case load (civil and criminal) in State Courts. State Court records for 1994 show that 78 per cent of cases consisted of traffic, criminal and juvenile cases. Personal injury cases account for 6.2 per cent of the civil cases filed in the State Courts. In fact, there are four times as many domestic disputes filed in State Courts as personal injury tort claims.

Data from general jurisdiction Courts in sixteen states indicate that tort filings rose 43 per cent between 1975 and 1998. Most of this increase, however, occurred between 1975 and 1986. In fact, the volume of tort filings in State Courts has declined since 1990. In contrast, domestic relations filings have increased significantly.

The perception that Americans turn to the courts for compensation on the suffering of an injury is also misconceived. Many studies suggest that most Americans who are injured in accidents do not turn to the courts for compensation. According to a RAND Institute study, "with the exception of motor vehicle accident victims, only a minority, even among those who are quite seriously injured … use legal mechanisms. In this respect, American behaviour does not accord with the more extreme pictures of litigiousness that have been put forward by some".

A comprehensive 1990 study by the Harvard Medical Study Group estimated that, in 1984, eight times as many patients suffered an injury from negligent medical treatment as filed a malpractice claim in New York State. About 16 times as many patients suffered an injury from negligence as received compensation from the medical malpractice system.

Myth No. 2 – Americans seeking compensation simply start a law suit and win

A further misconception is that in the US civil justice system, juries award huge compensation payments to plaintiffs against hapless defendants for spurious claims. Medical practitioners and other professionals are regarded as being easy targets for plaintiffs before juries in the United States.