you have a responsibility to follow what goes on, pay attention and have your voice heard. >> sean: thank you for being with us. and big thanks to frank and the politicians. >> john: warning, does not supply oxygen. why would people think it would? this is stupid warning.

>> the companies are so scared of these guys. >> guess what is yours? >> these are personal injury lawyers like helps get money to a blind man. poor man, he was blind and it worked. how blind is he? here he is driving a golf court. this woman says she can't work but then how can she do this? >> shakespeare brought, kill all the lawyers. sometimes i want to but we need lawyers. >> we do need lawyers to make sure we follow the guidelines. >> with w someone always going on doing something somebody needs to be defended right. >> we need lawyers but in america, we've got too much law. and that is our show tonight.

[ applause ] >> john: i didn't really mean it i wanted to kill the lawyers. shakespeare probable didn't mean it here, henry vi he had the butcher say it but if he said he could be an authoritarian kings. we need lawyers to protect us. we need the rule of law. worst places of live in countries where they don't have the rule of law. you never build anything because the neighbor may steal what you make. thank goodness we have lawyers and law, but we don't need this much law. these are the rules the federal government churned out just last year and this is just the feds, these 80,000 pages.

local governments added more. this kills peoples' ability to live their lives, to make their own decisions without fear of being punished constantly. some say philip howard. he wrote "the death of common sense." >> the law has made common sense illegal for many daily choices, especially people with responsibility. teacher in the classroom or the president trying to approve something. >> john: what about the teachers? >> they have lost the ability to maintain order in the classroom because there is so many procedures they have to prove that now they are scared to maintain order. >> john: i've heard they are scared to touch a child because so many get accused of abuse or sexual molestation?

>> it's the rule that you are not allowed to touch a child. you can't put your arm around a crying child. >> john: teachers are advised don't do that, let the child cry? >> that is absolutely correct. >> john: we have one example from florida, a five-year-old girl had a tan forum, she was out of control. -- tantrum. she was out of control. just grab her and stop her. >> no doing a linebacker drill. tried to get around her that way but not actually touch her because the rule is you can't touch. >> john: she holds her arm out but eventually she calls the cops and the cops come and put

the five-year-old in handcuffs. >> now is that better for the child? and that happened, that is not a rule in america. it happened couple weeks in queens. there are stories every month of a young child put in handcuffs because the teachers and principal don't feel they have the authority to hold on to the child. >> john: what else is destroyed by fear of lawsuits? >> no big employer will give a job reference. we confirm that so and so worked from this time to that time zblooph so if you fired me because i was stupid and lazy and i'm applying to you for a job. they say what is stossel like, you don't say i'm stupid and lazy? >> right you don't say anything.

a personal person that was strange in a hospital was continually fired for strange behavior, being in the wrong rooms. they found out later he had murdered 47 people. if anyone had been -- saying this is a weirdo don't hire him he would not have been able to get away with murder. >> john: but nobody says anything because the human resources says, we might get a labor lawsuit and it turns out bad they get sued. >> exactly. just say nothing. there is a list of questions that you are not allowed to ask. like this one. where are you from? >> john: you can't ask that because it might violate.... >> because i might say it in a rude way. where are you from?

you can do anything badly, but the whole idea of writing rules in advance to cover every situation is truly death of common sense. people can't do their jobs. >> john: now, we see when we read the lawsuits, little girl injured and family gets million dollars. but we don't see the side effects. one, they awarded $6 million somebody that broke his limb but the result that the town then decided no more sledding for anybody. >> go to any playground and i challenge you to signed a see saw, a jungle gym, anything that would attract a kid over the age of five. all those things not involve a risk but they attract kids to playground so they don't get

hurt. they are important for child development but you won't see them because of fear of litigation. >> john: even when you win you lose? >> you lose, it doesn't matter. nine out of ten juries could go your way but no one will take the risk one out of ten with a verdict for $2 million. >> john: even to win, the suit can cost you hundreds of thousands of dollars. i made my career as a consumer reporter and i used to cheer on the lawyers. they'll pass a rule and scare the bad guys. it took me a long time to see they cause more damage than they do good. but the so-called consumer groups are still cheering on, one called consumer watchdog, you are working to benefit corporate interests while harming workers and minorities. >> that is all true.

that is what i'm after. [ laughter ] >> many of our programs we have some of the leading consumer groups supporting proposals that i have come up with. we're building organizations called common good that i run. >> john: and the trial lawyers, always say why are you angry at us? we will deter the bad guys and we will get compensation for the victims. what is your answer to that? >> the current system doesn't work very well for those people. what the lawyers who are making all the money, their lawyers that congregated' intersection of tragedy and greed. they find a terrible injury and sue to the monday and take a third of it. >> but when you add in the defense lawyer costs, most of

than goes to lawyers? >> that's right. >> john: that is scam? >> 60 cents on the dollar goes to the legal costs of litigation and other 40 if they are lucky goes to the person that are injured. >> so it takes ten years to get their money and most of it goes to middleman? >> that's right. it's the worst system of compensation in the world. [ applause ] had. >> over other country, germany, france, korea, all of them have systems of justice where if the little guy is injured,can go to court and get justice within a year. our country doesn't allow that because it only goes for really tragic situations. >> john: let's go on to healthcare. we have the obamacare debate and

people talk about legal costs, 2% of healthcare but the bigger is something else. >> it's called defensive medicine, between $50-200 billion a year that go to unnecessary expenses that we're all paying for. it's not good for patient safety. what happens is the doctors are so paranoid they are trained not to speak up and say, are you sure that is the right dosage. they don't want to take legal responsibility. thousands of tragic mistakes because no one trusts it. >> john: they just shut up. >> yes. >> john: in terms of unnecessary thing, c-sections, john edwards suing doctors who he claims

caused cerebral palsy in the baby. since he first sued, c sections are much morp common, quadrupled in number because doctors are scared of lawyers like edwards. it's like you hurt the woman and requires a longer hospital stay answer costs much more. i once confronted a personal injury about that. >> for every person you help? >> no, you don't really believe that. >> cchtd sections have gone from 7% to 31%? >> much too frequently. >> jon: has it reduced the cerebral palsy? >> i don't agree. >> jon: your science was garbage. >> no, that's not true.

[ applause ] >> john: i think what they have done is a crime. many more people are having them because the doctors are just scared. >> right. experts say at least 50% more than are medically indicated mainly because of fear of lawsuits when a baby is born with serebral palsy. >> coming up a contest, our audience gets to award to the stupidest driven warning label. contestant number one. a hot tub. it carries this label that says, warning avoid drowning. [ laughter ] that would be good. but for something much more serious, do you know lawyers have made millions of dollars off the pain of september 11th.

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what's vanishing deducti all about ? guys, it's demonstration time. let's blow carl's mind. okay, let's say i'm your insurance deductible. every year you don't have an accident, $100 vanishes. the next year, another $100. where am i going, carl ? thnext year... th was weird. but awesome ! ♪ nationwide is on your side ♪ [ applause ] >> john: after the attacks of september 11th, thousands of rescue workers risked their lives to look forsurvivors and then thousands more joined in the cleanup.

as you can see from the pictures they breathed in all kinds of dust. the dust can make you sick, i can cause lung disease and maybe cancer later. to compensate those workers, congress gave the workers billion dollars. who would get it? 10,000 people claimed at working at ground zero made them sick and lawyers got together and settled the case. guess who got about $400 million lawyers. lester is a professor of school of law and author of a book lawyer baron. >> lawyers is for lawyers and of lawyers for a legal system. they are beneficiaries of the civil justice system where fees generate litigation and enormous incentives to bring litigation

and they make out band bandits. >> john: we are just helping the victims they say. who will do that? >> there is truth to that but the power they exert on the legal system is done for their own purposes. it isn't to benefit society, although they claim it does but it really is to benefit themselves. they are barons in that sense. >> john: there is other ways to compensate people. >> we are the only country in the world in which our method of compensation is based on contingency fees, payments to lawyers. when you couple that with the jury system and with punitive damages, we have the most expensive compensation system in the world by far. >> john: let's talk about compensating the rescue workers.

the settlement for $700 million. how much did plaintiffs get? >> immediately of $712 million, $625 million is getting paid out immediately. the lawyers are getting about $156 million out of that. >> don't the judges say it's too much. >> judge in fact did intervene and the fees were reduced to 25%. but it's an enormous fee. when you add in the dispersal remaining $82 million of the settlement, they'll come up with another $15-20 million. so altogether they could come up with $180 million, $190 million in that range. >> john: then there the government lawyers, city lawyers paid for by taxpayers and they get millions of dollars. >> the city lawyers have billed over $200 million in defending

the city. in defense of the city i should acknowledge, they were faced withenormous potential liability. >> john: they had to do this. this had to hire the barons. >> and the plaintiffs lawyer got every conceivable person that could and thousands that had no credible claim whatsoever. >> more clients the bigger shot of more money and what do you mean some were not entitled to the money. >> 3,000 of the 10,000 could show no injury of any kind. >> john: 800 say we have cancer. my heart goes out to them. but you have a problem with them deserving money? >> there is no credible basis

the hard tumor cancer claims. there is a late enter period, time between exposure to the time you manifest with injury is generally about 20 years or 30 years. so it is virtually impossible medically to establish that any one who manifested with cancer at this point can attributed that to 9/11. >> john: are cancer rates higher a among the regular population? >> no. you wouldn't have enough time to go by but death rates do not indicate any particular outcome from 9/11 but from the cleanup but again, it's too soon. today the compensation system puts compassion above science. >> john: it doesn't stop the lawyer? >> no, it does not. thank you. coming, as we contemplate life

without lawyers, scam artists. the woman said i can't work because of the injury. she looks pretty healthy. the full story is next.

[ applause ] >> john: were you injured on the job? if you watch tv, even this channel, there is an army of lawyers eager to take your case. >> if you've been injured at work, call me. i can help you. >> you are entitled to a lump sum settlement. >> my law firm has recovered third of a billion dollars for injured people. >> john: you end up paying that million or billion added to the cost of everything we buy. someone is really injured we wanted them compensated but were they? quarter of worker compensation claims are bogus. at least a quarter says paul cober who secretly sells people who files claims and makes recordings like this one. this man says he was blind because he was injured on the job. look at this.

he is driving a golf court. so what was his story? >> he filed for an injury that happened at his workplace. we later found out there was an doctor and attorney and himself. there was a three-way split with the money. so everybody had something to gain. >> john: working together on the fraud? >> absolutely. >> john: how do you know the attorney, maybe the attorney was duped? >> we both know that isn't how it worked out. [ laughter ] >> john: you have another claim a woman had a back injury she couldn't work. here we have video. she is riding a horse in a rodeo. how did this come about? >> originally the investigators were aware she was a horse enthusiast and they followed her to the local rodeo, but what they didn't know she was going

to be riding in the barrel races. because people sell horses and sometimes they show their horses but both of them looked at each other, they made a double take. it was her. and started rolling tape. she actually, you can see from the video it wasn't the first time at the rodeo, that is for sure. >> john: doesn't seem like a bad injury she can't work. but that case still hasn't been settled? >> that is the problem. they continue to linger. us as consumers are basically on the hook until the claims settle and we're on the hook as an economy. >> john: you think she as a lawyer would leave town. would be embarrassed. >> everybody has a financial interest in this and attorneys have a significant amount to gain from these claims. >> john: so insurance companies hire you, you check people out. you don't always videotape but

sometimes you do. sometimes the cheater knows there is a good chance that you are out there. so they pretend they are blind. what about the case you couldn't find a guy? >> we had a case, it took us a year to catch him. the way that the case played out the investigators had folded him for quite some time and they kept seeing a woman leave the house. listen, operations listed this let's follow the woman. the woman will lead you to the man. they followed the woman. lo and behold he shows up in a parking lot of a store and takes the wig off and jumps in other clothes. so this was ignite we were looking for. >> john: he dressed as a woman to hide from you.

when you do surveillance you find fraud how often? >> our firm, we see about 78% of our claims are showing some form of flawed. they are soft fraud and hard fraud but some are showing both of they will? >> hard fraud is pouring liquid detergent in a soap i'll and creating a slip and fall. this is your neighbor, this is your doctor, people exaggerating the truth a little bit. >> john: saying they can't work. there are some professional cheaters, people that do it for a living? >> very good cheaters out there. >> john: neighbors often know. one in four people are aware of fraud. the reason from us from our standpoint we really seen there is a sense of entitlement. they have paid into the insurance system and they are

looking for a return on their investment but it's coming out of our pockets every year. >> the neighbors say he is cheating the system, but it's a big insurance company and they don't care? >> the big evil insurance company and that the mentality behind it. insurance companies are swimming in money. >> john: but we're paying that money and we pay more because of these cheaters. you worry about your own safety because of that. >> absolutely. for me as an investigator, also as a ceo of the company, we're taking people and fraudulent criminals down but people don't like when they have a retirement plan set up on a fraudulent claim. when you take that from people, anyone knows they are holding on to their money as tightly as they can. people have been hired to track me down, track my family down. so it's very shady business from that aspect. >> paul colbert is your real name but you don't give your

real address? >> good luck finding me. >> john: coming up, our contest the stupidest lawyer driven warning label. this label says, warning, potentially dangerous, the riders are experts and professionals. thousand dollars for the wacky yest warning label next. [ applause ]

>> john:, now the wacky warning label contest. second one we did last year. this was the thousand dollar winner then. >> it's called a drive and talk speaker phone. what does it say. warning, do not use while

driving. [ laughter ] >> bob is back and he agreed to let you in the audience award a thousand dollars. he begin this contest 13 years ago because he was angry about what lawsuits do in america. >> it's the debate but all the ways in culture are changing because it's the most lawsuit happy society on earth. we have more lawsuits than any other country in the world. we twoochbtd talk one way litigation is filtering in every day. >> girl scouts must sell tens of thousands of cookies each year just to pay their liability insurance. >> we work with nonprofit organizations that feed the poor. we work with little league of america spends more money on liability insurance than any other item in their budget, basketballs and bats combined.

>> john: warning labels get longer. there are unintended consequences. >> they claim they are doing safety efforts. the warning labels become so long, people tune them out. they miss the warning labels that they really need. >> drug labels, i don't read them at all. and microwave popcorn, don't open like this because it's hot. we're not making fun of manufacturers. >> i am. >> we're highlighting a system that makes them feel if they don't do they are vulnerable to a lawsuit. that is the bottom line, the lawsuits that drive these warning labels cost the rest of us as consumers more for the things we buy but remove products from the marketplace that we could use. >> john: they don't introduce them out of the fear of the lawyer?

>> right. >> and if we have the same number of tort lawsuits compared to other countries, we would save how much? >> $580 billion a year. we're saying if it's comparable to other advanced nations around the world. on compensating people that have legitimate injuries we would save $1800 per person in america every year. just think what we could do with job creation if that money was invested in product development. >> john: i have an idea at the end of show. let's talk about the warning labels. one was a batman cape, cape does not allow the user to fly. [ laughter ] [ applause ] >> let's bring out the five finalists. >> here is one. >> don't you know that that is

dangerous. >> no. >> are you a trained professional? >> no, i'm a kid. [ laughter ] >> john: i have to ask silly questions, his bicycle has a warning label and the finalist. the brochure warns the dangers of the biking and they need to be experienced experts or professionals. they are kids like him. what are some of the other ones? >> how about common deduct mask. the warning label says, warning, does not supply oxygen. of course, it doesn't. i mean we called the company and they said, government rules require us to say that because people think it does. if they don't put it on there they could be sued.

>> john: with the label that doesn't necessarily protect them they still get sued. >> sometimes a plaintiffs lawyer you put that warning label so you are acknowledging that is possible harm that could happen and you still produce that product? so if you follow their logic the ultimate conclusion we'll no longer have any products that could cause any damage. that is one of the reasons see saws have vanished in america. >> seesaws, i don't miss. but that is another story on some of the other stuff. >> how about a warning label -- this is something, we've been doing this contest for 14 years. the warning label on this pen, warning, pen caps can obstruct breathing, keep out of mouth. this came with instructions that were in four languages but the warning label about doing something we know is common

sense was only in english. americans are... it underscores what we're saying here. manufacturer knows it won't get manufactured by people in germany or other parts of the world. >> john: this one? >> warning label -- this is a gun case. made to conceal a handgun. >> john: wand we're loud to have a handgun in the studio so we put one in, a squirt gun but the warning says. >> for gun only, not a functional day planner. [ laughter ] >> john: we called the companies and get their replies. in the case of this one, the company said, no, it wasn't because of liability. we sell them and we were making sure bee weren't confusing our

customers. bob, i'm throwing this out. i think you should call the companies. >> we do this, litigation is so bad that, you see most of the warning labels. >> john: last one is a hot tub. there is no water in the hot tub. i would have put water in here, but then i saw the label which says warning, prevent drowning, child drowning. why would a company put a label like that on a hot tub? >> because they know if they don't, the lawyer will say, you failed to warn us. all these lawsuits for wacky warning labels, even if everybody knows that, that will drive a lawsuit that could force somebody in years of litigation

and hundreds of thousands in legal bills. >> thank you, bob. coming up the audience votes. you have our contestants the

more than a hundred people have offered their suggestions for the most wacky warning label.

bob has picked husband top five and he decided he would let you guys, our studio audience to pick the winner. he'll give to a thousand dollars that suggested the warning label that you pick. so who votes for the hot tub that says avoid drowning? all right. quite a few. how about the mask that says does not supply oxygen. and pen that says don't hold the cap in your mouth. or the company that puts on the brochure, dangerous activity, the kids pictured are professionals. what wins. in one of the closest ever. >> thousand dollars to the person that sent us the dusk mask. >> second place gets $500.

>> that was the bicycle. >> john: that is what i thought, too. john nevan from michigan. now, your questions for our guest. i'm going start one from my facebook page forks you philip. should we demand, this is patrick mccall, demand sunset rules on all legislation? >> absolutely. anything that has budgetary impact has to be reconsidered every ten years or so because it piles up like sediment in a hopper. sooner or later nobody can comply with the rules. >> sunset rules, you can count on one hand the number of federal laws that have expired. >> john: yes, sir. >> what would you do to fix this problem? of all this litigation? >> one 6 things is greater

awareness. thomas payne who wrote common sense, what he wanted to do was ignite public opinion to get involved. we're trying do the same thing. we want to motivate people to think about the roles that judges play so when they are alongside or vote for legislators. >> but you have to change the structure. we have to give judges a different concept of what their job is. if somebody brings a lawsuit $50 million for a lot of pair of pants, it ought to get dismissed in 30 seconds. [ applause ] >> john: why don't they? >> they don't think it's their job. who am i to judge. that is the orthodoxy in america. judges to have act as gatekeepers for the rest of society. there are claims that are

unreasonable and they have to hold up. >> and judges are not on the radar screen. so if nobody is paying attention they can let the lawsuits go forward. that is why public opinion is so important. >> john: who is next. yes, sir? >> if you believe in the markets that people act in their own self-interests is a good thing. people are agentsing in self-interests and what is broken? if all these guys are doing something in the self-interests shouldn't we do be doinging in snog stop them? >> there is a big difference, people are using law which is state power, it's not freedom. it's like indicting somebody for money. if you are going to go use state power somebody on on behalf of the state has to say, this is reasonable claim are not

otherwise it's letting a person extort you. >> john: all this regulation, it's like a clumsy one size fits all. it's the lawsuit and in some ways it is and they do some good but they do much more harm. >> why are lawyers allowed to continue practicing law if they are bringing frivolous lawsuit after frivolous lawsuit? doesn't the state bar association take disciplinary bar association takes action against them? >> no. it used to be hard, but you prove you have a law degree and you are never indicted. so bar associations need to stand for something. you are absolutely right. >> i'm from new jersey and we also have bar associations and

we also have ethics boards. neither one of them? >> they don't do their jobs. >> everybody has been discussing this for decades, whether tort reform how to change things, why isn't in ib doing anything about it? >> politicians big change happens in big chunks. it happened in 30 or 40 years. last time it was 1960s and we tried to fix them. war at one of those periods in our country's history where we have to fix almost everything. it's just out of control. regulations pressed down into people's daily lives. so of it the john stossel is one of the leading champions. [ applause ] >> that is why the group i chair

common good is launching a campaign called start over. start over.org because we are in one of those periods we have to fix this stuff. >> john: i would add, it hasn't changed because nobody argues better than these trial lawyers. practice makes perfect. they fight for a living. they use words and deceit to win in courts. they win in legislatures, too. >> and they get more laws on the books to sue for more reasons. they contribute so much money it's hard to overcome the influence. >> john: thank you. next, my take on lawsuit abuse. [ applause ]

>> john: so many politicians are lawyers, shouldn't surprise me they churn this out every year. 80,000 pages of new rules, every year, just on the federal level. now, it's intuitive to lawyers that more rules better life but they are wrong spied are be of rules cripples life.

it makes people afraid and makes everyone a potential lawsuit target. it doesn't stop the politicians, they keep passing more of these rules. this many every day. and lawyers take those rules and use them to enrich themselves. so you would think with all that money, you would want one in your family, and we ask, do you want your child become a lawyer. >> it's wrong. >> it's scary about all the things. >> not all of them are bad. >> it would be a better world without lawyers. >> it would be. we'll never have life without lawyers, fewer lawsuits would be very good but the english rule. i shouldn't call it that. the lawyer trick that has the calling the english rule. the rule that says if i sue you and lose i should have to pay legal fees. pay for some of the damage that i caused you.

but it's not the english rule, it's the rest of the world rule. most every country has it except america. and america has the highest legal costs. everything we buy costs more to pay for the lawyer especially life saving products, company that makes pacemakers, lawsuits add thousands of dollars for each pacemaker. that the millions, the money isn't the worst part. the worst is fear of lawsuits that robs us of much of the best stuff in life. the fear makes preachers and teachers afraid to hug a crying child, drive doctors to do tests and even surgeries that don't need to be done. and the fear of lawsuits cripples innovation. the fda has approved a vaccine against lime disease. you want some of it if forget about it. no company will sell it because they might get sued. companies stop producing a pain

reducing silicone coating for hypodermic needles. the company director said our product is safe but we don't want to risk a lawsuit. for every person lawyers help they hurt thousands more. we'll never have life without lawyers but i would like to have more of life without them. thanks for watching. good night. [ applause ]

>> good morning, everyone. i'm martha maccallum. it is monday, june 20th. i'm in this morning for gretchen carlson. here's one of the big questions out of the weekend. rick perry for president? the crowds making it clear that they are drafting the governor of texas. >> but can he make it to the top of the ticket before it's too late? >> we'll talk about that. plus he's got nothing to lose. outgoing defense secretary robert gates calling the white house's bluff. our withdrawal from afghanistan not exactly going as planned.