Can you sue God?

Damages imposed aren’t always compensatory and there is a punitive element too. People may have forgotten about Stella Liebeck,but there are annual Stella Awards,inspired by that judgment. In 1992,Stella was 79 and sued McDonald’s in New Mexico,winning $2.9 million in damages. She purchased coffee,took the lid off the container and while driving,placed the container without the lid between her knees. McDonald’s was blamed for the subsequent scalding. In 2008,here are the winners of the Stella Awards. Kathleen Robertson from Austin (Texas) was awarded $80,000 when she broke her ankle inside a furniture store. She had tripped over a child who was running around inside the store and this child happened to be her own son. Carl Truman from Los Angeles was awarded $74,000 plus medical expenses because his neighbour ran over his hand with a Honda Accord. What was a hand doing under the wheel of a car? Carl was trying to steal his neighbour’s hub-caps and hadn’t noticed his neighbour was at the wheel,about to drive away.

Terrence Dickson from Bristol (Pennsylvania) won $500,000 from an insurance company for mental anguish. He had entered a house through a garage to burgle it and got stuck in the garage. The garage door that led out was automatic and had locked itself,so had the entry to the house from the garage. Terrence was stuck in the garage for eight days,surviving on a case of Pepsi and a bag of dry dog food. The house-owner’s insurance company was clearly responsible. Jerry Williams from Little Rock (Arkansas) was awarded $14,500 plus medical expenses when he was bitten on his backside by his neighbour’s beagle. The beagle was chained inside the neighbour’s yard and the yard was fenced. However,Jerry had climbed over the fence into the yard and was shooting the beagle with a pellet gun. Amber Carson from Lancaster (Pennsylvania) got $113,500 from a restaurant in Philadelphia. She slipped on a spilled soft drink and broke a bone. The soft drink had been spilt because Amber had argued with her boyfriend and had just thrown the bottle of soft drink at him. Kara Walton from Claymont (Delaware) successfully sued a night-club for $12,000 and medical expenses. She fell from the bathroom window to the floor and lost two front teeth. She had climbed up to the bathroom window and was trying to escape through there in an attempt to avoid paying the night-club charges.

Mery Grazinski from Oklahoma City bought a “Winnebago motor home”. After a football game,she was driving home. Setting the “motor home” on cruise control at 70 miles per hour,she left the driver’s seat and went to the back to make herself a sandwich. The “motor home” went off the freeway,crashed and overturned. There was clear negligence,since the user’s manual didn’t specify one couldn’t leave the driver’s seat when setting the Winnebago on cruise control. Mery obtained damages of $1.75 million and a new “motor home”.

The mind boggles because tort jurisprudence is relatively underdeveloped in India,though there have been instances (environment,MNC liability,tort against government by employees,rape,sexual harassment,violation of human rights,Uphaar). There isn’t any specific statute on tort,although such codification was suggested as early as 1886. However,there are other statutes that tangentially affect tort (public liability,environment,consumer protection,human rights,pre-natal diagnostics,motor vehicles). With or without codification,tort law is largely case-driven and the point is that globalisation also globalises and standardises types of cases and perhaps even influences the philosophy behind rulings.

Intellectual property is an instance. At the risk of being misunderstood,corporate law,everywhere in the world,is increasingly gravitating towards the American model,though we are thankfully far away from Stella Award kind of judgments. Other than tort,we don’t have a tradition of class action either,even if the principle has been recognised by courts,especially in consumer and environment-type cases. Once company law is amended,as is proposed in the pending bill,share-holders will be able to bring class action suits against companies (and their management).

Meanwhile,Satyam Computer’s American Depository Receipts (ADRs) face class action in the US. At the last count,11 separate class action suits have been filed (by law firms Dyer & Berens,Brualdy,Brodsky & Smith,Glancy Binkow & Goldberg,Federman & Sherwood,Harwood Feffer,Pomerantz,Finkelstein Thompson,Sarraf Gentile,Vianale & Vianale,Izard Nobel),not just ones reported in media. These will certainly be eventually clubbed and there is the near-certainty of more law firms chipping in. Since Satyam was listed in New York and there was no subsidiary company (registered separately) insulated from the parent company,there is no reason why these shouldn’t be admitted. American courts do seem to have jurisdiction,on civil remedies.

We still don’t know whether claims will be admitted against Satyam or its directors and if it will be possible to argue Ramalinga Raju acted outside his official capacity,an argument that will find few takers. It is certain no insurance was taken against this eventuality and while new management and possible acquirers will be insulated from prosecution,Satyam Computers will still have to pay and,but for bankruptcy,this can be considerable,especially in view of the American tradition of punitive damages. Jury trials can be disastrous. Directed mediation through out-of-court settlement is preferable.

The writer is a noted economist

express@expressindia.com