A Crime Bigger than the Murdaugh Murders

Paul MatzkoThe Cato Institute has advocated for tort reform for decades. As the CatoPolicy Handbook put it in 2017, tort litigation creates an incredible quarter of a trillion dollar annual bill that is ultimately footed by consumers. While such litigation is an important means for holding companies liable for bad behavior, in excess it is a growth ‐​minimizing and innovation‐​stymyingcancer.The latest example of the costs of excessive litigation comes from a surprising source: the murder trial of Alex Murdaugh in the low country of South Carolina.Murdaugh himself stole millions in settlement money from his own clients, but what remains underrated is the extent to which Murdaugh ’s old law firm, PMPED–the ‘M’ stands for Murdaugh–acted like an economic parasite that impoverished Hampton County and the surrounding area.The key to PMPED ’s rise—and the firm at one point employed half of the lawyers in Hampton County—was a South Carolina Supreme Court ruling in 1991 overturning the state ’s contributory negligence standard, which hadprevailed for 140 years. I ’ll let the legal profession debate the relative (de)merits of contributory vs comparative negligence standards, but what it meant in practical terms is that from 1991 to 2005 it became much easier for people to win massive settlements from companies in South Carolina. Even if a company ’s negligence only accounted for 1% of an accident, it could be held liable for ...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs