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Editorial: Lawsuit trends vex employers

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Lawsuit trends have been a mixed bag for business over the past few months. The first half of 2017 saw a record number of federal securities class actions, with traditional shareholder lawsuits and merger and acquisition claims up significantly.

On the product liability side, as we report on page 20, pharmaceutical companies remain a prime target for litigation as plaintiffs allege a wide variety of missteps by the deep-pocketed pharma sector. Decisions favoring plaintiffs in litigation seeking to hold brand-name drug manufacturers liable for generic versions of their drugs, which they did not produce, and suits seeking to hold drug companies liable for opioid addiction are just a couple of worrying legal trends for the sector.

But in other areas, tort reform advocates and corporate defense lawyers have a fair amount to be pleased about. In its recently ended term, the U.S. Supreme Court limited various types of forum shopping in three decisions it issued. The rulings generally held that a company can’t be sued in a state if it’s not based there or an alleged injury did not take place there.

More generally, according to an analysis of data on tort lawsuit filings conducted by the Wall Street Journal last month, far fewer torts have been filed in recent years compared with the 1980s and 1990s — two in 1,000 people filed tort suits in 2015 compared with 10 in 1,000 in 1993.

According to the analysis, there are various reasons for the sharp decline, including restrictions on bringing litigation, the increased cost of litigation and improved auto safety.

And amid all the confusion surrounding health care reform in recent months, the House of Representatives in June passed a bill that would cap noneconomic damages at $250,000 in medical malpractice cases involving government programs. That’s at the low end of caps imposed in many states, and such a measure would have a hard time getting through the Senate, but its albeit limited progress may encourage more reform efforts.

Attempts to find corporations responsible for actions they are at best tenuously linked to continue to unnecessarily take up court resources. And some lottery-level damage awards are understandably labeled “excessive.” There’s a fine line between acting to unclog the courts and denying individuals their right to find powerful organizations accountable. Erring on the side of the individual should be the natural inclination in a free society; however, costs and resources must be considered, too.