Laws and regulations sometimes seem to accumulate like the knick-knacks in your grandparents’ attic. Years out, it is hard to remember why or when any of them were purchased. That’s the case in the UK as well as here, but on the other side of the pond, David Cameron has promised to do something about it. The FT reports:
David Cameron has promised to contain the “health and safety monster” that he claims is a threat to small companies, including setting out plans to cap legal fees in disputes involving businesses.
[…]Mr Cameron said the government would cap lawyers’ fees in cases of personal injury claims of up to £25,000 to try to give companies some certainty about their legal bills in litigation.
The prime minister said that many companies settled out of court in what they regarded to be speculative claims because of fears of high legal fees, even if they were convinced they would win.
The problem with the tort behemoth in Britain and America is that many of the laws were written during bygone eras and have outlasted their original purpose. There was a time when regulators were remiss at protecting workers who might lose their hands in textile machines, but today having an employee slip on a rug might be enough to get a company sued.Worse, litigation has undergone what Daniel Patrick Moynihan called “professionalization”: lawyers realized people weren’t bringing enough problems to them so they decided to go out and find them. Dial 1-800-LAWYER. For awhile, it was easier for businesses just to pay out nuisance settlements but this has encouraged the litigation industry to bring more complaints.Cameron is right that this kind of burden is crippling for small business especially. The litigation industry has to be pruned back, hard, to get the economic growth we need. The UK plan to counter the litigation industrial complex is long overdue, but it’s better late than never. In America, we’re still waiting.