People seeking access to the courts face increasing barriers. This threatens the effectiveness of existing legal rights and legal protections. Obstacles include tort reforms that limit victims’ ability to seek redress in court. Technical filing requirements can also restrict access to courts. This includes the determination of who has legal standing. And contract terms that include mandatory binding arbitration also keep individuals from their day in court.
Tort reform—individuals hurt as a result of the negligent or intentional conduct of another person or a corporation can sue for damages. This area of law is known as tort law. Tort reform legislation attempts to restrict the right to file lawsuits and recover damages for wrongdoing.
Tort reform proposals include:
- forcing claimants to resolve claims outside the court system, such as in mandatory binding arbitration (see also this chapter’s section Pre-Dispute Mandatory Binding Arbitration);
- limiting attorneys’ fees, punitive damages, and awards for pain and suffering (the most common and often the most important form of compensation in most civil suits aside from lost wages in employment suits);
- changing legal doctrine governing such civil wrongs as personal injury (both in tort and product liability law), including replacing “joint and several liability,” under which each and every defendant is liable for all damages a plaintiff suffers, with liability that is “several” only; and
- imposing limitations on class action lawsuits.
Tort reform proponents argue that courts and legislatures can adequately protect individuals. Supporters claim that the situations in which wrongdoers can be found liable have been broadened. They also support reform to curb frivolous lawsuits. Defending frivolous lawsuits increases the costs of business. This in turn leads to higher prices.
Opponents of tort reform contend that some proposals jeopardize the rights of victims. They say it makes it harder for victims of harmful or illegal practices to seek redress. For example, restrictions on joint and several liability could leave injured parties without effective remedies. They believe judges should determine whether a claim is frivolous, and that holding defendants accountable deters future bad acts.
Some tort reforms limit damages to actual cost and lost wages caused by an injury. People who are retired, older, low income, and disabled may not work or may earn low wages. These reforms leave them at a disadvantage.
Private rights of action—a private right of action allows private parties to go to court to enforce the law. If a law does not provide a private right of action, only federal or state officials or regulatory bodies may enforce it. Yet they may not have the willingness or financial resources to do so. Lawmakers must provide a private right of action in legislation. This ensures that policies intended to protect individuals can be enforced.
Class action lawsuits—a class action combines the claims of all the people injured by a particular policy or practice into one lawsuit. It ensures that companies do not benefit from a violation of the law or harmful practices simply because most people will not know about or file litigation to enforce their legal rights. Sometimes the cost of pursuing an individual claim outweighs any possible remedy. In these cases class actions are a crucial tool. They also help change unfair or abusive policies or practices that affect a large number of people. Individuals joining together in a class action can hold companies accountable. Without this ability, companies that cause only a small amount of harm to many people will likely escape liability. And they will be free to continue harming people with their unlawful practices.
Class action suits in state and federal courts have successfully challenged and provided significant relief for a broad range of claims. These include cases based on age discrimination in employment, sweepstakes and telemarketing fraud, unfair lending practices, access to affordable medication, and denials of contractually guaranteed pension benefits.
Critics of class actions argue that plaintiffs’ attorneys benefit more than class members. They also maintain that certain state courts are magnets for class actions, allowing frivolous lawsuits to proceed that award excessive damages to class members.
The Class Action Fairness Act requires most class actions to be litigated in federal court. This includes cases that raise only state law claims. This may slow down the resolution of cases. Case resolution in federal court may be delayed because there are many more state judges than federal judges. Moreover, federal judges are now responsible for interpreting and applying state law with which they may not be familiar. The Supreme Court has also made it more difficult to obtain class certification. As a result, the availability of class actions has been limited. It has also weakened their effectiveness.
Many legal rights will never be vindicated without class actions. For instance, the legal theory that provides relief for “pattern or practice” cases requires that it apply to more than one person. Legal fees to prove and recover a single consumer overcharge or protect an individual from discrimination could far exceed the remedies provided by statute or the economic means of an individual.
A study from the Consumer Financial Protection Bureau (CFPB) found that class actions provide a more effective means than individual suits or arbitration for consumers to challenge questionable corporate practices. They have provided at least 160 million class members with settlements totaling $2.7 billion in cash, in-kind relief, and attorney fees and expenses over the five-year period studied. Furthermore, the study showed that class actions push companies to alter abusive actions.
Many contracts now prohibit consumers, employees, and patients from pursuing class actions. These contracts often include a mandatory binding arbitration clause (see also this chapter’s section Pre-Dispute Mandatory Binding Arbitration). The Federal Arbitration Act supersedes state law. This means that states cannot protect consumers from class action bans embedded in arbitration clauses (see also Chapter 11, Financial Services and Consumer Products—Federal and State Roles in Consumer Protection Regulation for more information on federal preemption of state law).
Marital property—In many states, property acquired during a marriage belongs to the person in whose name the property is titled. This can present problems for older women with limited work experience, who end up with little property and few rights. The Uniform Marital Property Act is grounded in the concept of marriage as an economic partnership in which both partners contribute and share equally in its obligations and property rights. It establishes and enforces shared ownership and property rights during the marriage. A spouse not on the title of a property, for example, would be able to stop the other spouse from giving that property away to someone else. Thus far, Wisconsin is the only state that has adopted the act.
PRIVATE ENFORCEMENT OF LEGAL RIGHTS: Policy
Access to the legal system
Policymakers should explicitly allow private individuals to protect their rights in court. This can be done by providing a private right of action in all legislation intended to protect individual rights.
The civil justice system should become less costly. It should also be more effective and accessible for all parties. This includes encouraging fair and non-coercive settlements, improving access for people with small claims, and streamlining the judicial process.
Courts, not legislatures, should decide whether lawsuits are frivolous. They should do so before either party incurs significant expense.
Damages in civil proceedings
Policymakers should ensure that judicial proceedings are fair. They should not enact statutory damage limitations. The judicial system, not lawmakers, should determine damage awards.
Courts and juries should determine damage awards free from all forms of age bias.
Class action lawsuits
Policymakers should not restrict the ability to bring a class action. This includes measures that would limit access to remedies available under various laws or that would postpone resolution of class action suits. Congress should repeal the Class Action Fairness Act.
Federal preemption of state law
Federal laws should constitute the floor, not the ceiling, for protecting individual rights. They should not preempt state laws that provide more protections or remedies.
Uniform Marital Property Act
States should adopt legislation that treats all property (except gifts and inheritance) acquired during marriage as the joint property of both spouses, regardless of who holds title to it.