City Journal, Winter 1993
[sidebar #2 to Sue City: New York's State in Lawsuit Reform]
By Walter Olson
"Nobody wanted accidents to happen," wrote the late political philosopher Sidney Hook about growing up poor in Williamsburg, "but if they did occur and were not fatal or crippling, they were deemed blessings in disguise."
In his memoir Out of Step, Hook tells of the time as a boy he got badly scraped running in front of a trolley car. "In due course I was my vigorous self again but was kept in bed until the company inspector came to settle." Boredom, bane of bright children, proved his undoing. Tired of playing inside on a sunny day, Hook ignored his mother's orders and stepped out -- only to meet the trolley company inspector, who carefully noted his state of health. With that went his family's hopes for a big settlement. "I was not punished, but I was made to feel that I had let the family down badly. For years my betrayal was thrown up to me when I got into difficulties."
It's an old tradition: given a genuine mishap and a possible legal claim, plenty of otherwise respectable New Yorkers are willing to boost their bargaining leverage by taking off work for a while, or running up not-strictly-necessary medical or chiropractic bills. Unfair? As they used to say out in South Dakota, "A man who won't steal from the railroad isn't honest."
Sometimes it gets worse. Hook recalls a "gruesome and unforgettable" scene in Bushwick, when his friend Bip, crying "Watch me, boys!", deliberately threw himself beneath a horse-drawn carriage. "As we ran toward him, someone remarked: `Bip has just made a case for his father!'" Bip, who very luckily escaped with minor injuries, did make a case, and his family sued. (Hook guesses that the stunt may have been the boy's way to trying to make up with his father after a quarrel.)
The local kids weren't sure it was right for them to back up Bip's story about having crossed the street innocently. But the hired-carriage company spared them that decision by settling, "whether because companies never won that kind of case or because the amount of the suit was less than the costs of litigation".
Technology marches on, but human nature does not. California authorities recently arrested sixteen persons on charges of deliberately causing car crashes. The scheme works like this: organizers obtain a rickety car and fill it with occupants, often recent immigrants who are paid token sums of $25 or so. Then they drive out on the freeway, pull in front of a tractor-trailer rig, and slam on the brakes.
Sometimes a second or third car will take part, hemming in the target rig's driver to keep him from swerving to avoid an accident. In at least one case, the plan went wrong and a passenger was killed. The racket appears highly successful: California agencies learn of hundreds of cases a year, most in the Los Angeles area, and say as many as 90 persons are involved in at least three separate rings.
New York City is short on high-speed traffic and has a reasonably strong no-fault insurance law, so Gotham's abusers target public transit and public sidewalks. Street people show up after minor bus collisions pretending to be passengers; folks with broken arms "remember" slipping on a documented sidewalk crack. Slip-and-falls cost New York City taxpayers $3.82 per capita per year. The comparable figure in Denver is 2 cents, reports Allen Myerson in the New York Times.
Prosecutors say dishonest lawyers and doctors are behind most of the organized abuse. But it's hard to pin anything on them, because the time-honored privilege of client confidentiality makes it hard to prove fraudulent intent.
Unless, that is, someone inside the scheme is willing to talk. That's what happened last year in the Morris Eisen case, in which prosecutors charged three lawyers and four others with a colorful array of misdeeds including using a pickax to widen a pothole so it could be blamed for a mishap and carelessly calling the same witness for two different accidents -- a witness who not only was not at either scene, but was serving time upstate for forgery at the time of one of the incidents. The catch was a big one: Eisen's had been among New York's largest personal-injury firms, grossing an estimated $20 million and specializing in suits against City Hall.
Some plaintiff's attorneys welcome antifraud efforts, reasoning that cleaning up the abuses will leave the way clearer for honest claimants and lawyers. When the Eisen indictment was announced, however, it brought fierce criticism from Pamela Liapakis, president of the New York Trial Lawyers Association. She said, "I am sure there are political motivations here. I think that the city of New York has an interest in trying to convince the public that the city is being victimized by people who are bringing lawsuits that are in some ways not legitimate. And that's simply not true." A federal jury apparently disagreed: last year it found Eisen and six associates guilty.
* * *
Walter Olson is a senior fellow at the Manhattan Institute and author of The Litigation Explosion.
To main article ("Sue City: New York's Stake in Lawsuit Reform") / to sidebar #1 ("Those Crazy Cases")
Related book review on accident fraud (Wall Street Journal)
FOR FURTHER READING: Shaun Assael, "Turning Potholes Into Gold: Law Firm Made Millions Faking Personal Injury Cases", Village Voice, October 30, 1990.
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