By Allen Myers
Australian big business has a new worry, according to a feature article in the October 27 Bulletin. It's the "class action" lawsuit.
A class action suit is one in which all the people deemed injured by some action jointly sue the person or business allegedly responsible. For example, Sydney Water faces a class action suit by people who claim that they became sick or that their businesses suffered losses because of the water contamination scares earlier this year.
Big business's attitude to class action suits is sufficiently indicated by the title of the Bulletin article: "Screwing the system". The legal system, in the correct view of big business, was not set up to make businesses pay millions of dollars to people they have damaged. So if someone is making that happen, it's an abuse of the system.
But for those of us who aren't millionaire business people, anything seems welcome that undermines, even a little bit, rich people's monopoly of benefits from the legal system. Making corporations pay for — some of — their crimes appeals to our sense of justice. It may relieve those injured, and, just perhaps, the fear of lawsuits might restrain some companies from being quite as bad as they would otherwise be.
According to the Bulletin, last year a group of "business leaders" commissioned the Allen Consulting Group to study the US experience of class action suits. The US leads the world in this, and most other forms of resorting to the courts to settle disagreements.
The lesson from the US seems to be that the "little people" end up getting ripped off by the system even when it appears that they are winning. According to a Rand Corporation study, quoted in the Bulletin, plaintiffs who suffered personal injury or property damage received only 45% of the money spent on such cases. The other 55% went to court costs, insurance costs and lawyers' fees.
Moreover, big business soon finds ways, such as liability insurance, to pass the costs on to consumers — i.e., the rest of us: "In the US it has been estimated that the built-in cost of product liability insurance comprises 30% of the price of a stepladder, 33% of the cost of a light aeroplane, 95% of a childhood disease vaccine and 25% of a bus ride."
The legal system, like the rest of the system, is set up so that you can't win unless you're rich. For all the good work they do, organisations that rely on the courts to prevent or undo the damage caused by big business are nearly always at a disadvantage, and their victories are usually partial and short-lived. Exxon may have paid hundreds of millions of dollars in fines for the Exxon Valdez oil spill in Alaska, but it's still threatening the oceans and coasts with giant oil tankers.
The attitude of capitalists and their system is that you can pay for any damage you do (if you're caught and lose the court case), and that's the end of the matter. Dollars are the measure of everything, including damage and its repair.
For human beings, and the natural world we live in, it's not that simple. The aim should be to prevent damage, not to pay for it.
If a company is killing you with tobacco or asbestos, it may be some comfort to know that your relatives will get a lump sum, but that's not real compensation for them — let alone for you.
And which corporations should pay how many dollars, and to whom, if weather changes brought on by greenhouse gas emissions flood low-lying countries or increase the frequency and severity of drought and/or hurricanes? If the US government starts a nuclear war, deliberately or accidentally, can we sue?
So, yes, socialists certainly oppose any attempt by capitalists to escape legal liability for injuring people or the environment. But what's needed is a system — economic and legal — in which people, not money, are what matters.