Posted on: Monday, January 3, 2005
State lawsuits down by more than 13%
• | Mediation of cases rises in popularity |
By Ken Kobayashi
Advertiser Courts Writer
Lawsuits filed in state circuit courts dropped by more than 13 percent last year, continuing a downward trend the past several years, an Advertiser review of the annual judicial reports shows.
Lawsuits in Circuit Court are for disputes involving amounts of more than $10,000. They include suits over personal injuries and deaths, property damage, contract disputes, motor-vehicle crashes, foreclosures and appeals from state, city and county agencies. Lower amounts are handled by the district courts, which have also seen a decrease in the number of suits filed. Judiciary officials, however, aren't so sure about quicker justice. Judiciary spokeswoman Marsha Kitagawa says the impact is "extremely difficult" for the judiciary to determine because the judges' workload is affected by several factors, including the "complexity of cases and contentiousness of the parties." In addition, the civil circuit judges also handle matters such as probate outside the civil case filing category, she said.
While members of the legal community cannot point to a single reason for the drop, they cite an improving economy in which people are less likely to file lawsuits, a decline in foreclosures because of rising real-estate values and more nonjudicial foreclosure cases, changes in the law for personal injury lawsuits and the growing popularity of mediation to resolve disputes.
For the fiscal year ending June 30, 2004, 3,643 circuit court lawsuits were filed, down from 4,133 in the previous fiscal year and 6,000 to 8,000 filed each year in the 1990s, an Advertiser review of the annual judiciary reports show.
"It doesn't seem like a litigation explosion," says Richard Turbin, Hawai'i State Bar Association president, speaking as a Honolulu personal jury lawyer and not for the organization. "It's a litigation implosion."
The lawsuit numbers are counterintuitive, given that Hawai'i's population of 1.2 million has been increasing over the years; the number of active lawyers practicing here has increased only slightly from 3,655 to 3,886 over the past decade, and Mainland jurisdictions have seen an increase in civil case filings since 2000.
Nationally, 16 million civil actions were filed in 2002, an increase for the second straight year after fluctuations during the previous eight years, according to the latest statistics from the National Center of State Courts. But with circuit lawsuits in Hawai'i, the numbers have generally decreased, with significant drops in recent years that correspond with the recovering economy.
"People aren't as anxious to pursue claims and lawsuits," says Keith Hunter, president and chief executive officer of Dispute Prevention and Resolution Inc., the state's largest company providing arbitration and mediation services.
The number of foreclosures has also plummeted with rising home values giving owners a chance to sell and pay off the mortgages. The recent popularity of nonjudicial foreclosures also contributed to the decrease. In those cases, lenders and mortgage companies can foreclose on homes without going to the courts for assistance.
Only 490 foreclosure suits were filed in fiscal 2003-04, compared with the roughly 2,000 to 3,000 filed each year following the downturn in Hawai'i tourism after the first Gulf War and the bursting of the Japanese investment bubble, according to judiciary statistics office.
Lawyers who represent plaintiffs over personal injuries and deaths say tort reform in response to fears of the litigation explosion has also made it less desirable to file lawsuits. At times, it's simply not economically feasible for the client to file the suits, they say.
In the past fiscal year, 835 lawsuits involving auto accidents were filed. That compares with 1,744 in 1994-95 and 1,533 in 1995-96 before the number dropped to the 900-plus each year from 1998-99 to 2002-03.
Turbin says a 1998 tort reform law in automobile cases allows insurance companies to get up to $10,000 of an award to help reduce auto premiums for others. As a result, if a person suffers an injury and gets a $30,000 award, the individual may end up with only $3,000 after court costs, the insurance deduction and attorney fees, a strong disincentive for filing a suit, he says.
John Komeiji, a former Hawai'i State Bar Association president who works for a firm primarily representing civil defendants, says he thinks the changes in the law have reduced the number of auto lawsuits. "I think from a financial standpoint, it makes more sense to settle early (rather than filing a lawsuit)," he says, especially for routine fender-bender and minor injury cases.
Mediation is also cited by many lawyers as a factor. Hunter says more businesses are including mediation and arbitration clauses in real estate, construction and stock brokerage contracts. Insurance companies are also turning to mediation to resolve claims, he says.
Hunter says his organization has also seen an increase in mediation to resolve disputes before they go to court and while pending in court. At his office, four to six sessions are going on each day, he says.
Reach Ken Kobayashi at kkobayashi@honoluluadvertiser.com or 525-8030.
Some lawyers believe the drop could signal speedier justice with court cases getting resolved more quickly. "With the numbers down, judges are still going to be plenty busy, but it will speed up the trial and appeal process," says Rick Fried Jr., one of the leading plaintiff lawyers in Honolulu. "In my view, delayed justice for the badly injured is not justice."
Lawsuits defined
The latest figures are from the judiciary's recently released annual report for fiscal 2003-04.