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Tort Reform

Tort reform proposals have been brought forward by advocates who believe lawsuit abuse is having an adverse effect on the court system and the economy.

 

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Proponents of tort reform usually point to some of the high-profile multimillion dollar or multibillion dollar verdicts that have made news headlines as evidence for a need to change the civil laws in the U. S.

When these verdicts are struck down or lessened, this usually does not make headlines.

The tort reform proposals to date and laws based on the idea of tort reform have involved limits on punitive damages or non-economic damages in personal injury cases, moving class action lawsuits from state to federal court, limiting and disciplining personal injury lawyers, limiting frivolous lawsuits and other measures.

These measures are supposed to speed up the courts and reduce the "lawsuit lottery" that proponents say are having a negative economic on society by discouraging business from bringing much needed products to market, especially in the healthcare and pharmaceutical fields. Proponents also argue that with tort reform, physicians will be able to afford medical malpractice insurance and serve in underserved parts of the state and insurance companies will also begin to offer new and expanded coverage especially in the healthcare field.

Tort Reform Proposals / Laws

The Lawsuit Abuse Reduction Act of 2005 (H. R. 420) seeks to discipline lawyers for "forum shopping" for the most favorable venues in personal injury cases and bringing multiple lawsuits for the same claim.

The Class Action Fairness Act of 2005 was enacted at the urging of the President to move large-scale class action lawsuits from state courts, where verdicts have generally been more favorable to the plaintiffs to federal courts where verdicts have generally been more favorable to the defendants. The class actions need to be in excess of $5 million and the class has to be comprised of less than 2/3 of the plaintiffs who are from the state the lawsuit was filed in.

Limits in punitive and non-economic damages have been proposed in many states that are working on various types of tort reform measures. The limits that have been proposed vary but usually range from $250,000 to $750,000. Some states are considering proposals for split-recovery punitive damages where the state gets a percentage of the punitive damage verdict (usually 50 - 75 percent). The argument in favor of the split-recovery proposal is that one plaintiff should not receive a huge windfall profit when many more people were also likely to be affected, such as in a product liability case. So, the state gets part of the award to share among the masses as a result of the punitive damage award.

Limiting lawyers contingency fees in personal injury cases in also on the agenda in many states. The percentage an attorney would make would be on a sliding scale in regards to the amount of the award. For instance, an attorney may receive a 40-percent fee on the first $50,000 of the award but only receive 15-percent of any damages in excess of $600,000.

Another tort reform proposal is that juries be informed about collateral sources when determining the amount of damages. Many times jurors are unaware that the plaintiff has already receive benefits through disability or health insurance policies and they would be able to consider this information when determining damage awards.

Other tort reform proposals that have been proposed include changes to the comparative negligence laws, elimination of the election of judges, eliminate "legislation through litigation" cases, re-invoke the English "Loser Pays" rule and set up birth injury compensation funds.

Tort Reform Myths

There are several myths involving tort reform that have been perpetuated mainly by the media that have created an angry mob mentality in proponents of tort reform. For instance, many tort reform proponents will see a high-profile case with a seemly outrageous punitive damage award. These so-called outrageous awards are almost never let to stand as they are routinely struck down on appeal or before appeal. Punitive damages are by their vary nature rare, constituting less than 4-percent of all personal injury verdicts.

Another myth is that the number of tort cases is skyrocketing out of control. According to the Office of the U. S. Courts tort cases decreased 28-percent between 2002 - 2003. Between 1992 and 2001 the number of civil cases filed in state court dropped by 47-percent. And yet another myth is that citizens are brining forth too many frivolous lawsuits against companies, driving up prices for all of us. The reverse is true, actually. According to a recent survey, 69 out of 100 frivolous lawsuits, sanctioned as such, were brought by U. S. businesses and their attorneys.

Politics of Tort Reform

Tort reform at the state and national level is very bi-partisan, in which Republicans are largely in favor and Democrats are largely opposed to it. Large insurance and healthcare companies contribute to the Republican interests and trial lawyer associations contribute to the Democrat interests. Large settlements and verdicts in personal injury cases can be seen as a transfer of wealth from large companies (Republican base) to victims and their lawyers (Democratic base). Tort reform proposals have mostly come from the Republican side of the aisle in Congress in order to curb this transfer of wealth.

 

 

 

 

 

 

 

 

 

 


 

 


 

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