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Lawsuits
can wreak havoc on a company's share value and
reputation.
The
threat of a lawsuit and the related media damage
can be very serious. It is
so serious, that companies decide even to settle
false claims to end the bad publicity and the risk
of further damage to their reputation and/or
financial standing.
Lawsuits are not tried
exclusively in a courtroom. They also are tried in
the television, newspapers, the
media.
Corporations rarely appear sympathetic, especially
when someone has been
harmed.
"Just
as corporations are organized around different
"lines of business," plaintiffs’ lawyers target
different industrial sectors.
These
include:
-
Traditional profit
centers like asbestos, tobacco, pharmaceuticals,
and insurance;
-
Potential growth
markets
like lead paint and
mold;
Suits that today seem
outrageous, like those against the fast-food
industry, but might well be called new product
development
Plaintiffs’ lawyers
are increasingly sophisticated in targeting their
customer base; they aggressively and
cooperatively solicit potential claimants through
the Internet and traditional print, radio, and
television media
outlets"
James R. Copland
Director, Center for
Legal Policy
Manhattan Institute for
Policy Research
The
Tobacco Settlements
I don't like smoking.
It is too dangerous. But...
300 lawyers from 86
firms will pocket as much as $30 billion over the
next 25 years
More than $8 billion
will go to a handful of firms that pioneered the
first tobacco lawsuits in Mississippi, Florida,
and Texas.
The Florida teams will take home
$3.4 billion, or $233 million per
lawyer.
That’s $7,716 an hour—assuming they
each worked 24 hours a day, seven days a week for
three and a half
years
Tort
costs are so high—and varied—that they create
significant competitive advantages and
disadvantages among US states.
The
costs of asbestos litigation could reach $200
billion—more than the Northridge, California
earthquake, Hurricane Andrew, and
September 11th attacks
combined.
Attorney fees of $250 to $350 million were awarded
in one asbestos case, resulting in effective
hourly fees averaging $2,500 to
$5,000
The
University of Nevada Medical Center closed its
trauma center in Las Vegas. Its surgeons had quit
because they could
no
longer afford malpractice insurance. Their
premiums had increased sharply, some from $40,000
to $200,000. The
trauma
center was able to re-open only because some of
the surgeons agreed to become county government
employees
for a
limited time, which capped their liability for
non-economic damages if they were sued.
Dr.
Cheryl Edwards, 41, closed her decade-old
obstetrics and gynecology practice in Las Vegas
because her insurance premium jumped from $37,000
to $150,000 a year. She moved her practice to West
Los Angeles
Example: Class action lawsuit against
Toshiba - collected between $100 and $443 each in
cash and coupons from the company, while the
attorneys who represented them collected $148
million in fees. Toshiba Corp. agreed to a $2.1
billion settlement. In its settlement,
Toshiba denied liability for the
problem and maintained that there is no "problem
or defect" in its laptops. The company
said it agreed to the preliminary settlement
because it feared a jury trial could have saddled
it with a verdict of as much as $9 billion.
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