Less people suing would reduce that. The problem is that people sue over everything, so why deal with the hassle when you can go into defense mode early and stave off frivolous court proceedings? I agree, it sucks.
2) I'm not an American but I think your legal system is very good and many objective people do too: http://www.quora.com/Litigation-and-Lawsuits/Why-are-America...
3) I'd recommend anyone to watch Hot Coffee [1] which documents the lobbying and spin that encourages American citizens to think there is a problem with "frivolous lawsuits"
The part where the cup disintegrates and leaves the person with 3rd degree burns on their crotch would be the highlight. The punch line would be the owner of the store saving $10 on coffee costs per month because he keeps the coffee too hot.
I was more upset with them trying to bill us three months later. We had filed a formal complaint on our last day of the trip over the poor response and had spoken with one of the guest services managers for close to 30 minutes. So when a letter from the cruise line came three months later, I was expecting an apology, not a bill.
When this happened, my wife was in the final year of law school, so our response to the bill was probably atypical of a normal customer response, but even when they told us we wouldn't be responsible for the money and that they'd give us a credit for a future cruise, they still made sure to dismiss their liability and deny that they breached any duties.
One of the gross things with the incident was that another passenger started cleaning up the blood because no crew was doing it. Another passenger was a doctor and stepped in to help stop the bleeding while we waited for a wheelchair to take us to the doctor.
I suspect that going into "don't get sued" mode actually encourages lawsuits.
I read an article a while back that indicated the doctors with the highest rate of malpractice suits were not the ones who made the most errors but the ones who were the least empathetic. There has been at least one study that concluded insensitivity and poor communication after the incident was a major factor in the decision to sue.