Steven I. Platt: Who should be bearing the burden of risk?

Beneath the headlines generated by the debate and the drama surrounding Gov. Martin O’Malley’s renewed legislative campaign to abolish the death penalty in Maryland, the lower-profile, but arguably more important economic issues that directly affect the citizens of our Free State who don’t commit or even contemplate capital crimes continue to be pressed in the chambers and committee hearing rooms of the Maryland General Assembly.

Legislation to change some previously long-standing economic relationships and the legal principles underlying and supporting them are being proposed and discussed so far largely outside the lens and scrutiny of the mainstream media except perhaps, notably this newspaper, The Daily Record.

The radar of most of our citizens, except those most directly affected (e.g., trial lawyers, transactional lawyers largely representing corporate and business organizations, and, of course, the business organizations themselves and their lobbyists who serve and advocate on behalf of Maryland’s diverse business community) have not been alerted, or if they have, they have not heeded the alert and focused on these potential economic quality of life changes being proposed. So, the debate to date has been by and between advocates for these special business and professional interests.

The legislation being proposed, which would alter long-standing economic relationships and the allocation of economic risk in our states, includes bills to change Maryland’s current tort law operating system of contributory negligence. This system bars the recovery of damages by any plaintiff who is at all responsible, as a result of his or her own negligence, for an event that injures him or his property to a comparative fault approach. There are also bills to maintain the contributory negligence system by summarily reversing any decision by Maryland’s highest court, the Court of Appeals, to change to a comparative negligence standard. That court is considering such a change in a case already argued before it and under advisement.

Other legislation that would change the allocation, regulation and management of economic risk in Maryland also includes proposals to dramatically depart from what is known as the traditional “American Rule,” which in a nutshell says that in America, which includes Maryland last I checked, absent a statute, rule of procedure or contract (agreement between the parties) stating otherwise, all litigants (win, lose or draw) pay their own attorneys’ fees and costs.

The legislation, HB 130, would implement the findings and recommendations of the Maryland Access to Justice Commission, introduced “By Request — Chief Judge, Court of Appeals,” drew early and sustained fire from expected sources and some not expected.

The Maryland State Bar Association Business Law Section Council weighed in early, on Jan. 28, in a letter to the MSBA Committee On Laws that makes recommendations to the Board of Governors regarding positions on legislation. That letter stated the economic opposition starkly as follows:

“Providing low-income Marylanders with access to legal counsel is a commendable goal, but HB130 presents a solution that would challenge Maryland’s economic well-being, competitiveness, and fiscal health.

“There are multiple issues with the Bill.

“First, it addresses a ‘problem’ about which the Commission made only a few, very general findings.

Second, it is very broad and will have a substantial effect on the level of litigation prosecuted against government and business in Maryland. This will, in turn, adversely impact public and private budgets, insurance costs; and the State’s reputation as a favorable environment for business.

“Third, it is not party neutral. It favors those constituencies represented by the few individuals in the [Access to Justice Commission] Subcommittee that crafted it.

“Fourth, it abandons the traditional American Rule that, for good reason, is as old as Maryland’s charter.

“Fifth, no one has assessed the potential consequences of passing such a Bill.”

This and other input led the MSBA Board of Governors to state its current opposition shortly thereafter, on Jan, 31, in a letter to Chief Judge Robert M. Bell and Access to Justice Commission Chairwoman Judge Irma S. Raker. The letter, signed by MSBA President John Kudel, stated in part; “The Board of Governors believes that as well-intentioned as this legislation may be, as drafted, the bill is overly broad and rather vague in terms of defining basic terms and legal concepts.” The Board then offered to work more closely with the Access to Justice Commission to “refine those terms and concepts.”

That work will have to wait because, as Kudel noted on behalf of the MSBA, “the bill as drafted would require so many amendments that it is unlikely that there is time remaining during the 2013 legislative session to address the concerns of all stakeholders subject to the provisions of the bill.”

When that work does take place, this writer hopes that members of the “Working Group” can leave their respective advocacy positions behind and recognize that the basic issue to be addressed is how to regulate fairly and efficiently what economist and writer Robert J. Samuelson described as the “uneasy relationship between capitalism and democracy.”

That means recognizing, as Samuelson points out, that capitalism “thrives on change such as new technologies, products and profit opportunities. Democracy, on the other hand, resists change — it creates powerful constituencies with a stake in the status quo.” However, capitalism, which Samuelson defines as “an economic system that relies on markets and private ownership” and democracy need each other. The one (capitalism) generates rising standards; the other (democracy) cushions capitalism’s injustices, which can be cruel and unmerciful and thereby anchors public support for business.

These proposals would reallocate risk from people harmed by predominately negligent parties to individuals or businesses more negligent than the plaintiffs; it would also shift the risks of litigation to Maryland’s businesses and its state and local governments. As we consider this, we should recognize what Samuelson describes as a “useful political lesson.”

“A successful democracy gives people a chance to protect their interests and lifestyles — but when these protections try to deny unalterable economic realities, they became self-defeating.”

Let’s hope our democracy stays successful despite ominous signs from Washington and that we can work together to ensure the fair and efficient management of risk in Maryland in the future.

Steven I. Platt, a retired associate judge on the Prince George’s County Circuit Court, writes a monthly column for The Daily Record. He can be reached at [email protected].