You cannot use a sled in Denver city parks. You cannot have a baby delivered in Monroe County, Ala. You cannot buy any of the 58,000 published copies of Barbara Hutton's biography.
If you have the stomach upset known as hyperemesis, you cannot get the pill that is certified as safe and effective against it. You can no longer buy the classic Jeep sedan, an automotive best-seller for four decades. You may not find a fireworks display next Fourth of July. You cannot set foot on dozens of the finest hiking trails in Yellowstone National Park.
This multifaceted list of "Thou Shalt Nots" stretches across the spectrum of modern life. Yet each of these diverse prohibitions, and many others as well, stems from the same central problem, a problem that will be one of the preeminent legal, economic and political issues of the late 1980s: the civil liability crisis.
Alone in the developed world, the United States today faces an excess of business, governmental and personal liability, and an acute shortage of insurance to cover it. The American insurance industry can't, or won't, provide all the coverage needed, and the big "reinsurance" firms abroad can't, or won't, take up the slack.
The resulting imbalance between demand and supply is as severe and as far-reaching as the oil shortages that plagued the nation more than a decade ago.
This year's equivalent of the frustrated motorist waiting hours in line to buy a few gallons of gas is the frustrated doctor, business owner or government official shopping for weeks to find a few more months of liability coverage. This year's equivalent of the "Out of Gas" sign taped to the pump is a curt message stamped across last year's insurance policy: "Not Renewed."
Many insurers have stopped selling some lines of coverage. Day-care centers, bars, bus lines, chemical companies, nurse-midwives and commercial fishing companies, among others, are being "nonrenewed" by their insurance carriers.
Where insurance can be bought, it is often at hugely increased prices. The Southern California Rapid Transit District had no increase in accidents last year, but its insurance premium went from $67,000 to $3.2 million -- a 4,700 percent jump in one year. If the oil industry were to raise its prices by the same rate, a gallon of "inexpensive" gas would cost $47.
The liability insurance shortfall comes as an acute blow in a society where the legal notion of "liability" has been expanding broadly. Legislators, judges and juries have been pushing out the frontiers of responsibility, so that individuals, businesses and public agencies are being required to compensate injured people more readily, and more generously, than ever before.
The insurance famine has not directly affected individuals as yet; house, car and personal liability policies are still generally available.
But individuals will clearly bear the cost of the liability crisis. Consumers will pay higher fees for health care, education and entertainment, higher state and local taxes, and higher prices for everything from fish fillets to fire extinguishers.
Society will bear the cost in the form of the countless products and activities -- including all those "cannots" listed above -- that are no longer available because they can't be insured. And society will suffer through the chilling of the entrepreneurial spirit that must result if insurance is unavailable for new goods or services.
Predictably, the liability issue has sparked a major political battle. But the political system has been unable to agree on a fix because there's no agreement on what is broken. Some people talk of a "tort crisis," some see an "insurance crisis" and some speak of an "attitudinal crisis" in a society that has rejected the old virtue of keeping a stiff upper lip and now demands total redress for every hurt.
Insurance crises have hit the United States before -- this is the third in two decades. The last one was in 1975-76, when the nation faced a shortage of medical malpractice and product liability coverage. The current crisis, though, is broader and deeper than past ones.
"This time, the impact is much greater," said Victor Schwartz, a Washington lawyer who is an author of a leading tort law textbook known in the legal trade as "Schwartz on Torts." He said, "It reaches every business, every profession and every level of government. It goes to product liability, malpractice, municipal liability, drugs, toxics -- just about everything."
The shortage of malpractice insurance this year has hit not only doctors and lawyers but also architects, accountants, authors, engineers, ministers. In New Jersey, even insurance agents are receiving nonrenewal notices on their professional "errors and omissions" coverage.
As a result, some professional services once taken for granted are becoming scarce. Physicians from central Manhattan to several counties of rural Alabama have stopped delivering babies because of the high premiums on insurance coverage for the procedure. Some pregnant women in Montrose, Colo., must make a two-hour trek to Grand Junction when the baby is due because most of the doctors in Montrose have quit delivering babies.
Liability law has even reared up against Melvin Belli, one of the nation's most prominent liability lawyers. The San Francisco attorney who is often billed the "King of Torts" is the defendant in a $5 million malpractice suit brought by a former client. Belli, in turn, has sued the ex-associate in his firm who represented the dissatisfied client.
The crunch has hit not only small businesses such as bars and skating rinks but giant national firms: auto and aircraft makers, drug and chemical companies, retail chains.
Companies are responding by curtailing or eliminating products and services that cost too much to insure.
Cessna Aircraft stopped production of five small plane models because insurance costs priced them out of the market. The last American Motors "CJ" (Civilian Jeep) jeep sedan rolled off the assembly line last month. After 46 years of popularity, the model was discontinued, in large part because its high center of gravity made it a target for so many liability suits that American Motors could no longer afford to carry product liability insurance.
Governmental liability coverage -- when it can be purchased at all -- is so expensive that taxpayers in some towns this year will likely shell out more for insurance premiums than for basic services such as police and fire protection.
A dozen states and hundreds of city governments have lost all or part of their liability insurance coverage in the past six months; the result has been temporary or permanent elimination of municipal services.
The mayor of Collegeville, Pa., shut down the local police force in December when coverage was canceled. They were taking no prisoners in Lafayette County, Mo., for seven weeks because the county board couldn't get liability coverage for the jail. The jail finally joined a self-insurance pool with other "nonrenewed" counties and reopened last month. Lacking liability coverage, Denver has banned all sleds and tobaggans from public parks in that winter sports capital. The city council feared a crippling liability judgment if a sledder were injured on city snow.
The federal government is mainly self-insured. But federal agencies, too, have changed or curtailed functions and services because of the threat of liability.
At Yellowstone, for example, rangers have closed nearly a quarter of the famous park to keep people away from grizzly bears. This was done partly to protect the bears, partly to protect park visitors and partly to protect the government from liability actions.
The National Park Service already faces a liability suit brought by a hiker who was mauled by a grizzly in Glacier National Park in 1984. "If they lose that suit, I'm afraid they're going to take all the grizzlies out of Yellowstone and Glacier and ship them to Alaska," said Terry Anderson, an economist and naturalist at Montana State University. "They've spent years trying to save the grizzly in Yellowstone, and now a lawsuit could undo the whole program."
The expansion of personal, corporate and governmental liability and the contraction of insurance have a salutary effect in one regard: the liability crisis is making the United States a safer country.
"The evolution of the substantive law . . . has brought safety to the living standards of America and created the highest safety standards in the world," Sen. Ernest F. Hollings (D-S.C.) said.
A familiar example of the increasing concern for public safety is the demise of an American tradition called "happy hour." Fewer and fewer bars hold out the lure of cheap or free drinks to attract customers during the afternoon drive home from work; bar owners are afraid to have happy hours because they might be held liable for enormous damages if a customer drives off drunk and causes an accident.
The development and expansion of the bartender's responsibility for his customers' accidents demonstrates the kind of growth that has occurred throughout liability law.
The basic concept traces back to the early days of the automobile. A few progressive state legislatures enacted statutes known as "dram shop" laws ("dram shop" is an old English term for bar) requiring an innkeeper to pay damages to the victim of a crash caused by a driver who left the bar drunk. The rationale was that the negligent bar owner might have a "deeper pocket" than the the customer and was thus in better position to compensate an accident victim.
Once unusual, this form of third-party liability now applies in nearly every state; in many jurisdictions (including the District of Columbia), judges have imposed the liability even where the legislature has not passed a dram shop act.
Initially limited to bartenders, the scope of the liability was gradually increased to cover liquor stores, hotels that provide drinks via room service, businesses that host after-work social functions and individuals who let guests drive away intoxicated from a cocktail party.
Initially restricted to automobile accidents, "dram shop" liability was extended to cases where the drunken patron shot someone in the bar, then to shooting cases outside. A recent treatise in American Law Reports includes a long roster of other circumstances where the third-party liability has been applied: "fighting," "starting fire," "pushing party on stairs," "friendly scuffle," "door closed on finger" and so on.
Much of the expanded liability -- in dram shop cases and countless others -- has been borne by insurance companies. One of the explicit messages of the current insurance shortage is that the insurers are no longer willing to accept continually expanding liability.
Faced with reduced liability coverage, governments and businesses are taking steps to reduce their exposure.
This movement has prompted the emergence of a new professional discipline called "risk management." Today nearly every large business and every governmental body from medium-size on up employs "risk managers." Their job is to search out potential hazards in corporate and governmental activities and eliminate the risks before someone gets hurt and someone else gets sued.
You can see the results everywhere. Next time you're in a hardware store, look at the complex new safety switches built into virtually all power tools. Next time you enter a hotel room, look up at the ceiling: You'll see sprinklers and smoke alarms that probably weren't there before the November 1980 fire at the MGM Grand Hotel in Las Vegas and the large liability settlements it spawned. Next time you see a delivery truck backing into the loading alley, listen for the beep and watch for a "navigator" on the street guiding the driver. Many trucking firms now refuse to let their drivers back up unassisted, and most big trucks come with a "beeper" that sounds a warning whenever the transmission is put into reverse.
The results of such "risk management" initiatives can be dramatic. After Charlotte-Mecklenburg County, N.C., set up a risk management agency and strong safety rules, injuries dropped markedly. The county's workman's compensation bill fell 52 percent in four years. Its auto liability payments (for accidents caused by county vehicles) fell 62 percent, all at a time when population and county services were growing.
Nearly every observer of the liability crisis agrees that the United States has a long way to go in improving risk management practices. But no society can be made risk-free. Accordingly, insurance remains a vital commodity for the nation; right now, it's a commodity in acutely short supply. The shortfall will be felt in numerous aspects of daily life.
"An insurance shortage," said Robert Hunter of the National Insurance Consumers Organization, an Alexandria-based interest group, "is just as critical to our society as an oil shortage. Without insurance, the whole economy just grinds to a halt."
NEXT: Causes of the crisis