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.
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
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.