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Congress deals a blow to class actions—but the basic tort system is unchanged

Dickie Scruggs, a Mississippi trial lawyer who led the charge against Big Tobacco in the 1990s, helping 46 states win a $246 billion settlement, once described the features of a “magic jurisdiction” in America’s tort system.

Speaking at an asbestos conference in 2002, he said that such a place would have judges elected with “verdict money”, trial lawyers who were cosy with those judges, and huge numbers of voters “in on the deal”. In this trial lawyers’ paradise, “cases aren’t won in the courtroom,” Mr Scruggs assured his audience. “They’re won on the back roads long before the case goes to trial.”

In the view of corporate America, many doctors and George Bush’s Republican Party, there are too many magic jurisdictions in America. Places like Madison County, Illinois, have become famous for awarding large punitive damages and for cosy relationships between trial lawyers and judges. They thus become magnets for class-action lawsuits, which bundle hundreds—even hundreds of thousands—of small claims that would not justify the costs of a stand-alone case. These suits have surged in Madison County from just two in 1998 to 106 in 2003.

The Senate passed the Class Action Fairness Act on February 10th.

Trial lawyers and Democrats have long protested that Big Business is exaggerating the woes of America’s tort system in order to tilt the system in favour of rich defendants. If so, this dastardly plan is certainly working. On February 10th, the Senate approved by 72 votes to 26 the Class Action Fairness Act, which is designed to push class-action suits away from places like Madison County to the fairer federal system. As The Economist went to press, it looked as if the House would pass the bill too, giving Mr Bush a chance to sign it into law when he returns from Europe.

One for the president

In political terms, this is a big victory for Mr Bush, who pushed class-action reform in his re-election campaign. He can also boast bipartisan support: 18 Democratic senators deserted the lawyers’ lobby, which has given their party so much. Indeed, in general the lawyers were out-muscled by the US Chamber of Commerce, which cleverly focused its fire on the former Democratic minority leader, Tom Daschle, last November, forcing this blocker of tort reform out of his seat in South Dakota.

Mr Bush and his business allies are now keen to move on to the other two parts of his tort-reform plan: sorting out the asbestos-litigation mess and medical-liability reform. But what exactly will this week’s new measure achieve? Opinion, inevitably, is split between lawyers, who think it goes too far, and reformers, who wish it had gone much further.

British MP George Galloway and his opponent the Daily Telegraph will leave no stone unturned to sort out what could be a spectacular libel case.

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