TortsProf Blog

Editor: Christopher J. Robinette
Widener Commonwealth Law School

Wednesday, October 14, 2009

O'Connell & Born on Early Offer Savings for Products Liability

Jeffrey O'Connell (Virginia) and Patricia Born (Florida State Business) have posted to SSRN The Similar Cost and Other Advantages of an Early Offer Reform for Products Liability Claims for Personal Injury Compared to General Liability Claims Therefor.  Here is the abstract:

An “early offers” program in which product liability lawsuits could be quickly settled would improve a tort system that is often slow, expensive and unfair.

Under the authors’ early offer reform, a defendant facing a personal injury claim is given the option within 180 days after a claim is filed of offering to guarantee periodic payments for a claimant’s medical expenses and wage loss beyond any other applicable coverage, plus 10 percent for attorneys’ fees. There would be no compensation for pain and suffering. The claimant in return agrees to foreclose further pursuit of a normal tort claim for both economic and non-economic losses.

Offers could be turned down by claimants, but only in cases where the defendant’s injurious acts were the result of gross misconduct provable beyond a reasonable doubt.

The early offers plan would reduce the time it takes to pay losses by at least two years, and also greatly reduce the costs of such claims. Claims for product liability, would be cut by an average of approximately $129,105 per claim and by $563,000 per claim for severe injuries. The early offers plan is projected to save an average of approximately $33,000 in legal expenses in all such cases and about $207,000 in cases of severe injury.

The savings come mainly from eliminating pain and suffering damages and reducing legal fees.


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