JIB in the News

[Malthus]

Missouri is a UCATA state, and tort damages are several only unless the defendant is more than 50% at fault.

So either the jury found a huge amount of damages, and the $20 million is a fraction of that, or JiB was found to be more than 51% at fault.  Either seems odd, but when you go to a jury, you takes your chances.

Okay, now *that* doesn't make any freaking sense. 

Why, only defendants over 50% of apportioned liability become severally liable for all the damage.  Makes sense to me.  Especially if I am representing defendants who are 50% or less 

The rule makes sense. That the rule resulted in this outcome doesn't.

JiB being out 20 million is an outcome that makes sense under traditional J&S. JiB being out 20 million doesn't make sense under the 50% rule.

[stjaba]

The rule makes sense. That the rule resulted in this outcome doesn't.

JiB being out 20 million is an outcome that makes sense under traditional J&S. JiB being out 20 million doesn't make sense under the 50% rule.

It makes sense because as I mentioned in my other post, generally in negligent security cases even when J&S liability has been modified by statute, juries are not permitted to apportion liability to intentional tortfeasors. Which makes sense because the theory of liability in negligent security cases is that the defendant was (to over-simplify it) supposed to protect the plaintiff from assault.

Assuming that's the law in Missouri, it sounds like the jury apportioned 80% of the responsibility to JIB and 20% of the responsibility to the plaintiff.

[Malthus]

The rule makes sense. That the rule resulted in this outcome doesn't.

JiB being out 20 million is an outcome that makes sense under traditional J&S. JiB being out 20 million doesn't make sense under the 50% rule.

It makes sense because as I mentioned in my other post, generally in negligent security cases even when J&S liability has been modified by statute, juries are not permitted to apportion liability to intentional tortfeasors. Which makes sense because the theory of liability in negligent security cases is that the defendant was (to over-simplify it) supposed to protect the plaintiff from assault.

Assuming that's the law in Missouri, it sounds like the jury apportioned 80% of the responsibility to JIB and 20% of the responsibility to the plaintiff.

Certainly (though I have my quibbles about that rule - as it seems to make the deep pocket 100% liable for intentional torts not committed by it).

My only point is that I was criticizing the outcome in light of the Rule as MM presented it, not the Rule itself. 

[DGuller]

  You still have an inefficient allocation of resources based on a legal absurdity.

that the risk of wrongdoing should be borne by the wrongdoers and not the victim.  What an interesting view of absurdity you have 

Disproportionately.  If you penalize the activity that cause $10 of harm by making punishing the activity with a $1000 judgment, you are creating an environment where the actor has rational incentive to spend $900 to mitigate the possibility of that $10 activity occurring, which is economically inefficient and will lead to absurd levels of risk aversion.

[DGuller]

No, it doesn't account at all for the perversion of the legal theory upon which tort system is based.  It only changes the deep pocket being tapped into in a particular case, and in the long run that cost is just spread along all the deep pockets that buy insurance.

Assuming JIB is like most businesses, it passes along the cost of its insurance to its customers by building the cost of insurance into the price of its products. In the long run, the risk is being spread to all the patrons of JIB.

How does insuring the disproportionate costs or spreading them out changing anything, other than allay the moral doubts that lawyers should have about going after the deep pockets of marginally culpable parties?

[DGuller]

Seriously, I feel like I'm arguing with ambulance chasers here.  "Don't worry, it's the driver's insurance company that would pay for your whiplash.  Actually, make that whiplash and pain and suffering.  Actually, make that whiplash, pain and suffering, and PTSD."

[Sheilbh]

I don't get the moral doubts point. Far worse that the innocent and wronged party can't recover any damages.

Who sets the amount of damages in the US?

[Malthus]

I don't get the moral doubts point. Far worse that the innocent and wronged party can't recover any damages.

Who sets the amount of damages in the US?

That's part of the problem - damages awards are often set by a jury, and this leads to huge awards. In Canada, awards tend to be far more modest - pain & suffering damages are capped, awards are set by a judge, and punitive damages awards are comparatively low and only awarded in the most egregious cases - all compared with the US.

[Admiral Yi]

I don't get the moral doubts point. Far worse that the innocent and wronged party can't recover any damages.

I don't think anyone has argued against the plaintiff recovering *any* damages.

I was thinking that whereas I'm in favor of jury trials in criminal cases, there's a strong argument for removing them from civil cases.

[alfred russel]

Stjaba, I understand the way things are.

My point of view is this. The insurance model you suggest is not good public policy in this instance. In theory, there is a risk, and the insurance protects everyone from that risk, with the premium paid by the business and passed on to the consumer. But in reality, the actions a person takes can significantly alter their risk.

The system partially accounts for that being reducing damages in the event that a plaintiff has himself acted negligently. Additionally, while obviously people can take non-negligent actions that increase their individual risk, it is probably cheaper and more efficient to essentially treat everyone equally.

Also, there are significant sources of waste in using insurance:
-insurance has significant overhead, from profits to investors, to administration costs, to legal costs, and adjusting costs
-the litigation in these sorts of situations is enormously expensive
-the outcomes in front of a jury are random and unpredictable

In a non J&S world, you are still going to have all of that. The elimination of J&S in Florida certainly did not eliminate the need for businesses to purchase liability insurance. Are you opposed to the tort system generally? Or the concept of tortfeasors passing along insurance costs to customers? Even if you are opposed to imposing liability on JIB in negligent security cases, JIB is still going to have buy insurance to cover slip and fall accidents, accidental finger in chili incidents, etc.

I also disagree about the triviality of the costs. I don't know the ownership structure of this JiB. It may have been a owned by a franchisee who had just one or two stores, and with insurance limits that will cause him to go into bankruptcy. It may be have been a corporate store owned by JiB. But if we assume the biggest pockets possible--this was owned by JiB--I checked their net income from last year: $58 million (and that includes Qdoba). A $20m judgment would be a big deal to them if they self insure. Even if they don't, their insurance costs must be considerable.

Again, these costs and risks generally exist whether J&S liability exists or has been abolished. Does J&S liability marginally increase the odds of a significant adverse judgment and marginally increase the cost of insurance? Probably, but I suspect you are vastly overstating how much of an impact J&S liability has on the general cost of liability insurance.

Regarding costs, I've posted that the entire net income of the JiB/Qdoba enterprise were $58m last year. $20m is a significant chunk of that. I can't imagine that the impact to insurance is insignificant (J&S not being the issue so much as the more general issue of finding deep pockets to foot expenses).

The de facto insurance coverage you are giving me when I enter a JiB parking and must recover through the tort system is also so deeply flawed I can't rely on it. Jury verdicts are unreliable both in terms of outcome and amount. Fees take away a significant portion of the proceeds if I win. Litigation can take years when I may need money immediately. The other party may not pay (and in this case that is still a possibility--if this was a franchisee and insurance was capped at a lower amount).

Essentially, despite the insurance you are theoretically giving me in the JiB parking lot, I need to self insure for the risk. This isn't so bad, because I also need to self insure for other causes of medical incapacity that don't have deep pockets around to pick up the tab.

[stjaba]

How does insuring the disproportionate costs or spreading them out changing anything, other than allay the moral doubts that lawyers should have about going after the deep pockets of marginally culpable parties?

It changes the whole equation. Your argument seems to be that it is unfair for JIB to pay for 80% of the damages when you feel that the risk of loss should be borne entirely by the victim(since the intentional tortfeasor is judgment proof). My response is that it makes sense to essentially spread the risk of loss among all JIB patrons via insurance built into the price of JIB's products as opposed to burdening any one particular patron with the risk of loss.

As a further point, as I noted in my other post, in an alternate universe where JIB is not liable, the risk of loss would probably be allocated among JIB patrons' health and disability insurers, or there would be some sort of alternative insurance system to cover the risk of accidents caused by others (i.e. similar to UM insurance). Or to the extent injured  parties are indigent and have no insurance, the government would cover it to a certain extent. One way or another, the risk of loss will be spread. It just so happens under the tort system, JIB is presented with the direct cost of obtaining insurance, and it spreads the risk itself. Which makes sense, because of all the parties out there, JIB is the one best placed to (1) spread cost of insurance of injuries for JIB patrons, and (2) prevent injuries from occurring on its premises.

[alfred russel]

It changes the whole equation. Your argument seems to be that it is unfair for JIB to pay for 80% of the damages when you feel that the risk of loss should be borne entirely by the victim(since the intentional tortfeasor is judgment proof). My response is that it makes sense to essentially spread the risk of loss among all JIB patrons via insurance built into the price of JIB's products as opposed to burdening any one particular patron with the risk of loss.

As a further point, as I noted in my other post, in an alternate universe where JIB is not liable, the risk of loss would probably be allocated among JIB patrons' health and disability insurers, or there would be some sort of alternative insurance system to cover the risk of accidents caused by others (i.e. similar to UM insurance). Or to the extent injured  parties are indigent and have no insurance, the government would cover it to a certain extent. One way or another, the risk of loss will be spread. It just so happens under the tort system, JIB is presented with the direct cost of obtaining insurance, and it spreads the risk itself. Which makes sense, because of all the parties out there, JIB is the one best placed to (1) spread cost of insurance of injuries for JIB patrons, and (2) prevent injuries from occurring on its premises.

I think it would be much more efficient to spread the risk among other insurers. As I mentioned, I think the tort system as insurance provider is phenomenally inefficient.

[stjaba]

The de facto insurance coverage you are giving me when I enter a JiB parking and must recover through the tort system is also so deeply flawed I can't rely on it. Jury verdicts are unreliable both in terms of outcome and amount. Fees take away a significant portion of the proceeds if I win. Litigation can take years when I may need money immediately. The other party may not pay (and in this case that is still a possibility--if this was a franchisee and insurance was capped at a lower amount).

That's why 97% of civil cases settle. Also, obviously the system is imperfect, but I challenge you to come up with a system that 1) Incentives defendants to avoid accidents, 2) compensates plaintiffs for their injuries and 3) allocates risk fairly.

Essentially, despite the insurance you are theoretically giving me in the JiB parking lot, I need to self insure for the risk. This isn't so bad, because I also need to self insure for other causes of medical incapacity that don't have deep pockets around to pick up the tab.

That's great for you, but most people don't have the capability to self-insure. What makes more sense? Having JIB increase the cost of burgers a few cents to pay for insurance or expecting everyone to self-insure against accidents?

[Sheilbh]

That's part of the problem - damages awards are often set by a jury, and this leads to huge awards. In Canada, awards tend to be far more modest - pain & suffering damages are capped, awards are set by a judge, and punitive damages awards are comparatively low and only awarded in the most egregious cases - all compared with the US.

Yeah. That seems to me the problem.

I don't think there's anywhere near such a problem with joint and several if the damages awarded are reasonable. They're also relatively modest in the UK because 99% of civil cases are heard by a judge alone. In addition the Government Actuary's Department provides a table for courts to use to calculate appropriate damages.

I don't think anyone has argued against the plaintiff recovering *any* damages.

No. But I think a lot of people here would be more comfortable with joint and several if the level of damages were a bit more sensible.

But the effect of just getting rid of it would be to deprive innocent parties of damages they should receive for loss they have suffered, or to make them go through all the extra legal costs of recovering it. Especially when you're dealing with uninsured or insolvent defendants.

[stjaba]

I think it would be much more efficient to spread the risk among other insurers. As I mentioned, I think the tort system as insurance provider is phenomenally inefficient.

You are correct that it is inefficient, but by removing the threat of tort liability you remove incentives for defendants to avoid accidents. Basically in your system, defendants will be free riders, it is likely there will be more accidents since defendants will have no incentive to prevent accidents, and other insurers will have to pick up the tab. And in your alternate universe, there will still be litigation, but between the insurers and plaintiffs, as opposed to between plaintiffs and at fault parties.