Posts Tagged ‘Michigan’

A reader query on Michigan fee-shifting

Reader B.B., an attorney, writes:

In Michigan, the American Rule for paying attorney fees has been abolished in civil cases valued at more than $25,000 when filed. I am curious whether anyone has done an analysis to see if this has changed the cost of medical care in Michigan and states that have similarly adopted “loser pays” procedures. I often hear the argument that this is a needed reform, but I never hear an analysis of how this reform has worked where implemented.

In Michigan civil cases valued over $25,000 when filed are argued before a three-attorney panel during pre-trial proceedings. The panel then assigns a value to the case. If both parties accept that value, the case is settled. If either party rejects that value, that party must do 10% better than that value at trial, or they are deemed to have lost, and then they pay the other side’s attorney fees. A plaintiff could get a jury verdict of $100,000 and be deemed the loser if he rejected an award of $90,909.10 or more. This system can be far more punitive than the English Rule.

The problem with any system that shifts the burden of paying for attorney fees to the loser is that it disproportionately impacts the middle class. A poor person does not have to worry about becoming liable to pay the other side’s attorney fees because they don’t have it and the insurance company won’t pursue it. If the insurance company attempts to take what little assets they might have, they will just file for bankruptcy. The insurance company does not have to worry about becoming liable to pay attorney fees because it is a cost borne equally by all insurance companies that do business in Michigan. They just price that risk, like every other risk, into the insurance premium. Only a person who has assets that would not be protected in bankruptcy, and is not wealthy enough to risk paying the other side’s attorney fees, is impacted by a system that shifts the burden to the loser.

So those would be two interesting questions for anyone concerned about the issue to consider: Have “loser pays” systems actually changed medical costs in states that have adopted them, and can “loser pays” systems impact enough litigants to have any effect at all?

Reactions from readers knowledgeable about Michigan legal practice?

Everything you know about Flint water is wrong

“Reference levels” aren’t poisoning, Flint at the height of the episode had lower blood-lead incidence in children than many other communities large and small, the number of cases with lead exposure calling for therapeutic measures appears to have been zero, and so forth. “It is not possible, statistically speaking, to distinguish the increase that occurred at the height of the contamination crisis from other random variations over the previous decade.” In short, everything you know about the Flint water episode is wrong. [Hernán Gómez and Kim Dietrich, New York Times; earlier here, here, and here]

“Guardians from Hell”

More, this time from Michigan, on how guardianship in the wrong hands can turn into a “completely legal, utterly grotesque system for undermining the rights of the elderly,” cutting out kids and legitimate heirs. Last fall the New Yorker ran a chilling investigative piece by Rachel Aviv exposing guardianship abuses in Nevada. [Gretchen Rachel Hammond, Tablet; coverage last October of the Rachel Aziz piece]

Liability roundup

“Local Governments and Occupational Licensing Absurdity”

“The proliferation of state licensing requirements is already bad enough. There’s no need for cities to pile their own mandates on.” Detroit, which requires licenses for at least 60 occupations, is among the worst offenders. [C. Jarrett Dieterle, Governing]

Also in Michigan: “Shampooing Hair And Piloting Commercial Airliners Require Same Number Of Training Hours In Michigan” [Michigan Capitol Confidential]

Police roundup

  • BBC on Baltimore police gun trace task force scandal [Jessica Lussenhop] Didn’t even bother using the real kind: “Baltimore Cops Carried Toy Guns to Plant on People They Shot, Trial Reveals” [Drew Schwartz, Vice]
  • Kentucky state police to media: do not put anything out about our investigations on social media “until OUR (KSP) press release is sent out.” Really? [Scott Greenfield]
  • “In unmarked cars, Orlando, Fla. officers box in car whose occupants are suspected of not wearing seatbelts; the driver drives off; the police catch up, ram the car, and shoot the driver dead. Allegation: Contrary to the officers’ testimony, the driver wasn’t about to run over an officer when he was killed; he couldn’t have, as the car’s engine had died after police rammed the vehicle. Eleventh Circuit: Qualified immunity. (H/t: Police4aqi.)” [John K. Ross, “Short Circuit”]
  • Police unionization may increase misconduct: “Our primary result is that collective bargaining rights lead to about a 27% increase in complaints of officer misconduct for the typical sheriff’s office.” [Dhammika Dharmapala, Richard H. McAdams, and John Rappaport via Jonathan Adler]
  • Dept. will publish accounts of misconduct investigations, but with names of officers omitted: “NYPD Argues They Simply Can’t Be More Transparent About Its Violent Cops” [Molly Osberg, Splinter News]
  • Michigan: “Seven Current and Former Police Officers Charged with 101 Felony Counts related to Fraudulent Auto Inspections”
    [Attorney General Bill Schuette]

Occupational licensure reform advances

“The Latest On Occupational Licensing Reform: At the federal level and in the state of Michigan, there have been encouraging moves toward market liberalization.” [Thomas A. Hemphill and Jarrett Skorup, Cato Regulation mag] Related: George Leef, Regulation (reviewing “Bottleneckers” by William Mellor and Dick M. Carpenter II). “Florida Lawmakers Are Fast-Tracking Licensing Reforms” [Boehm] “But sadly Elias Zarate is no closer to being a barber, because he still doesn’t have a high school diploma. And, yes, that matters for some reason.” [same] “Inside the Insane Battle Over Arizona’s Blow-Dry Licensing Bill” [same] “Tennessee has imposed nearly $100K in fines for unlicensed hair braiding since 2009” [Debra Cassens Weiss, ABA Journal] Licensing bars on applicants with criminal histories, often related hardly at all to the risks of crime in licensed occupations, make re-entry of offenders harder [Arthur Rizer and Shoshana Weissmann, The Blaze] A Twitter thread on board certification of music therapists, which are licensed in 10 states [Shoshana Weissmann et al.] Study: “optician licensing appears to be reducing consumer welfare by raising the earnings of opticians without enhancing the quality of services delivered to consumers.” [Edward J Timmons and Anna Mills, Eastern Economic Journal]

Eyes on the community, and your business must participate

The city of Saginaw, Mich. has ordered businesses in a long list of categories, including bars, phone sellers, and secondhand merchants, to install video surveillance systems whose output is to be made available on demand to the police [Isis Simpson-Mersha, MLive via Scott Shackford, Reason] Earlier proposals in Detroit and Maryland called for requiring gas station owners to install surveillance video systems, but this extends the idea to many other types of business.

Occupational licensure roundup