[skissane]

Well, I'm not in America, and I'm wondering if this is an American thing?

I just checked my insurance policy. The word "trampoline" never once occurs in it. I don't think my insurer cares about trampolines.

If I think about it: given the absurdly large payouts for some injury lawsuits in the US, I understand why American insurers might be particularly sensitive to things that might induce injury, like trampolines. Given Australian courts tend to be much more modest in the damages they award, I can see why Australian insurers might not see them as something worth paying any special attention to.

Also, even in the US: it might seem obvious to someone who grew up there, but for an immigrant from a country with a different insurance system, it wouldn’t be obvious

[Eisenstein]

To explain the lawsuit issue, here is a perfectly plausible scenario and how it could play out somewhere in the USA.:

1. A person is at a friend's house for dinner

2. Upon leaving to go home, they trip and fall trying to navigate an unlit path to their car

3. Their injury lands them in the hospital and requires a week or so of recovery time in which they could not work, and as they contract out they lose that money

4. The health insurance that fully covered their injury, looks at the medical records and finds that the injury occurred on another property and calls the people involved and finds out about the unlit path

5. They deny payment for the medical treatments and tell the injured person to sue the friend for medical payment because they are at fault and they have home owner's insurance

6. Forced to sue the friend or be out tens of thousands of dollars, the injured person adds to the claim for lost wages (hey, the friend isn't paying for it anyway, the insurance is)

This is how you end up with such lawsuits that the USA is famous for -- people are forced to sue other people in order to not go bankrupt, and things get piled on that.

[nothercastle]

It’s critical in the USA to never tell your health insurance that you got injured in a way that may cause them to sue. Because health insurance is not actual insurance it’s almost always best to assume fault for your injury.

[tptacek]

I mean, sure, but really the simpler issue --- and this is an issue in Australia too, but I don't know how it's handled --- is that some kid is going to double bounce on the trampoline at a party, land funny, break their neck, and be paralyzed for life. Average payouts for paralysis cases are in the high millions.

[skissane]

Nowadays, the way it is handled in Australia is significantly different, for two reasons (1) we have a national disability insurance scheme (NDIS), under which the federal government funds lifelong care for the disabled, irrespective of how the disability was acquired (accident, medical negligence or natural causes) (2) whereas in most American states tort law reform is merely a topic of perennial debate in which little actually changes, Australian states enacted major tort reform which significantly capped personal injury payouts. A big motivation for that was to control their own medico-legal risk due to the extensive public health systems they operate

[skissane]

> 4. The health insurance that fully covered their injury, looks at the medical records and finds that the injury occurred on another property and calls the people involved and finds out about the unlit path

In Australia, if you are seriously injured, you will be sent to a public hospital, where the government will fit the bill for your treatment. If it is a workplace injury or a motor vehicle accident, they might seek to recover costs from the compulsory private insurance in those cases, but otherwise they wouldn't. Many people also have private health insurance, but the private system usually doesn't get involved in accidents and trauma, it prefers to focus on things with greater predictability and profitability (e.g. hip replacements).

Every country is different, but I suspect in many other countries with either public or hybrid public/private systems, it is going to be a similar story

> This is how you end up with such lawsuits that the USA is famous for -- people are forced to sue other people in order to not go bankrupt, and things get piled on that.

It isn't just about lawsuits, it is also about damages payouts. In the US, there is a very broad constitutional right to a jury trial, which extends to civil lawsuits; and (in many cases) the law entrusts the jury, not just with deciding whether the plaintiff has factually proven their case, but also with awarding damages. American lawyers have mastered the art of emotionally convincing jurors to make big awards (especially if the defendant is a big corporation, or an unsavoury private individual). And big awards create precedent for bigger awards in the future. Even though judges can reduce jury damages awards, and often do, I think that only partly reverses the impact of juries in encouraging their growth. Also, the fact that many states have elected judges makes them hesitate about reducing jury damages too much, since that might offend the voters and threaten their re-election chances

Compare Australia: we also have a constitutional right to a jury trial, but it only applies to the most serious federal crimes; it does not apply to less serious federal crimes, nor state crimes (regardless of seriousness), and there is no constitutional right to a jury in civil cases. Sometimes, you can get yourself a jury in a civil case (depending on various complex legal factors), but in practice the majority of civil trials don't have one. And even when there is a jury, the norm is the jury only decides whether the plaintiff has proven the facts of their case, and damages is wholly up to the judge. Judges tend to be much more conservative in awarding damages, and as a result, the runaway damages inflation which has happened in the US, has been far less of a thing in Australia. And all judges in Australia are appointed (both state and federal), and the process is mostly insulated from politics, so Australian judges are far less afraid to offend public opinion

[Eisenstein]

> It isn't just about lawsuits, it is also about damages payouts. In the US, there is a very broad constitutional right to a jury trial, which extends to civil lawsuits; and (in many cases) the law entrusts the jury, not just with deciding whether the plaintiff has factually proven their case, but also with awarding damages.

The big damages are punitive damages, not damages for compensation. Since we have rather lax consumer protection laws we rely on the companies being afraid of having to deal with a huge lawsuit payout if they act suitably antisocial. Like the McDonalds hot coffee lady only asked for medical bills, but because McDonalds corporate refused to give her those, and continued to keep coffee boiling hot regardless of people getting injured that they knew happened constantly, because it made them money, the jury made it a point to award a ludicrous judgement to teach them a lesson.

[skissane]

Yes, it is the punitive damages which are really astronomically insane. But even merely compensatory damages in the US can be extremely high by the standards of other countries.

For example, in the 2014 Florida case Cynthia Robinson v. R.J. Reynolds Tobacco Company, et al, the jury awarded US$23.6 billion in punitive damages as well as US$16.9 million in compensatory damages, for the death of the plaintiff's husband, a smoker who died from lung cancer at the age of 36. I'm sceptical any Australian judge would ever award US$16.9 million (at current exchange rates, AU$25.7 million) compensatory damages for a single person's death. The trial judge cut back the astronomical punitive damages award, but left the compensatory award intact. In the end, the plaintiff never got any of that money (the appeals court ordered a retrial, on grounds unrelated to the damages, and the defendant prevailed at the second trial). Still, I think it goes to show, it is not just high punitive damages, high compensatory damages is an issue too.

[Eisenstein]

Pointing out outliers isn't really helpful when talking about what could be expected in an insurance claim.

[skissane]

Okay, but the point also remains with respect to averages.

For example, compare how the UK and the US handle compensation for lost future earnings in wrongful death cases. In the UK, judges are guided by the "Ogden tables", actuarial tables published by the British government. The judge will use the deceased's age to look up a multiplier in the tables, which will be multiplied by their income at the time of death, to derive a net present value of future earnings. While the tables are technically only a guideline, and judges have the discretion to deviate from them, plaintiffs rarely succeed in practice with convincing judges to do so.

By contrast, in the US, there are no such formal guidelines – it is largely determined by expert witness testimony before a jury. Expert witnesses have a lot of scope to argue for higher estimates, and often succeed in convincing a jury with those arguments. The result is unsurprising – compensation for lost future earnings is more generous in the US than in the UK.

http://ndl.ethernet.edu.et/bitstream/123456789/28878/1/53.pd...

[firesteelrain]

It is an American thing and the WSJ is generally American articles so you are going to get a lot of American-related responses.