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ABA Journal Misses Story on Offer of Judgment Rule



The ABA Journal (online edition) has a short piece on Muenster v. Suh, the recent case in which a Georgia trial court struck down as unconstitutional the recently-adopted Georgia offer-of-judgment rule.

Predictably, the ABA quotes the plaintiff's lawyer and a law professor who supports the Superior Court's decision. The piece quotes without analysis the blanket statement of the plaintiff's lawyer, Vincent Sowerby, that the Rule would have "shut down tort plaintiffs, shut down their lawyers and helped big business."

What makes this so remarkable is that the defendants in Muenster v. Suh were the three individual members of the Suh family who were involved in the motor vehicle collision that sparked the litigation.

After passage of Georgia's tort reform bill in early 2005 the Suh family offered to settle the plaintiff's claims for $6,300. The plaintiff, perhaps believing he might get lucky in the litigation lottery, declined the offer and insisted on a jury trial. At trial, the jury awarded the plaintiff only $2,859.93.

The cost to the defendants of placating the plaintiff's ego and desire for a potential windfall was $4,590.85 in attorneys' fees from the time the settlement offer was declined through trial. Under Georgia's Rule 68 the defendants were entitled to have the plaintiff pay those excess attorneys' fees (less the amount of the verdict).

To the media (or at least the pro-plaintiff ABA Journal), this outcome somehow benefits "big business." In reality, of course, it benefits defendants of all sizes, including the Suh family, who promptly try to settle cases for a reasonable amount. The only beneficiaries of the Muenster ruling are the plaintiffs' lawyers who will safely persist in counseling their clients to reject reasonable settlement offers in the hopes of a windfall from the jury.

The losers in this scenario are everyone else. Each of us who buys goods and services in the U.S. economy pays a portion of the "tort tax" through higher prices as producers increase the price of their products to defray the cost of excess litigation.

Sadly, the ABA Journal missed that part of the story.

(Cross-posted)

 

 


Rafael Mangual
Project Manager,
Legal Policy
rmangual@manhattan-institute.org

Katherine Lazarski
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.