The review was written in 2006, so some of the reference links may not be active.
The Story
Unlike many John Grisham books, this is a book on rise and fall of an OPD lawyer who has achieved fame in a very short duration by playing the nuances of the “US Tort Laws”. However, this fame does not stay long with him and he finally loses out on various cases and declares bankruptcy with eighteen months of operation. Life of extravagance and vulgar display of wealth has acted against his favour in achieving what otherwise could have been a useful means to achieve success in the arena of tort claims. For a lawyer who has never fought a single tort case in the courts this is story of short lived success in showing lack of mastery to the art. In this article I would like to emphasize mostly the legal aspects of various cases discussed in the book, if there are any illegalities that were committed and how could have been avoided for the successful running of the business. However, the author’s lucidity of presentation, impeccable style of delivery though appreciated will not be the major means of evaluation in this article. The twists and turns of the story and relationships of various threads of flow of story again will not be a major consideration in this discussion.
Tort Law: An Overview
Torts are civil wrongs recognized by law as grounds for a lawsuit. Torts are wrongs which are covered under no contractual agreement of the victim and the defendant. These wrongs result in an injury or harm constituting the basis of a claim of the injured party. The primary aim of the tort law is to provide relief for damages incurred and deter others for committing the same harms. The claimant may sue for an injunction to prevent the tortious conduct or for monetary damages. Among the types of damages the injured party may recover are loss of earnings capacity, pain and suffering, and reasonable medical expenses. They include both present and future expected losses.
Torts can be classified into three major categories:
Intentional Torts: Are wrongs which the defendant had known or should have known and are evident from their action or inactions.
Negligent Torts: Wrongs which the defendant did due to an act of negligence. Like a traffic accident due to over speeding.
Strict Liability Torts: This does not depend on the degree of carefulness of the defendant but are established when a particular action causes damage. A relevant example will be liability of producing and selling defective products.
In this book we see several of these operations committed at various degrees. Although, most of the torts committed can be classified into “Strict Liability Torts” some degrees of Negligent and Intentional Torts are being committed as well. The book is mostly inclined towards Tort Laws; some of the company law related violations are also seen on some places in terms of insider trading and other such scams.
The Cases
The following are the cases which are discussed as part of the story.
Unsaid firm (Philo) developed drug Tarvan and used it against drug addicts inducing the subject become blood thirsty and kill people after hundred days of treatment. An example of an intentional Tort.
Dyloft: A drug created by Ackerman Labs. The drug although was a boon for arthritis was soon found creating non-malignant tumours in the bladders of the victims.
Hanna Portland Cement Company: The company had a couple of batches of cement which was defective leading to cracks appearing on the walls of the houses constructed using the batch of the cement.
Maxtail: A drug for menopausal and post-menopausal women which reduced the risk of high blood pressure, hot flashes among women. This was considered a wonder drug with more than four million users in the market. The “American Council for Aging” conducted a research which was abandoned due to the stark findings that usage of the drug for more than four years increased the risk of breast cancer occurrences by 33%, heart attacks by 21% and strokes by 20%.
Other cases which are not directly related to tort but to the company law are:
FBI investigating on involvement of Clay in possible insider trading.
Carter senior’s losses of name and fame in the circuit and exile in an island.
We will be only keeping our discussion to the first 4 cases of the book and keep ourselves to the discussion on “Laws of Tort”.
Case 1. Tarvan
Victims
The Drug Addicts who are treated with Tarvan
The People they used to kill at the end of 100 days.
Tortfeasers
The unsaid company may be Philo
Mode of Concluding of the Case
Out of the court settlement
The gainers
The company
Carter gets a huge sum of money to settle the case
Max Pace gets close the case without even anyone getting to know of the illegalities.
The losers
The poor drug addicts who are trialed in the court of law for no fault of theirs. No provision of damages are there for them, although they have been subjected to legal injuries
In short the case has an element of fraudulence in it.
The information of the effect of the drug was not public domain.
The company was aware of the potential negatives of the drug and yet they decided to bury the facts.
The lawyer (Carter) although was the defendant lawyer of the victims he was appointed by the company in no means would have worked for the best interest of the victims. So, all the cases would have been solved in the out of court settlements.
It was a case of fraud and misrepresentation.
There was no legal means of establishing the possible damages to be paid for the injury incurred due to planned out of court settlements with lawyer actually defending the tortfeasers.
The activity of the company was intentional in testing on human subjects even before a thorough investigation of the safety of the drug on humans. That makes them liable under the FDA’s guidelines.
Case 2. Dyloft
Victims
The patients who are treated with Dyloft
Tortfeasers
Ackerman Labs
Mode of Concluding of the Case
Out of the court settlement
The gainers
The company
Carter gets a huge sum of money to settle the case about 40% of the fees and a large amount of the stocks he has purchased during the Philo acquisition of Ackerman Labs.
Max Pace gets insider information or rather created insider information to get benefited from the stock market. This is a criminal activity as per the companies act and leading to imprisonment if proven.
The losers
The patients are compensated on the grounds that the chances of the tumours found being malignant are not high. But, the way the compensation was decided there was no significant study to suggest the malignant nature of the tumours.
Reversal of Fate
The end of the story of course goes to the victims and Carter is asked to pay back. But, if we look at the case as per the contract Carter seems to have settled rather cheap for the patients.
By settling the case out of the court the risk assessment of the damages has landed up within the scope of the Law Farm that Carter was heading. And he was sued by his clients as a negligence of duty on his part to settle for cheap.
Had the case gone to the courts Ackerman Lab would have been liable for the additional damage incurred due to the late findings of malignancy in the tumours. However, since the case was settled out of court the risk assessed by Carter’s Law Farm has come to legal binding with the clients to settle for a larger value for the damages, and all liabilities are to be borne by Carter and Co.
Bad financial planning has played an important role in settling this case in paying off to the malignancy victims from Carter’s farms.
Case 3. Hanna Portland Cement Company
Victims
People who bought the bad batches of cement and thus had houses with cracks
Tortfeasers
Hanna Portland Cement Company
Mode of Concluding of the Case
Out of the court settlement
The gainers
No One
The losers
The company
Carter
The victims
Employees of the company
This is how Tort has become a classic case of Lawyers home grown paradise and interest of the people is completely forgotten. Hanna Portland Cement was interested in settling out of court as the company was not in its best shape and to avoid bad publicity. They had extended a reasonable compensation plan for the victims who were acceptable to the victims and mason level support to set things right for the victims. Carter was interested to get his margins right and didn’t want to settle for anything that was not keeping in mind of the best interest of his clients. And as the company was in a financial turmoil it could not afford the damages liability claimed by Carter and of which a good 40% was planned to be Carter’s settlement fees. That was substantially higher than what the Cement firm could have paid for compensation. And the company went belly up and declared bankruptcy and thus created a lose-lose situation for all parties involved.
Case 4. Maxtail
Victims
Ladies who used Maxtail for post-menopausal relief
Tortfeasers
Company which manufactured Maxtail
Mode of Concluding of the Case
Court case for a similar case filed elsewhere
The gainers
The manufacturers of Maxtail
The losers
Carter and all his lawyer friends dealing with Tort cases.
The victims
This is a classic example of two fundamental mistakes for Carter.
To trade in an area which he did not ever defend in the court and thus depended on his circle of lawyers.
Put all eggs in one basket without mitigating risk factors involved while all his fellow lawyers were trading cautiously.
When Mooneyham lost the case, it was hard for Carter to even imagine of going for defending the case filed in New York. Lack of experience and his lack of knowledge in the whole game of Torts really showed up. More over he had also invested far more than that was expected from the case, knowing that the report which was the primary concern for the case was a debateable report.
Conclusion
Although the book can be considered as a good starting point to understand Tort, however it is far from being a true knowledgeable compendium for the Law of Tort. It shows various examples of Tort and how it has becomes a lawyer’s game to manipulate and get maximum mileage out of it. In no place there is clear legal definition or description which can be used as a basis to understand the law of Tort. In many places there is display of Carter’s extravagance and thus Grisham has kept the novel interesting with his masterful story telling. The thing that comes out most clearly is the whole system of Tort has become a lawyer’s tool to exploit companies and public in achieving their own monetary gains. And, due to this large insurance coverage are typical of such industries and they actually are passed on to the consumers which makes the products more expensive. The lawyers also start playing safe with larger insurance covers. Risk mitigation is becoming a large part of the business and reducing the share of true value adds to the product in its pricing.
Reference
Federal Statutes 28 U.S.C. Chapter 171 – Federal Tort Claims Act. - http://straylight.law.cornell.edu/uscode/html/uscode28/usc_sec_28_00002671----000-.html
John Grisham, “The King of Torts”, 2003
Theories of Tort Law, http://plato.stanford.edu/entries/tort-theories/
Encyclopaedia of Law and Economics, http://allserv.rug.ac.be/~gdegeest/tablebib.htm
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