The myths and realities of a litigation-mad culture

One of the most important cultural achievements of the Howard government was to persuade many Australians that the judicial system bears a high level of responsibility for whatever is wrong with the country.

In Howard’s view, the courts, lawyers and judges fostered an American-style culture of litigation, leading to an abdication of personal responsibility. Instead of bearing up manfully to pain and suffering, that is, Australians had got the strange idea in their heads that where a wrong had been done to them, they were entitled to a remedy at law.

In this context, Tony Abbott’s calumny against Bernie Banton was no throw-away remark. After Mr Banton criticised Abbott for not accepting a petition, Abbott replied, “Look it was a stunt, let’s be upfront about this. I know Bernie is very sick, but just because a person is sick doesn’t mean that he is necessarily pure of heart in all things”.

Leaving to one side Abbott’s judgment on who shall see God, the Health Minister was expressing a fairly common view that the actions against James Hardie were all about money and not about justice at all. In this view, Mr Banton simply had the wrong attitude about his sickness.

In an interview on April 23, 2002, at the time of the insurance crisis, John Howard noted that there needed to be a “a very major change in the expectations of the Australian community about liability for conduct. I think we have to change our attitudes. I think the expectations in relation to litigation are too high.”

Howard said that he did not want Australia to “go down the American path on litigation”. And he concluded that Australians needed to change their whole approach to the law of negligence: “You can’t have it both ways. You can’t expect to sue at the drop of a hat and complain about public liability insurance premiums going up and I think the whole community has to rethink this.”

Howard argued on various occasions that the insurance crisis was brought about by frivolous lawsuits, money-crazed lawyers, and ridiculously high liability payouts, leading to unrealistic public expectations. In May 2002, around the time of a national liability summit in Melbourne, Howard went so far as to call for some activities to be completely “quarantined” from the law of negligence (Duncan Macfarlane and Monica Videnieks, “Litigation mania must stop - PM”, The Australian, May 29, 2002).

John Howard had a retinue of supporters across party lines on this issue. Joe Hockey for example argued that “We’re falling over ourselves to sue” and called for the return of “personal responsibility” to our culture and cultural expectations (Joe Hockey, “We’re falling over ourselves to sue”, Canberra Times, March 27, 2002).

Similarly, Bob Carr gave unstinting support to the campaign for “personal responsibility”. In an address to the Sydney Institute on July 9, 2002, Carr argued
that an “American-style culture of litigation” was taking hold in Australia, and quoted the American writer Lawrence Friedman to claim that a “total justice” mentality was emerging in which “If a person feels wronged or injured, she feels that there must be a remedy, somewhere in the system”. As New South Wales Premier, Carr legislated to place limits on damages payouts, especially in regards to personal injury, and limits on lawyers’ costs. Other Labor premiers spoke of their readiness to take the same measures.

The common focus of both Howard and his Labor Premiers was that Australia is following the US down a path of litigation madness, in which insurance premiums rise, firms become afraid to innovate, doctors afraid to practice, councils afraid to provide playgrounds, and restaurants afraid to serve coffee. And at the root of all this, people who stubbornly adhere to the principle that for every wrong there is a remedy.

In fact, it was the mythology rather than the reality of a litigation-mad culture that came from the United States. And one of the chief mythologists was George W Bush when Governor of Texas. Supported by public-spirited corporations like Enron, Bush steered tort law reform through the Texas legislature in 1995 by declaring a “legislative emergency” on negligence and malpractice claims. The Bush reform included capping awards for punitive damages, giving blanket immunity to civil suits to some professionals, and making it more difficult to recover damages when more than one defendant was involved.

More than 30 American states passed tort law reform schemes in the wake of Texas. Predictably, the number of civil suits fell in all those states - but insurance premiums did not fall. As the Center for Justice & Democracy noted in its 1999 report, Premium Deceit: The Failure of “Tort Reform” to Cut Insurance Prices, “States with little or no tort law restrictions have experienced approximately the same change in insurance rates as those states that have enacted severe restrictions on victims’ rights”.