Justinian Lane

Lawrence McQuillan Just Can’t Stop Making Stuff Up

I wonder if Lawrence McQuillan of the Pacific Research Institute spent more time making up his fictional study of tort costs, or defending his study against those who expose it for being the sham that it is?  I've lost track of all the letters-to-the-editor I've seen by McQuillan that attempt to prop up his rickety study.  Here's an excerpt of another one that McQuillan wrote in response to Ralph Cook's letter to the editor

Cook stated that a Tillinghast-Towers Perrin report contains "a long list of costs not at all associated with the civil justice system." We disagree.

The report includes costs such as fender-benders and insurance CEO salaries, as Cook mentioned, because it is a comprehensive accounting of direct tort costs. Fender-benders are torts, and the tort-related portion of CEO salaries is an overhead cost of making tort-damage payments. (Emphasis added.)

Source: Your views-

Funny - whenever I look at an annual report of an insurer, it doesn't break down it's CEO's compensation by "tort-related" compensation.  What the hell is that supposed to mean, anyway?  Does that mean that if 25% of an insurer's business is based on liability insurance that 25% of the CEO's salary is tort-related?  Or is it a measure of how much time the CEO spends tending the liability portion of the business?  If so, did insurers send McQuillan the timecards for their CEOs?

I think I've got it! The "tort-related portion of CEO salaries" is just a meaningless term that McQuillan made up to hide the fact his meaningless study relies on meaningless information to come to a misleading conclusion! 

McQuillan and the PRI have been taken to task by many leading economists, scholars, and jurist.  Judge Richard Posner wrote a scathing critique of their study, and he used phrases like "adding apples and oranges," "assume without evidence or analysis," and "fictitious."  Some of the better portions of Posner's critique are below:

"...It is impossible to determine from Tillinghast-Towers Perrin’s report what the sources for most of its data are, and so the figures I have quoted must be taken with a grain of salt; indeed, so far as I can tell, they may be completely unreliable. They are almost certainly exaggerated, given the financial connection between the firm and the insurance industry...

...The authors of Jackpot Justice know the difference between a cost, which in economic terms is a reduction in the amount of valuable resources, and a transfer of wealth from one person to another that doesn't reduce the total amount of resources but merely redistributes them. The $128 billion figure is a transfer, not a cost...

...The sum of $328 billion and $359 billion is $687 billion, which is almost $200 billion short of the authors' grand total of $865 billion. The excess malpractice costs and accidental-death costs they estimate at less than $50 billion, so there is still a big gap. I can't figure out how they fill it....

...The figure, however--the authors' estimate of the net social loss created by our tort system--is, as I have tried to show, fictitious."

Source: The Becker-Posner Blog: Is the Tort System Costing the United States $865 Billion a Year?--Posner

I wonder if McQuillan includes the cost of preparing his propaganda about the tort system in his estimates of the cost of the tort system? 

Cross-posted to Corpreform

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Posted at 10:12 AM, Jun 17, 2007 in Tort "Reform" Myth-Busting | Tort "Tax"
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Posner has no credibility. He is a member of the hierarchy of the criminal cult enterprise that is the lawyer profession.

He fails to mention the Rent Seeking Theory in his textbook. This theory explains all goofiness in lawyer policy making. The omission is law and economics malpractice, since the theory is taught in high school economics.

If he thinks torts are useful, he forgot to advocate ending the self-dealt immunities of lawyers and judges from liability to adverse third parties. Let him pay for judge malpractice insurance, waive his self-dealing immunity. Then, I will gladly listen to anything he says.

To Judge Posner's credit, he has not deleted my remarks from his blog, as most cult indoctrination victims have.

[Justinian: I don't share your opinion of Posner. But since his critique of the study is economic and not legal, perhaps you should give it another look. Whatever you may think of Posner, I'm pretty sure you'll agree his math is correct.]

Posted by: Supremacy Claus | June 17, 2007 11:16 AM