Tort reform
Encyclopedia
Tort
A tort, in common law jurisdictions, is a wrong that involves a breach of a civil duty owed to someone else. It is differentiated from a crime, which involves a breach of a duty owed to society in general...
litigation or damages. Tort
Tort
A tort, in common law jurisdictions, is a wrong that involves a breach of a civil duty owed to someone else. It is differentiated from a crime, which involves a breach of a duty owed to society in general...
actions are civil common law claims first created in the English commonwealth system as a non-legislative means for compensating wrongs and harm done by one party to another's person, property or other protected interests (e.g. physical injury or reputation, under libel and slander laws). Tort reform advocates focus on personal injury
Personal injury
Personal injury is a legal term for an injury to the body, mind or emotions, as opposed to an injury to property. The term is most commonly used to refer to a type of tort lawsuit alleging that the plaintiff's injury has been caused by the negligence of another, but also arises in defamation...
common law rules in particular.
In the United States tort reform is a contentious political issue. US tort reform advocates propose, among other things, procedural limits on the ability to file claims, and capping the awards of damages. Supporters of the existing tort system, including consumer advocates, argue that reformers have mis-stated the existence of any real factual issue and criticize tort reform as disguised corporate welfare.,
In Commonwealth
Commonwealth of Nations
The Commonwealth of Nations, normally referred to as the Commonwealth and formerly known as the British Commonwealth, is an intergovernmental organisation of fifty-four independent member states...
countries as well as states including Texas, Georgia and California, the losing party must pay court costs of the opposing party.
Some legal scholars propose to replace tort compensation with a social security
Social security
Social security is primarily a social insurance program providing social protection or protection against socially recognized conditions, including poverty, old age, disability, unemployment and others. Social security may refer to:...
framework that serves victims without respect to cause or fault. In 1972, New Zealand
New Zealand
New Zealand is an island country in the south-western Pacific Ocean comprising two main landmasses and numerous smaller islands. The country is situated some east of Australia across the Tasman Sea, and roughly south of the Pacific island nations of New Caledonia, Fiji, and Tonga...
introduced the first universal no-fault insurance
No-fault insurance
In its broadest sense, "no-fault insurance" is a term used to describe any type of insurance contract under which insureds are indemnified for losses by their own insurance company, regardless of fault in the incident generating losses. In this sense, it is no different from first-party coverage...
scheme for all accident victims, which provides benefit from the government run Accident Compensation Corporation
Accident Compensation Corporation
The Accident Compensation Corporation is a New Zealand Crown entity responsible for administering the Accident Compensation Act 2001. The Act provides support to citizens, residents, and temporary visitors who have suffered personal injuries....
without respect to negligence
Negligence
Negligence is a failure to exercise the care that a reasonably prudent person would exercise in like circumstances. The area of tort law known as negligence involves harm caused by carelessness, not intentional harm.According to Jay M...
. Its goal is to achieve equality of compensation, while reducing costs of litigation. In the 1970s, Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
and the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
drew up proposals for similar no-fault schemes but they were later abandoned.
The tort system
Tort requires those responsible (or "at fault") for harming others to compensate the victims, usually in money. Typical harms can include loss of income (while the person recovers); medical expenses; payment for pain, suffering, or even loss of a body part; or loss of future income (assuming that said loss can be proven to be reasonably likely to occur. See speculative damagesSpeculative damages
Speculative damages are damages claimed by a plaintiff for losses that may occur in the future, but are highly improbable. They can not be used as a basis for recovery in tort or contract cases...
). These components of the award can be adequately represented in money terms, and (outside the United States) they most often constitute the largest element of the award.
The classical purpose of tort is to provide full compensation for proved harm. This is known under the Latin phrase restitutio in integrum
Restitutio in integrum
Restitutio in integrum is a Latin maxim which means restoration to original condition. It is one of the primary guiding principles behind the awarding of damages in common law negligence claims...
(restoration to original state). In other words, the idea underpinning the law of tort is that if someone harms someone else, they should make up for it. Compensation should be, in the words of Lord Blackburn in Livingstone v Rawyards Coal Co,
"that sum of money which will put the party who has been injured in the same position as he would have been if he had not sustained the wrong for which he is now getting his compensation or reparation."
Themes of the tort reform debates
A number of recurrent issues can be identified in the debates about tort reform.Economic effects
The primary criticism of the tort system is economic. Critics may decry the cost of compensation payments themselves, or that—granting that compensation is a worthy goal for the injured—litigation is an inefficient method of giving compensation. In Britain, for instance, it has been argued that 85p is spent on litigation for every £1 of compensation paid. In contrast, the social security system costs 8p or 12p for every £1 delivered. This figure is disputed, because there is no easy method for accounting for transaction costs particularly when pre-litigation settlements are considered.Three particular charges are levelled at the tort system, for having distorting economic effects.
First, the costs of litigation and compensation payouts raise the cost of insurance. Because most tort claims will be paid from the pockets of insurance, and because the public generally pays into insurance schemes of all kinds, tort reform proponents assert that reducing tort litigation and payouts will benefit everyone who pays for insurance.
Secondly, and related to insurance in countries which do not have socialized medicine
Socialized medicine
Socialized medicine is a term used to describe a system for providing medical and hospital care for all at a nominal cost by means of government regulation of health services and subsidies derived from taxation. It is used primarily and usually pejoratively in United States political debates...
(i.e., national health care), the costs of the tort system, and in particular medical malpractice suits, may raise the costs of health care. The difficulty in this area is to distinguish between public and private health care providers. The experience in the UK, where there is a fully public system run by the National Health Service
National Health Service
The National Health Service is the shared name of three of the four publicly funded healthcare systems in the United Kingdom. They provide a comprehensive range of health services, the vast majority of which are free at the point of use to residents of the United Kingdom...
, is that tort claims have been restricted, for instance in disallowing loss of chance cases. The Medical Defence Union
Medical Defence Union
The Medical Defence Union is the largest medical defence union in the United Kingdom, and is one of three major medical defence organisations in the country.The MDU was established in 1885 and was the first of its kind in the world...
actively combats, and attempts to settle all cases where potential negligence claims are at stake. While successful, the costs of litigation to the health system are steadily growing, and stand at around £446m a year. In the United States, it is easier for victims of medical malpractice to seek compensation through the tort system. The American medical negligence record is poor, with around 195,000 deaths per year, which itself leads to a higher number of claims. It is open to debate as to whether a change in the law of tort either way would lead to significant reductions in cost or changes in practice. According to Bloomberg Businessweek, "Study after study shows that costs associated with malpractice lawsuits make up 1% to 2% of the nation's $2.5 trillion annual health-care bill and that tort reform would barely make a dent in the total."
Third, there is an argument that tort liability could stunt innovation. This argument usually comes in connection with product liability
Product liability
Product liability is the area of law in which manufacturers, distributors, suppliers, retailers, and others who make products available to the public are held responsible for the injuries those products cause...
, which in every developed country is strict liability
Strict liability
In law, strict liability is a standard for liability which may exist in either a criminal or civil context. A rule specifying strict liability makes a person legally responsible for the damage and loss caused by his or her acts and omissions regardless of culpability...
, subject to a "state of science" defence. If a product is faulty, and injures somebody who has come across it (whether they are the buyer or not) then the manufacturer will be responsible for compensating the victim regardless of whether it can be shown that the manufacturer was at fault. The standard is lower in other injury cases, so that a victim would have to prove that a tortfeasor had been negligent
Negligence
Negligence is a failure to exercise the care that a reasonably prudent person would exercise in like circumstances. The area of tort law known as negligence involves harm caused by carelessness, not intentional harm.According to Jay M...
. It can be argued that strict liability deters innovation, because manufacturers could be reluctant to test out new products for fear that they could be subjecting themselves to massive tort claims. This argument is characteristic of the law and economics
Law and economics
The economic analysis of law is an analysis of law applying methods of economics. Economic concepts are used to explain the effects of laws, to assess which legal rules are economically efficient, and to predict which legal rules will be promulgated.-Relationship to other disciplines and...
movement. It may be somewhat confused about the relevant law because it misses the state of science defence. This defence means that a manufacturer can always say "there was no warning or evidence in the scientific literature that this new product could be dangerous."
Equality in treatment
Equality of treatment is the central issue for reforms in New Zealand and in the Commonwealth more generally. If someone has an accident then they have a statistical 8% chance of finding a tortfeasor responsible for their injury. If they are lucky enough to have been injured by someone else's fault, then they can get full compensation (if the tortfeaser is not judgment proofJudgment proof
The term judgment proof is most commonly used in tort law contexts to refer to defendants or potential defendants who are financially insolvent...
). For others—for those injured by natural accidents, by themselves, by disease or by environmental factors; no compensation is available, and the most that can be gained for their losses will be meager state benefits for incapacity.
This was the basis for much of Professor Patrick Atiyah
Patrick Atiyah
Patrick S. Atiyah QC FBA is an English lawyer and academic. He is best known for his work as a common lawyer, particularly in the law of contract and for advocating reformation or abolition of the law of tort. He was made a Fellow of the British Academy in 1979.-Biography:Atiyah is a son of the...
's scholarship as articulated in Accidents, Compensation and the Law (1970). Originally his proposal was the gradual abolition of tort actions, and its replacement with schemes like those for industrial injuries to cover for all illness, disability and disease, whether caused by people or nature. Such a system was developed in New Zealand following recommendations from the Royal Commission in 1967 for 'no fault' compensation scheme (see The Woodhouse Report). Over the 1980s Atiyah's views shifted. He still argued that the tort system should be scrapped. But instead of relying on the state, he argued people should have to take out compulsory first party insurance, like that available for cars, and this model should be spread progressively.
Limits on noneconomic damages
Other tort reform proposals, some of which have been enacted in various states, include placing limits on noneconomic damages and collecting lawsuit claim data from malpractice insurance companies and courts in order to assess any connection between malpractice settlements and premium rates.Reduction in the statute of limitations of action
A different reform is not to limit the amount of legitimate recovery, but to reduce the time to sue—the statute of limitationsStatute of limitations
A statute of limitations is an enactment in a common law legal system that sets the maximum time after an event that legal proceedings based on that event may be initiated...
of actions. New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
law now requires that:
Punitive awards and juries
Punishment
Punishment is the authoritative imposition of something negative or unpleasant on a person or animal in response to behavior deemed wrong by an individual or group....
and the word "exemplary" implies that damages should "make an example" of the wrongdoer. The purpose of such damages are twofold: to deter wrongful conduct by other actors, and to serve a normative function of expressing social shock or outrage at the defendant's actions.
In most jurisdictions, punitive damages are not available. They are considered contrary to public policy, because the civil justice system in many countries does not have the same procedural protections as the comparable criminal justice system. Therefore, allowing punitive damages would have the effect of punishing actors for wrongful conduct without allowing them the ordinary procedural protections that are present in a criminal trial. The fear is that punitive damages encourage a vindictive, revenge seeking state of mind in the claimant and society more generally. In the UK, Rookes v Barnard limited the situations in which punitive damages can be won in tort actions to where they are expressly authorised by a statute, where a defendant's action is calculated to make profit, or where an official of the state has acted arbitrarily, oppressively or unconstitutionally. In the United States, though rarely awarded in tort cases, punitive damages are available, and are sometimes quite staggering when awarded. For example, in 1999, a Los Angeles County jury awarded $4.8 billion in punitive damages against General Motors to a group of six burn victims whose 1979 Chevrolet Malibu was rear-ended by a drunk driver, causing it to catch fire. This was later reduced to 1.2 billion by the judge.
It is argued by some that extraordinary damage awards in the United States are a result of the jury system. In federal courts in the United States, the right to a jury trial in most civil cases is entrenched
Entrenchment clause
An entrenched clause or entrenchment clause of a constitution is a provision which makes certain amendments either more difficult than others or impossible...
in the Seventh Amendment of the United States Constitution (drafted in 1789). Many state constitutions have similar counterparts that protect the right to a jury trial in state court proceedings. In many countries, particularly in continental Europe, juries are not used at all, even in criminal cases, because of the cost of protracted trials necessitated with a jury present and confidence in judicial impartiality. In the United Kingdom, juries are available in criminal cases, and for tort cases involving defamation, false imprisonment
False imprisonment
False imprisonment is a restraint of a person in a bounded area without justification or consent. False imprisonment is a common-law felony and a tort. It applies to private as well as governmental detention...
and malicious prosecution
Malicious prosecution
Malicious prosecution is a common law intentional tort, while like the tort of abuse of process, its elements include intentionally instituting and pursuing a legal action that is brought without probable cause and dismissed in favor of the victim of the malicious prosecution...
. Even in these three limited areas of tort there have been growing concerns about juries' role. In particular the disparity between awards in defamation cases (which invariably concern celebrities, politicians and the rich) and awards for personal injuries has been growing. Inevitably, the awards climb, in a way that a fixed system of damages under judicial scrutiny does not allow. Juries are unseasoned with a daily exposure to tragic accidents in tort litigation. When confronted with their first case they may be shocked and outraged, which inspires a willingness to teach the wrongdoer (through a big damages award) that "tort does not pay".
Awards for pain and suffering
Tort compensation easily applies to property damage, where the replacement value is a market price (plus interest), but it is difficult to quantify the injuries to a person's body and mind. There is no market for severed legs or sanity of mind, and so there is no price which a court can readily apply in compensation for the wrong. Some courts have developed scales of damages awards, benchmarks for compensation, which relate to the severity of the injury. For instance, in the United Kingdom, the loss of a thumb is compensated at £18,000, for an arm £72,000, for two arms £150,000, and so on.Even more difficult to reckon are damages for the pain and suffering
Pain and suffering
Pain and suffering is the legal term for the physical and emotional stress caused from an injury .Some damages that might be under this category would be: aches, temporary and permanent limitations on activity, potential shortening of life, depression or scarring...
of an injury. But while a scale may be consistent, the award itself is arbitrary. Patrick Atiyah
Patrick Atiyah
Patrick S. Atiyah QC FBA is an English lawyer and academic. He is best known for his work as a common lawyer, particularly in the law of contract and for advocating reformation or abolition of the law of tort. He was made a Fellow of the British Academy in 1979.-Biography:Atiyah is a son of the...
has written that one could halve, or double, or triple all the awards and it would still make just as much sense as it does now.
Another likely factor driving up punitive damages are quota litis agreements between lawyers and clients, in which a share of the awarded punitive damage is awarded to the lawyer recovering it, giving the trial lawyer a direct economic incentive in high damages. Such a quota would usually amount to 25% to 30%. Such agreements, while lawful in the US, are considered unethical in the European Union.
Class action lawsuits in the United States
Mass actions are lawsuits where a group of claimants band together to bring similar claims all at once. Class actionClass action
In law, a class action, a class suit, or a representative action is a form of lawsuit in which a large group of people collectively bring a claim to court and/or in which a class of defendants is being sued...
s are lawsuits where counsel for one or more claimants bring claims on behalf of similarly situated claimants. These do not exist in most countries, and what will usually happen is that one case will be funded as a "test case", and if judgment falls in the claimants' favour the tortfeasor will settle remaining claims. Class actions are justified on the basis that they ensure equal treatment of similarly situated victims, avoid the risk of conflicting judgments on similar issues, and allow an efficient resolution of a large number of claims. In the US, class actions have been used (and by some views abused) in order to overcome the differences applicable in different jurisdictions, including the perceived predispositions of judges, juries, and differences in substantive or procedural law. So if one claimant lives in State X, where courts and laws are unfavourable to their claim, but another claimant lives in the more favorable jurisdiction of State Y, they may bring a class action together in State Y. Strictly speaking, State Y must not adjudicate the claim unless it is found that the applicable law is similar or identical in both states, but as a practical matter this rule is often disregarded in favor of efficient resolution of claims. Another measure particular to the U.S. is the introduction of "proportionate liability", in place of joint and several liability
Joint and several liability
Where two or more persons are liable in respect of the same liability, in most common law legal systems they may either be:* jointly liable, or* severally liable, or* jointly and severally liable.-Joint liability:...
.
Claimed inefficiency of legal system
According to economist Reed Neil Olsen, "...tort law generally and medical malpractice specifically serve two legitimate purposes. First, the law serves to compensate victims for their losses. Second, the threat of liability serves to deter future accidents." Tort reformers maintain that the present tort system is an expensive and inefficient way to compensate those injured.According to a 2004 study of medical malpractice costs, "program administration—defense and underwriting costs—accounts for approximately 60 percent of total malpractice costs, and only 50 percent of total malpractice costs are returned to patients. These costs are high even when compared with other tort-based systems, such as automobile litigation or airplane crashes, that determine fault and compensate victims. Moreover, most patients that receive negligent care never receive any compensation. The Harvard Medical Practice Study found that only one malpractice claim was filed for every eight negligent medical injuries." Of the legal changes proposed by tort reformers, this study found that states capping payouts and restricting non-economic damages saw an average decrease of 17.1% in malpractice insurance premiums. Similarly, Klick/Stratman (2005) found that capping economic damages saw an increase in doctors per capita.
There is no guarantee, however, that any savings from tort reform would be efficiently distributed. Tort reform in Texas during the 1990s created $600 million in savings for insurance companies while the fraction of policy dollars needed to cover losses fell from 70.1 cents in losses in 1993 to 58.2 cents in 1998.
Opponents of these liability-limiting measures contend that insurance premiums are only nominally reduced, if at all, in comparison to savings for insurance companies. Further, opponents claim that parties are still being injured at similar or higher rates, due to malpractice not being deterred by tort claims and the attraction of lower quality physicians to "tort reformed" states.
Special medical malpractice courts
Tort reform advocate Common Good has proposed creating specialized medical courts (similar to distinct tax courtTax court
Tax courts are courts of limited jurisdiction that deal with tax issues.*United States Tax Court, a United States federal court**List of Judges of the United States Tax Court**Uniformity and jurisdiction in U.S...
s) where medically-trained judges would evaluate cases and subsequently render precedent-setting decisions. Proponents believe that giving up jury trials
Trial by Jury
Trial by Jury is a comic opera in one act, with music by Arthur Sullivan and libretto by W. S. Gilbert. It was first produced on 25 March 1875, at London's Royalty Theatre, where it initially ran for 131 performances and was considered a hit, receiving critical praise and outrunning its...
and scheduling noneconomic damages such as pain and suffering
Pain and suffering
Pain and suffering is the legal term for the physical and emotional stress caused from an injury .Some damages that might be under this category would be: aches, temporary and permanent limitations on activity, potential shortening of life, depression or scarring...
would lead to more people being compensated, and to their receiving their money sooner. This approach has been criticized for treating medical malpractice differently from other areas of tort law and for depriving Americans of their seventh amendment rights. Still, a number of groups and individuals have supported this proposal.
United States
In general, tort reform advocates contend that too many of the over 15 million lawsuits filed in the United StatesUnited States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
each year are "frivolous" lawsuits.
The term "frivolous lawsuit" has acquired a broader rhetorical definition in political debates about tort reform, where it is sometimes used by reform advocates to describe legally non-frivolous tort lawsuits that critics believe are without merit, or award high damage awards relative to actual damages.
Tort reform advocates argue that the present tort system is too expensive, that meritless lawsuits clog up the courts, that per capita tort costs vary significantly from state to state, and that trial attorneys
Lawyer
A lawyer, according to Black's Law Dictionary, is "a person learned in the law; as an attorney, counsel or solicitor; a person who is practicing law." Law is the system of rules of conduct established by the sovereign government of a society to correct wrongs, maintain the stability of political...
too often receive an overly large percentage of the punitive damages awarded to plaintiff
Plaintiff
A plaintiff , also known as a claimant or complainant, is the term used in some jurisdictions for the party who initiates a lawsuit before a court...
s in tort cases. (The typical contingent fee arrangement provides for the lawyer to retain one-third of any recovery.) A Towers Perrin
Towers Perrin
Towers Perrin was a professional services firm specialising in human resources and financial services consulting, which merged in January 2010 with Watson Wyatt to form Towers Watson...
report indicates that U. S. tort costs were up slightly in 2007, are expected to significantly increase in 2008, and shows trends dating back as far as 1950. High-profile tort cases are often portrayed by the media as the legal system's version of a lottery
Lottery
A lottery is a form of gambling which involves the drawing of lots for a prize.Lottery is outlawed by some governments, while others endorse it to the extent of organizing a national or state lottery. It is common to find some degree of regulation of lottery by governments...
, where trial lawyers actively seek the magic combination of plaintiff, defendant, judge, and jury. Advocates of tort reform complain of unconstitutional regulation caused by litigation, and that litigation is used to circumvent the legislative process by achieving regulation that Congress is unwilling or unable to pass.
Tort reform is also proposed as one solution to rapidly increasing health care costs in the United States. In a study published in 2005 in the Journal of the American Medical Association, 93% of physicians surveyed reported practicing defensive medicine
Defensive Medicine
Defensive medicine is the practice of diagnostic or therapeutic measures conducted primarily not to ensure the health of the patient, but as a safeguard against possible malpractice liability. Fear of litigation has been cited as the driving force behind defensive medicine...
, or "[altering] clinical behavior because of the threat of malpractice liability." Of physicians surveyed, 43% reported using digital imaging technology in clinically unnecessary circumstances, which includes costly MRIs and CAT scans. Forty-two percent of respondents reported that they had taken steps to restrict their practice in the previous 3 years, including eliminating procedures prone to complications, such as trauma surgery, and avoiding patients who had complex medical problems or were perceived as litigious. This practice restriction hits rural areas especially hard, as small towns find themselves without practitioners in high-risk areas such as obstetrics
Obstetrics
Obstetrics is the medical specialty dealing with the care of all women's reproductive tracts and their children during pregnancy , childbirth and the postnatal period...
and emergency medicine
Emergency medicine
Emergency medicine is a medical specialty in which physicians care for patients with acute illnesses or injuries which require immediate medical attention. While not usually providing long-term or continuing care, emergency medicine physicians diagnose a variety of illnesses and undertake acute...
, or practices without competition as physicians consolidate into single practices to distribute the high costs of malpractice insurance premiums.
A few of the changes frequently advocated include limits on punitive damages
Punitive damages
Punitive damages or exemplary damages are damages intended to reform or deter the defendant and others from engaging in conduct similar to that which formed the basis of the lawsuit...
, limits on non-economic damages
Non-economic damages caps
Non-economic damages caps are controversial tort reforms to limit damages for intangible harms such as severe pain, physical and emotional distress, disfigurement, loss of the enjoyment of life that an injury has caused, including sterility, physical impairment and loss of a loved one, etc...
, limiting the collateral source doctrine, use of court-appointed expert witnesses, elimination of elections for judges, reducing appeal bond requirements
Supersedeas bond
A supersedeas bond, also known as a defendant's appeal bond, is a type of surety bond that a court requires from an appellant who wants to delay payment of a judgment until the appeal is over....
for defendants faced with bankruptcy, "venue reform", which limits the jurisdictions within which one can file a lawsuit, limits on contingency fees, the adoption of the English Rule of "loser pays" (the defeated party must pay both the plaintiff's and the defendant's expenses), and requiring that class action
Class action
In law, a class action, a class suit, or a representative action is a form of lawsuit in which a large group of people collectively bring a claim to court and/or in which a class of defendants is being sued...
lawsuits with nationwide plaintiffs be tried in federal courts, eliminating awards for pre-judgment interest.
Many of these measures tend to benefit defendants; others, such as the English rule, sanctions for delay, and early-offer settlement requirements, could have benefits to plaintiffs in some cases.
Not all tort reform supporters support all proposed tort reforms. For example, there is a split over whether the collateral source doctrine should be abolished, and there is a healthy debate over whether it would be beneficial to further restrict the ability of attorneys to charge contingent fee
Contingent fee
A contingent fee or conditional fee is any fee for services provided where the fee is only payable if there is a favourable result...
s.
Disputed issues
Critics of tort reform contend that real purpose of the proposed changes is to shield businesses, especially large corporations, from having to pay just compensation to consumers, patients and clients for damages incurred from fraudFraud
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...
, negligence
Negligence
Negligence is a failure to exercise the care that a reasonably prudent person would exercise in like circumstances. The area of tort law known as negligence involves harm caused by carelessness, not intentional harm.According to Jay M...
, medical malpractice
Medical malpractice
Medical malpractice is professional negligence by act or omission by a health care provider in which the treatment provided falls below the accepted standard of practice in the medical community and causes injury or death to the patient, with most cases involving medical error. Standards and...
or other legitimate tort claims. They contend that limitations on punitive damages
Punitive damages
Punitive damages or exemplary damages are damages intended to reform or deter the defendant and others from engaging in conduct similar to that which formed the basis of the lawsuit...
and other restrictions on plaintiff's traditional rights will reduce corporate accountability. Because corporations typically engage in a cost-benefit analysis before considering whether to stop a wrongful action (such as polluting or not enacting proper measures for safety), they contend that corporations will decide that the cost of changing a wrongful practice would be greater than the cost of continuing it, unless there is the chance that the cost of continuing will be made greater by a successful lawsuit. In this view, the prospect of paying a small damage award would have little or no effect in correcting the wrongdoing, and would essentially allow the corporation to continue an unsafe practice unless state or federal regulators interceded.
Tort reform supporters argue that this precisely describes the problem: lawsuits over socially beneficial practices increase the costs of those practices, and thus improperly deter innovation and other economically desirable activity. They further suggest that small businesses are hurt worse by the threat of litigation than large corporations are, because the legal expenses from a single lawsuit can bankrupt a small businessperson.
How would tort reform affect safety?
Proponents of the existing tort system contend that tort reform advocates exaggerate the costs and ignore the benefits of the current tort system. For example, consumer advocates and legal scholars contend that lawsuits encourage corporations to produce safer products, discourage them from selling dangerous products such as asbestos, and encourage more safe and effective medical practices.http://www.atla.org/pressroom/FACTS/products/CasesThatMadeADifference.aspx Beginning in the early 1980s, Professor Stephen Teret and other faculty at The Johns Hopkins UniversityJohns Hopkins University
The Johns Hopkins University, commonly referred to as Johns Hopkins, JHU, or simply Hopkins, is a private research university based in Baltimore, Maryland, United States...
School of Public Health argued that tort litigation was an important tool for the prevention of injuries. While Teret acknowledged that the primary purpose of tort lawsuits usually is to recover money damages for the injured persons, as compensation for their medical and other costs, he identified several ways that litigation can also enhance safety for everyone, including:
In contrast, a 2006 study by Emory University
Emory University
Emory University is a private research university in metropolitan Atlanta, located in the Druid Hills section of unincorporated DeKalb County, Georgia, United States. The university was founded as Emory College in 1836 in Oxford, Georgia by a small group of Methodists and was named in honor of...
professors Paul Rubin and Joanna Shepherd argued that tort reform actually saved tens of thousands of lives because "lower expected liability costs result in lower prices, enabling consumers to buy more risk-reducing products such as medicines, safety equipment, and medical services, and as consumers take additional precautions to avoid accidents." They also concluded that "caps on noneconomic damages, a higher evidence standard for punitive damages, product liability reform, and prejudgment interest reform lead to fewer accidental deaths, while reforms to the collateral source rule lead to increased deaths."
Tort reform advocates cite a 1990 study of auto safety improvements by Harvard University
Harvard University
Harvard University is a private Ivy League university located in Cambridge, Massachusetts, United States, established in 1636 by the Massachusetts legislature. Harvard is the oldest institution of higher learning in the United States and the first corporation chartered in the country...
professor John D. Graham
John D. Graham
John D. Graham was a Ukrainian-born American Modernist / figurative painter.He was born Ivan Gratianovitch Dombrowsky in Kiev, Ukraine...
for a conference at the Brookings Institution
Brookings Institution
The Brookings Institution is a nonprofit public policy organization based in Washington, D.C., in the United States. One of Washington's oldest think tanks, Brookings conducts research and education in the social sciences, primarily in economics, metropolitan policy, governance, foreign policy, and...
found that
Graham further notes that
Another presenter at the same Brooking Institution conference, Murray Mackay of the University of Birmingham
University of Birmingham
The University of Birmingham is a British Redbrick university located in the city of Birmingham, England. It received its royal charter in 1900 as a successor to Birmingham Medical School and Mason Science College . Birmingham was the first Redbrick university to gain a charter and thus...
, claimed safety (and other) innovations were inhibited by fear of lawsuits:
The effect of tort reform on medical outcomes has been studied with mixed results. A 2008 study found worse childbirth outcomes for mothers and infants in states with caps on non-economic damages. The Klick/Stratman paper cited above found several effects of specific tort reforms on infant mortality that lost statistical significance when looked at more closely—that is, correlation with other state-specific factors wiped out apparent increases in mortality from joint and several liability reform but also wiped out apparent decreases in mortality from capping economic damages and restrictions on contingency fees. The only tort reform effect that proved robust was a negative effect of collateral source reform on black infant mortality.
Proponents of tort reform counter by pointing to data from New Zealand, which has abolished its medical tort system but has medical error rates close to those in the United States. Tort reform advocates, including Paul Offit
Paul Offit
Paul A. Offit, M.D., is an American pediatrician specializing in infectious diseases and an expert on vaccines, immunology, and virology. He is the co-inventor of a rotavirus vaccine that has been credited with saving hundreds of lives every day. Offit is the Maurice R...
, also argue that litigation has driven from the U.S. marketplace many useful and safe medical advances, including Bendectin
Bendectin
Bendectin is a combination of pyridoxine and doxylamine prescribed to treat nausea and vomiting of pregnancy or morning sickness.-History:...
(the withdrawal of which has led to a doubling of hospital admissions for morning sickness
Morning sickness
Morning sickness, also called nausea gravidarum, nausea, vomiting of pregnancy , or pregnancy sickness is a condition that affects more than half of all pregnant women. Related to increased oestrogen levels, a similar form of nausea is also seen in some women who use hormonal contraception or...
) and vaccine
Vaccine
A vaccine is a biological preparation that improves immunity to a particular disease. A vaccine typically contains an agent that resembles a disease-causing microorganism, and is often made from weakened or killed forms of the microbe or its toxins...
s for Lyme disease
Lyme disease
Lyme disease, or Lyme borreliosis, is an emerging infectious disease caused by at least three species of bacteria belonging to the genus Borrelia. Borrelia burgdorferi sensu stricto is the main cause of Lyme disease in the United States, whereas Borrelia afzelii and Borrelia garinii cause most...
and Group B Streptococcal disease, which kills one hundred infants per year.
Frivolous lawsuits
Under some interpretations of the law, a frivolous lawsuit is one that cannot reasonably be supported under existing legal precedentPrecedent
In common law legal systems, a precedent or authority is a principle or rule established in a legal case that a court or other judicial body may apply when deciding subsequent cases with similar issues or facts...
or under a good-faith
Good faith
In philosophy, the concept of Good faith—Latin bona fides “good faith”, bona fide “in good faith”—denotes sincere, honest intention or belief, regardless of the outcome of an action; the opposed concepts are bad faith, mala fides and perfidy...
argument for a change in the law. However, the term has a broader rhetorical definition; in political debates, "frivolous" is also used to describe tort
Tort
A tort, in common law jurisdictions, is a wrong that involves a breach of a civil duty owed to someone else. It is differentiated from a crime, which involves a breach of a duty owed to society in general...
lawsuits where there is only a remote link between the conduct of the defendant
Defendant
A defendant or defender is any party who is required to answer the complaint of a plaintiff or pursuer in a civil lawsuit before a court, or any party who has been formally charged or accused of violating a criminal statute...
and the injuries alleged by the plaintiff
Plaintiff
A plaintiff , also known as a claimant or complainant, is the term used in some jurisdictions for the party who initiates a lawsuit before a court...
or where the damages
Damages
In law, damages is an award, typically of money, to be paid to a person as compensation for loss or injury; grammatically, it is a singular noun, not plural.- Compensatory damages :...
sought by the injured plaintiff are perceived to be too high for the injuries sustained. Tort reform advocates also complain about lawsuits that are brought based on purely hypothetical damages where the plaintiffs have suffered no tangible harm whatsoever, or where the harm caused could be traced to elements of excessive negligence or irresponsibility on the part of the claimant. Real or fictional frivolous lawsuits are a popular target of American humor. Claims by proponents of tort reform that frivolous lawsuits are common, costly, and based on the contingent-fee system of paying lawyers have been contradicted by others.
Existing rules, however, regulate the prosecution of "frivolous" lawsuits. Under already existing law in every U.S. jurisdiction, if a defendant or the judge believes that a plaintiff has misrepresented the facts or the law or has brought a “frivolous” pleading, the defendant, or the court on its own initiative, may ask for the action to be thrown out and for the attorney bringing the action to be penalized with a variety of sanctions. For example, Rule 11 of the Federal Rules of Civil Procedure provide in part: "By presenting to the court a pleading, written motion, or other paper--whether by signing, filing, submitting, or later advocating it--an attorney or unrepresented party certifies that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances: . . . (2) the claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law; [and] (3) the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery." If the court decides that the plaintiff has violated this rule, it has wide discretion to sanction the offending party, the party’s attorney or both, including the discretion to dismiss the plaintiff’s claim or claims, order the plaintiff, the plaintiff’s attorney or both to pay money, reprimand the attorney and/or refer the offending attorney to the applicable disciplinary authorities, among other things. Ethical rules also forbid attorneys from filing "frivolous" lawsuits. State courts and bar associations typically publish sanctions imposed on attorneys for violations of these rules. A simple review of these published opinions demonstrates that courts take violations of their pleading and ethical rules seriously.
Regulation through litigation
Advocates of tort reform also complain of regulation through litigationRegulation through litigation
Regulation through litigation refers to changes in society brought about by litigation, rather than legislation or regulation....
, the idea that litigation is being used to achieve regulatory ends that advocates would not be able to achieve through the democratic process. For example, Rep. Rick Boucher
Rick Boucher
Frederick Carlyle "Rick" Boucher is the former U.S. Representative for , serving from 1983 until 2011. He is a member of the Democratic Party.-Early life, education and career:...
(D-VA) argued in support of a 2005 federal tort reform that gave immunity to gun manufacturers in certain lawsuits because such lawsuits were "nothing more than thinly veiled attempts to circumvent the legislative process and achieve gun control through litigation"; reform supporters complained that (and the Pentagon
The Pentagon
The Pentagon is the headquarters of the United States Department of Defense, located in Arlington County, Virginia. As a symbol of the U.S. military, "the Pentagon" is often used metonymically to refer to the Department of Defense rather than the building itself.Designed by the American architect...
supported the bill on the grounds that) the plaintiffs were trying to "sue [gun manufacturers] out of existence" by forcing them to incur $250 million in legal defense expenses, while gun control supporters argued that the legislation took "away the right of victims to be able to have their day in court," that the bill gave unprecedented immunity to a single industry, and that the law was unconstitutional.
Healthcare industry
Tort reform advocates argue that by limiting the threat of frivolous lawsuits, the medical industry would migrate away from practicing defensive medicineDefensive Medicine
Defensive medicine is the practice of diagnostic or therapeutic measures conducted primarily not to ensure the health of the patient, but as a safeguard against possible malpractice liability. Fear of litigation has been cited as the driving force behind defensive medicine...
. This would reduce the number of unnecessary tests and procedures, typically performed under patient request, thereby reducing the costs of medical care in general. As an argument against the current system, tort reformers link the rising costs of premiums for physicians' medical malpractice
Medical malpractice
Medical malpractice is professional negligence by act or omission by a health care provider in which the treatment provided falls below the accepted standard of practice in the medical community and causes injury or death to the patient, with most cases involving medical error. Standards and...
insurance to the rising cost of personal and group policy health insurance coverage. California's Medical Injury Compensation Reform Act
Medical Injury Compensation Reform Act
The Medical Injury Compensation Reform Act of 1975 was a statute enacted by the California Legislature in August 1975 which was intended to lower medical malpractice liability insurance premiums for healthcare providers in that state by decreasing their potential tort liability...
has been cited as a model for tort reform in health care.
Others deny that medical malpractice suits play a significant role in the cost of health care. Including legal fees, insurance costs, and payouts, the cost of all US malpractice suits comes to less than one-half of 1 percent of health-care spending. Other recent research suggests that malpractice pressure makes hospitals more efficient, not less so: "The recent focus by the American Medical Association and physicians about the dramatic increases in medical malpractice insurance premiums, and their suggestion of a cap on non-economic damages, deserves a closer look. According to Baicker
Katherine Baicker
Katherine Baicker is an American economist and a professor of health economics in the Department of Health Policy and Management at the Harvard School of Public Health.- Biography :...
and Chandra (2004), increases in premiums are not affected by past or present malpractice payments, but may increase due to other unrelated factors. Chandra, Nundy, and Seabury (2005) find that the rising cost of medical services may explain the bulk of the growth of “compensatory awards”. They also find that the greatest ten percent of the malpractice payments have grown at a smaller pace than the average payment for the years 1991 and 2003. This means that the “medical malpractice crisis” is not necessarily fueled by the growth in malpractice payments. Furthermore, malpractice pressure actually forces our hospitals to be technically more efficient. This implies that existence of the medical malpractice system is beneficial, and its strength should not be diluted by either putting caps on non-economic damages or by decreasing the statute of limitations."
There has been a noticeable drop in medical malpractice insurance premiums for physicians in states that have enacted Tort Reform. Particularly ones that capped non-economic damages such as Texas did in 2003. For example, The Doctors Company
The Doctors Company
The Doctors Company is a medical malpractice insurance company headquartered in Napa, California, USA.-Description:The Doctors Company claims to be the largest insurer of physician and surgeon medical liability in the U.S., with nearly 55,000 members nationwide, over $3 billion in assets, and more...
, a physician-owned medical liability insurer, was insuring OB/GYNs at a mature claims-made rate of $131,601, which was a 20% increase from the previous year. As of 2008, the most an OB/GYN was paying for a liability insurance policy with The Doctors Company
The Doctors Company
The Doctors Company is a medical malpractice insurance company headquartered in Napa, California, USA.-Description:The Doctors Company claims to be the largest insurer of physician and surgeon medical liability in the U.S., with nearly 55,000 members nationwide, over $3 billion in assets, and more...
was $64,714. States that have not enacted Tort Reform legislation tend to have a higher cost of professional medical liability insurance than states that do.
Opponents of tort reform legislation often reference the story of Frank Cornelius, whose New York Times op-ed piece, “Crushed by My Own Reform,” told of allegedly negligent procedures performed by his physicians. In 1975, Cornelius had fought for damage caps, but he later came to repent of his role in that campaign.
Some say that federal licensing is a better approach and a strong central regulatory body is the answer to deal with negligent physicians who cross state lines http://www.nytimes.com/1994/10/16/opinion/l-to-curb-malpractice-try-federal-licensing-538043.html?scp=1&sq=crushed+by+my+own+reform&st=nyt
Controversy over the impact on business
Some supporters of tort reform posit that reforms can significantly reduce the costs of doing business, thus benefiting consumers and the public in the long run. Harvard Business SchoolHarvard Business School
Harvard Business School is the graduate business school of Harvard University in Boston, Massachusetts, United States and is widely recognized as one of the top business schools in the world. The school offers the world's largest full-time MBA program, doctoral programs, and many executive...
professor Michael E. Porter stated: "product liability is so extreme and uncertain as to retard innovation. The legal and regulatory climate places firms in constant jeopardy of costly and … lengthy product suits. The existing approach goes beyond any reasonable need to protect consumers, as other nations have demonstrated through more pragmatic approaches." A commission by the American Insurance Association and co-authored by Nobel Prize
Nobel Prize
The Nobel Prizes are annual international awards bestowed by Scandinavian committees in recognition of cultural and scientific advances. The will of the Swedish chemist Alfred Nobel, the inventor of dynamite, established the prizes in 1895...
winner Joseph Stiglitz to look at the effects of bankruptcies from asbestos litigation on workers in the asbestos industry; the study estimated that 52,000 jobs were lost.
Critics of the tort reform movement dispute the claim that the current tort system has a significant impact on national or global economies. The Economic Policy Institute
Economic Policy Institute
The Economic Policy Institute is a 501 non-profit, liberal, nonpartisan think tank that seeks to broaden the public debate about strategies to achieve a prosperous and fair economy...
wrote that the effect on the economy of job loss resulting from lawsuits is negligible:
In an April 2002 paper, the CEA (President Bush's Council of Economic Advisors) examined the economic impacts of the tort system in somewhat greater depth. But that paper, too, failed to demonstrate any employment effects of the tort system and made no prediction about the impact of tort law change. Even if we assume that asbestos liability legislation could somehow have prevented the loss of 2,500 jobs per year resulting from asbestosAsbestosAsbestos is a set of six naturally occurring silicate minerals used commercially for their desirable physical properties. They all have in common their eponymous, asbestiform habit: long, thin fibrous crystals...
-related bankruptcies (by, for example, limiting compensation for non-economic damages to the victims or their survivors, or by denying awards of punitive damages), the effect on overall employment and the national unemployment rate in an economy with more than 130 million payroll jobs would have been imperceptible (a change of less than two-thousandths of 1%).
Critics of tort reform also contend that the real purpose of the proposed changes is to shield businesses, especially large corporations, from having to pay just compensation to consumers, patients and clients for the harm incurred from fraud
Fraud
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...
, negligence
Negligence
Negligence is a failure to exercise the care that a reasonably prudent person would exercise in like circumstances. The area of tort law known as negligence involves harm caused by carelessness, not intentional harm.According to Jay M...
, medical malpractice
Medical malpractice
Medical malpractice is professional negligence by act or omission by a health care provider in which the treatment provided falls below the accepted standard of practice in the medical community and causes injury or death to the patient, with most cases involving medical error. Standards and...
, product liability
Product liability
Product liability is the area of law in which manufacturers, distributors, suppliers, retailers, and others who make products available to the public are held responsible for the injuries those products cause...
or other legitimate tort claims.
Specific industry protections
In response to lawsuits filed against gun manufacturers by several municipalities, a bill was proposed by the U.S. Congress in 2005 that would provide immunity to gun manufacturers for most negligence and product liability actions (and prohibit the Bureau of Alcohol, Tobacco, Firearms, and Explosives from revoking a dealer's license, even in cases where a dealer has been identified as selling a relatively high number of guns subsequently used in violent crimes).Organizations such as the United States Conference of Mayors oppose gun manufacturer immunity legislation. Others have argued that the legislation took "away the right of victims to be able to have their day in court," that the bill gave unprecedented immunity to a single industry, and that the law was unconstitutional to the extent that it conflicted with the Separation of powers
Separation of powers
The separation of powers, often imprecisely used interchangeably with the trias politica principle, is a model for the governance of a state. The model was first developed in ancient Greece and came into widespread use by the Roman Republic as part of the unmodified Constitution of the Roman Republic...
.
Dispute over "litigation explosion" claims
The American Tort Reform AssociationAmerican Tort Reform Association
The American Tort Reform Association , founded in 1986, is an organization that advocates for tort reform. Its membership consists of more than 300 businesses, corporations, municipalities, associations, and professional firms....
(ATRA) claims that "The cost of the U.S. tort system for 2003 was $246 billion, or $845 per citizen or $3,380 for a family of four" and "The Growth of U.S. tort costs have exceeded the Gross Domestic Product
Gross domestic product
Gross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living....
(GDP) by 2-3 percentage points in the past 50 years". This claim is based on a 2002 study by Tillinghast-Towers Perrin.
Opponents of tort reform deny that there has been a "litigation explosion" or "liability crisis", and contend that the changes proposed by tort reform advocates are unjustified. Records maintained by the National Center for State Courts
National Center for State Courts
The National Center for State Courts is a non-profit organization charged with improving judicial administration in the United States and around the world...
show that population-adjusted tort filings declined from 1992 to 2001. The average change in tort filings was a 15% decrease. The Bureau of Justice Statistics, a division of the Department of Justice
United States Department of Justice
The United States Department of Justice , is the United States federal executive department responsible for the enforcement of the law and administration of justice, equivalent to the justice or interior ministries of other countries.The Department is led by the Attorney General, who is nominated...
(DOJ), found that the number of civil trials dropped by 47% between 1992 and 2001. The DOJ also found that the median inflation-adjusted award in all tort cases dropped 56.3% between 1992 and 2001 to $28,000.
Tort reform advocates allege that these numbers are misleading. They claim that most liability costs come from pre-trial settlements, so the number of trials is irrelevant. Supporters further note that the number of "filings" is a misleading statistic, because modern filings are much more likely to be class actions with many more joined claims than the cases of decades ago. They also note that the choice of the 1992 start date is misleading, because the largest increase in the number of tort cases occurred between 1970 and 1992. They also argue that the use of the median, rather than the mean, is a misleading statistic for measuring the magnitude of the litigation problem.
Supporters frequently base their claims of an "explosion" in the costs of tort litigation based on annual studies by Tillinghast
Tillinghast
Tillinghast was the world's largest actuarial practice focused on insurance and a unit of Towers Perrin specializing in risk management and actuarial consulting...
/Towers Perrin
Towers Perrin
Towers Perrin was a professional services firm specialising in human resources and financial services consulting, which merged in January 2010 with Watson Wyatt to form Towers Watson...
, a major consultant to the insurance industry. In 2008, Towers Perrin reported that the cost of liability litigation has outpaced the growth of the GDP growth of 9% in estimated annual tort costs between 1951 and 2007 as opposed to a 7% average annual growth in GDP—representing 2.2% of GDP in 2004 vs. just 0.6% in 1950 and 1.3% in 1970.
The Tillinghast/Towers Perrin study has been criticized by the Economic Policy Institute
Economic Policy Institute
The Economic Policy Institute is a 501 non-profit, liberal, nonpartisan think tank that seeks to broaden the public debate about strategies to achieve a prosperous and fair economy...
, a progressive think tank: "Although TTP's estimate is widely cited by journalists, politicians, and business lobbyists, it is impossible to know what the company is actually measuring in its calculation of tort costs, and impossible to verify its figures, because TTP will not share its data or its methodology, which it claims are 'proprietary.'" Tort reform supporters claim that the Towers Perrin numbers are underestimates in many ways.
Corporate lawsuit abuse
Tort reform opponents argue that corporations and insurance companies are the worst abusers of the litigation system. In particular, they contend, corporations often use their enormous resources to unfairly delay trial, pursue frivolous appeals, and contest claims in which liability is clear. In response, a number of tort reform supporters argue that that criticism is not a reason to oppose tort reform; such abuse would be deterred by proposed tort reforms such as "loser pays," which would prevent large corporations from using litigation as a cudgel against individuals and small businesses who cannot afford to defend themselves in court by providing an incentive for law firms to provide contingent defense. Opponents of tort reform contend that most private citizens would be afraid to sue wealthy corporations or insurers if they could be bankrupted by an award of the defendant's legal fees if they lost. This would limit legitimate claims, and effectively deny many citizens a forum to redress the harm caused them.Debates over individual reforms in the United States
A number of proposals have been made by advocates of tort reform, although these proposals are not agreed on by all 'tort reformers' and are considered by many opponents a roll-back of the reforms of the twentieth century. The collateral source ruleCollateral source rule
The collateral source rule, or collateral source doctrine, is an American case law evidentiary rule that prohibits the admission of evidence that a victim's damages were or will be compensated from some source other than the damages awarded against the Defendant...
, for example, dates back to 1854.
Non-economic damages caps
Non-economic damages caps place limits on a jury's ability to award damages to victims for pain and suffering and loss of enjoyment of life as well as punitive damages. The purpose of these reforms is to allow for fair compensation for victims while preventing excessive, emotionally-driven jury awards from bankrupting entire organizations and leading to job losses and cost increases for consumers.Proposals to cap non-economic damages are one of the most frequently-proposed tort reforms, and have generated controversy over their fairness, efficacy, and constitutionality. Critics complain that limitations on punitive damages
Punitive damages
Punitive damages or exemplary damages are damages intended to reform or deter the defendant and others from engaging in conduct similar to that which formed the basis of the lawsuit...
and other restrictions on plaintiff's traditional rights will reduce corporate accountability. Because corporations engage in a cost-benefit analysis before considering whether to stop a wrongful action (such as polluting or not enacting proper measures for safety), caps on damages may well encourage corporate malfeasance. They contend that the prospect of paying a small damage award provides too little incentive to correct the wrongdoing, and would allow the corporation to profitably continue an unsafe practice.
For example, tort reform critics point to the story surrounding the Ford Pinto, where accountants determined that the expected payout in wrongful death suits would be less than making a design change to prevent the gas tanks from blowing up on minimum impact. "This cost-benefit analysis" that Ford completed found "that Ford should not make an $11-per-car improvement that would prevent 180 fiery deaths a year," because doing so would be a net cost. (This analysis valued human lives at $200,725 each.) In other words, it was cheaper for Ford to fend off wrongful death lawsuits than to implement the safety improvement. For tort reform critics, the prospect of unpredictably large damage awards would reduce the incentive that companies have to behave in this manner.
Joint and several liability
Tort reformers have had the most legislative success in limiting the common lawCommon law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...
rule of joint and several liability
Joint and several liability
Where two or more persons are liable in respect of the same liability, in most common law legal systems they may either be:* jointly liable, or* severally liable, or* jointly and severally liable.-Joint liability:...
, often replacing it with a rule of proportionate liability. Of the forty-six states that had a joint and several liability rule, thirty-three states have abolished or limited the rule.http://www.atra.org/show/7345 Opponents of tort reform contend that the elimination of the rule would under-compensate people who had the misfortune to be hurt by more than one person, if at least one of the defendants does not have the financial means to pay his or her share of proportionate liability.
Loser pays
Nearly every Western democracy follows the "English rule," which requires the loser of a civil suit to compensate the winner for his or her attorney's fees. For example, after authors Michael BaigentMichael Baigent
Michael Baigent is an author and speculative theorist who co-wrote a number of books that question mainstream perceptions of history and the life of Jesus. He is best known as co-writer of the book The Holy Blood and the Holy Grail....
and Richard Leigh
Richard Leigh (author)
Richard Harris Leigh was a novelist and short story writer born in New Jersey, USA to a British father and an American mother, who spent most of his life in the UK. Leigh earned a BA from Tufts University, a Master's degree from the University of Chicago, and a Ph.D...
lost their plagiarism litigation over The Da Vinci Code
The Da Vinci Code
The Da Vinci Code is a 2003 mystery-detective novel written by Dan Brown. It follows symbologist Robert Langdon and Sophie Neveu as they investigate a murder in Paris's Louvre Museum and discover a battle between the Priory of Sion and Opus Dei over the possibility of Jesus having been married to...
in a British court, they were ordered to pay the defendants' $1.75 million in attorneys' fees.
The "American rule" differs; in most cases, each party bears its own expense of litigation. Supporters of tort reform argue that loser-pays rules are fairer, would compensate winners of lawsuits against the costs of litigation, would deter marginal lawsuits and tactical litigation, and would create proper incentives for litigation, and argue for reforms that would require compensation of winning defendants some or all the time. In federal courts, debate has focused on the scope of Federal Rule of Civil Procedure Rule 11, which sanctions attorneys in some situations for making frivolous filings.
Opponents argue that such rules would have had a chilling effect on civil rights litigation. Proposals to limit frivolous lawsuits have been criticized on the grounds that the restrictions could be used to impede individuals attempting to enforce civil rights laws, according to The Federal Judicial Center's Study of Rule 11. Robert L. Carter
Robert L. Carter
Robert Lee Carter is a U.S. civil rights activist and judge.-Personal history and early life:Robert Lee Carter was born on March 11, 1917, in Careyville, Florida. While still very young, his mother moved north to Newark, New Jersey, where he was raised...
, United States District Court Judge for the Southern District of New York, and Rep. Sheila Jackson Lee
Sheila Jackson Lee
Sheila Jackson Lee is the U.S. Representative for , serving since 1995. The district includes most of inner-city Houston. She is a member of the Democratic Party.-Early life and education:...
have both argued that Brown v. Board of Education
Brown v. Board of Education
Brown v. Board of Education of Topeka, 347 U.S. 483 , was a landmark decision of the United States Supreme Court that declared state laws establishing separate public schools for black and white students unconstitutional. The decision overturned the Plessy v. Ferguson decision of 1896 which...
would have been called frivolous. In response, reform supporters note that victorious civil rights litigation could hardly be deemed "frivolous"; that desegregation was accomplished through legislative, rather than judicial action; and that reform opponents overstate the importance of litigation in the civil rights movement.
Tort reform in US politics
Tort reform is controversial. George W. BushGeorge W. Bush
George Walker Bush is an American politician who served as the 43rd President of the United States, from 2001 to 2009. Before that, he was the 46th Governor of Texas, having served from 1995 to 2000....
made tort reform a centerpiece of his successful run for Texas
Texas
Texas is the second largest U.S. state by both area and population, and the largest state by area in the contiguous United States.The name, based on the Caddo word "Tejas" meaning "friends" or "allies", was applied by the Spanish to the Caddo themselves and to the region of their settlement in...
governor and of his second-term domestic policy agenda. In the 2004 presidential election, Democratic vice presidential nominee John Edwards
John Edwards
Johnny Reid "John" Edwards is an American politician, who served as a U.S. Senator from North Carolina. He was the Democratic nominee for Vice President in 2004, and was a candidate for the Democratic presidential nomination in 2004 and 2008.He defeated incumbent Republican Lauch Faircloth in...
, a successful trial attorney, was criticized by tort reform advocates for lawsuits that he brought against obstetricians on behalf of children who suffered severe birth injuries; reformers criticized the suits as relying on "junk science
Junk science
Junk science is a term used in U.S. political and legal disputes that brands an advocate's claims about scientific data, research, or analyses as spurious. The term may convey a pejorative connotation that the advocate is driven by political, ideological, financial, or other unscientific...
", while Edwards denied the allegation.
Republican lobbyist Grover Norquist
Grover Norquist
Grover Glenn Norquist is an American lobbyist, conservative activist, and founder and president of Americans for Tax Reform...
points out possible political motivations for tort reform, writing in American Spectator that "Modest tort reform, much of which has been actively considered by committees in both houses, would defund the trial lawyers, now second only to the unions, and this is debatable, as the funding source of the Left in America." But the debate over tort reform is not always a partisan affair. As a senator, Barack Obama
Barack Obama
Barack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office. Obama previously served as a United States Senator from Illinois, from January 2005 until he resigned following his victory in the 2008 presidential election.Born in...
voted for the Class Action Fairness Act of 2005
Class Action Fairness Act of 2005
The U.S. Class Action Fairness Act of 2005, 28 U.S.C. Sections 1332, 1453, and 1711–1715, expanded federal jurisdiction over many large class-action lawsuits and mass actions taken in the United States....
and for the FISA Amendments Act
FISA Amendments Act of 2008
The FISA Amendments Act of 2008 is an Act of Congress that amended the Foreign Intelligence Surveillance Act.-Background:...
, which granted civil immunity to telecommunications companies that cooperated with NSA warrantless wiretapping
NSA warrantless surveillance controversy
The NSA warrantless surveillance controversy concerns surveillance of persons within the United States during the collection of foreign intelligence by the U.S. National Security Agency as part of the war on terror...
operations. In the 2000 presidential election, the Democrats' vice presidential nominee, Senator Joe Lieberman
Joe Lieberman
Joseph Isadore "Joe" Lieberman is the senior United States Senator from Connecticut. A former member of the Democratic Party, he was the party's nominee for Vice President in the 2000 election. Currently an independent, he remains closely affiliated with the party.Born in Stamford, Connecticut,...
, was a leading supporter of tort reform; former New Republic
The New Republic
The magazine has also published two articles concerning income inequality, largely criticizing conservative economists for their attempts to deny the existence or negative effect increasing income inequality is having on the United States...
and Slate
Slate (magazine)
Slate is a US-based English language online current affairs and culture magazine created in 1996 by former New Republic editor Michael Kinsley, initially under the ownership of Microsoft as part of MSN. On 21 December 2004 it was purchased by the Washington Post Company...
editor Michael Kinsley
Michael Kinsley
Michael Kinsley is an American political journalist, commentator, television host, and pundit. Primarily active in print media as both a writer and editor, he also became known to television audiences as a co-host on Crossfire...
has often criticized products liability law. And the conservative pro-life
Pro-life
Opposition to the legalization of abortion is centered around the pro-life, or anti-abortion, movement, a social and political movement opposing elective abortion on moral grounds and supporting its legal prohibition or restriction...
group Center for a Just Society
Center for a Just Society
The Center for a Just Society is a conservative non-profit organization located in Washington, DC. The Center focuses on providing conservative answers to social justice issues and is most known for the work of its Chairman, Ken Connor...
opposes many tort reform measures, arguing that litigation can be used to keep RU-486 off the market.
The United States Supreme Court sometimes weighs in on tort reform debates, but here too, the justices do not always vote according to their predicted ideological stereotypes. In the seminal case of BMW v. Gore, the court ruled that the Constitution placed limits on punitive damages, with liberal justices Stephen Breyer
Stephen Breyer
Stephen Gerald Breyer is an Associate Justice of the U.S. Supreme Court. Appointed by President Bill Clinton in 1994, and known for his pragmatic approach to constitutional law, Breyer is generally associated with the more liberal side of the Court....
and John Paul Stevens
John Paul Stevens
John Paul Stevens served as an Associate Justice of the Supreme Court of the United States from December 19, 1975 until his retirement on June 29, 2010. At the time of his retirement, he was the oldest member of the Court and the third-longest serving justice in the Court's history...
in the majority and Justices Antonin Scalia
Antonin Scalia
Antonin Gregory Scalia is an American jurist who serves as an Associate Justice of the Supreme Court of the United States. As the longest-serving justice on the Court, Scalia is the Senior Associate Justice...
and Ruth Bader Ginsburg
Ruth Bader Ginsburg
Ruth Joan Bader Ginsburg is an Associate Justice of the Supreme Court of the United States. Ginsburg was appointed by President Bill Clinton and took the oath of office on August 10, 1993. She is the second female justice and the first Jewish female justice.She is generally viewed as belonging to...
dissenting. Under Chief Justice John Roberts
John Roberts
John Glover Roberts, Jr. is the 17th and current Chief Justice of the United States. He has served since 2005, having been nominated by President George W. Bush after the death of Chief Justice William Rehnquist...
, some expect the court to be more likely to take cases that could resolve tort reform debates.
In 2010, President Barack Obama gave a speech addressing the issue of tort reform: "[t]he class action system was never intended to be a casino for lawyers to obtain jackpot attorney's fees. The class action system was created with the best of intentions- to protect consumers by allowing individuals with small, similar claims to be joined in one lawsuit. But unfortunately, it has been turned on its head, taking money from those it was meant to protect- consumers and shareholders- and making lawyers filthy rich."
United Kingdom
- Pearson CommissionPearson CommissionThe Royal Commission on Civil Liability and Compensation for Personal Injury, better known as the Pearson commission was a United Kingdom royal commission, established in 1973 under the chairmanship of Lord Pearson...
(Royal Commission on Civil Liability and Compensation for Personal Injuries) 1979 - Sir Liam Donaldson, Making Amends (2003) Crown Copyright
- Proposed NHS Redress (Wales) Measure 2007
See also
- Australian tort lawAustralian tort lawTort law in Australia is the body of precedents and, to a lesser extent, legislation, that together define the operation of tort law in Australia. A tort is a civil wrong, other than a breach of contract. Tort law is a way in which the law can interfere with relationships between private...
- AlimonyAlimonyAlimony is a U.S. term denoting a legal obligation to provide financial support to one's spouse from the other spouse after marital separation or from the ex-spouse upon divorce...
(section Alimony Reform) - English tort lawEnglish tort lawEnglish tort law concerns civil wrongs, as distinguished from criminal wrongs, in the law of England and Wales. Some wrongs are the concern of the state, and so the police can enforce the law on the wrongdoers in court – in a criminal case...
- United States tort lawUnited States tort lawThis article addresses torts in United States law. As such, it covers primarily common law. Moreover, it provides general rules, as individual states all have separate civil codes...
- Accident Compensation CorporationAccident Compensation CorporationThe Accident Compensation Corporation is a New Zealand Crown entity responsible for administering the Accident Compensation Act 2001. The Act provides support to citizens, residents, and temporary visitors who have suffered personal injuries....
- Asbestos and the lawAsbestos and the lawThis article concerns asbestos-related legal and regulatory issues. Litigation related to asbestos injuries and property damages has been claimed to be the longest-running mass tort in U.S. history...
- American Tort Reform AssociationAmerican Tort Reform AssociationThe American Tort Reform Association , founded in 1986, is an organization that advocates for tort reform. Its membership consists of more than 300 businesses, corporations, municipalities, associations, and professional firms....
- Class Action Fairness Act of 2005Class Action Fairness Act of 2005The U.S. Class Action Fairness Act of 2005, 28 U.S.C. Sections 1332, 1453, and 1711–1715, expanded federal jurisdiction over many large class-action lawsuits and mass actions taken in the United States....
- Compensation cultureCompensation culture"Compensation culture" describes a society in which it is acceptable for anyone who has suffered a personal injury to seek compensatory damages through litigation from someone connected with the injury...
- Junk scienceJunk scienceJunk science is a term used in U.S. political and legal disputes that brands an advocate's claims about scientific data, research, or analyses as spurious. The term may convey a pejorative connotation that the advocate is driven by political, ideological, financial, or other unscientific...
- Liebeck v. McDonald's Restaurants (the McDonald's coffee case)
- Medical malpracticeMedical malpracticeMedical malpractice is professional negligence by act or omission by a health care provider in which the treatment provided falls below the accepted standard of practice in the medical community and causes injury or death to the patient, with most cases involving medical error. Standards and...
- Pearson v. ChungPearson v. ChungPearson v. Chung, better known as the "pants lawsuit", is a civil case filed in 2005 by Roy L. Pearson, Jr., an administrative law judge in the District of Columbia in the United States, following a dispute with a dry cleaning company over a lost pair of trousers. Pearson filed suit against Soo...
(concerning $67m for a judge's trousers) - Private Securities Litigation Reform ActPrivate Securities Litigation Reform ActThe United States Private Securities Litigation Reform Act of 1995, Pub. L. 104-67, 109 Stat. 737 implemented several substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation, and...
- Product liabilityProduct liabilityProduct liability is the area of law in which manufacturers, distributors, suppliers, retailers, and others who make products available to the public are held responsible for the injuries those products cause...
- Punitive damagesPunitive damagesPunitive damages or exemplary damages are damages intended to reform or deter the defendant and others from engaging in conduct similar to that which formed the basis of the lawsuit...
- Accident Compensation Corporation
- Software patent debateSoftware patent debateThe software patent debate is the argument dealing with the extent to which it should be possible to patent software and computer-implemented inventions as a matter of public policy. Policy debate on software patents has been active for years. The opponents to software patents have gained more...
and Patent trollPatent trollPatent troll is a pejorative but questioned term used for a person or company who is a non-practicing inventor, and buys and enforces patents against one or more alleged infringers in a manner considered by the target or observers as unduly aggressive or opportunistic, often with no intention to...
(concerning reform of patent law, which pits similar interests against one another)
Further reading
- Congressional Budget OfficeCongressional Budget OfficeThe Congressional Budget Office is a federal agency within the legislative branch of the United States government that provides economic data to Congress....
, "The Economics of U.S. Tort Liability: A Primer" - Richard WaitesRichard WaitesRichard C. Waites, J.D., Ph.D., , a noted board certified trial attorney and social psychologist, is an internationally recognized expert in jury and courtroom decision maker research, a field he helped to develop and that he continues to advance...
. (2003) Courtroom Psychology and Trial Advocacy, Chapter Four (Section 4.05: "Juror Attitudes About Lawsuits and Tort Reform". New York: American Lawyer Media. ISBN 978-0-9705970-9-0. - Walter OlsonWalter OlsonWalter K. Olson is an author and blogger who writes mostly about tort reform. Olson is a senior fellow of the Cato Institute, a libertarian think tank in Washington DC. Formerly Olson was associated with the Manhattan Institute in New York City...
, Point of Law, "Procedure" - Walter OlsonWalter OlsonWalter K. Olson is an author and blogger who writes mostly about tort reform. Olson is a senior fellow of the Cato Institute, a libertarian think tank in Washington DC. Formerly Olson was associated with the Manhattan Institute in New York City...
, Point of Law, "Regulation Through Litigation" - Richard Epstein, Wall Street Journal, 2005 22 August, "Rule of Law: Ambush In Angleton"
- David C. Johnson, The Attack on Trial Lawyers and Tort Law, a Commonweal Institute report. October, 2003. This report looks at the origins, strategy and tactics of the tort reform movement and its ties to core conservative-movement funders and organizations.
- Jeff Milchen, 2004 27 October, "Beware of 'Junk Lawsuits' Hype" (discusses corporate abuses of the American legal system)
- Public CitizenPublic CitizenPublic Citizen is a non-profit, consumer rights advocacy group based in Washington, D.C., United States, with a branch in Austin, Texas. Public Citizen was founded by Ralph Nader in 1971, headed for 26 years by Joan Claybrook, and is now headed by Robert Weissman.-Lobbying Efforts:Public Citizen...
, 2004 Oct., "Corporate Hypocrisy in Accessing the Courts" (study asserting that corporations are the most frequent initiators of litigation in the U.S.A.) - Rachel Weiss, Tort Laws on Trial: Lawsuit Liability Measures, 2004
- Justinian Lane, 2003 30 October, "What Is Tort Reform - and Why Is It Bad for the Public?"
- Washington Post, "Advocacy Groups Blur Media Lines" (article discussing U.S. Chamber of Commerce's use of newspaper to promote tort reform)
- Manhattan InstituteManhattan InstituteThe Manhattan Institute for Policy Research is a conservative, market-oriented think tank established in New York City in 1978 by Antony Fisher and William J...
Center for Legal Policy, "Trial Lawyers Inc." (multiple reports on the economic and political power of the plaintiffs' bar) - Carl Geiger, testimony about Small Business Liability Reform Act before House Judiciary Committee
- Paul H. Rubin, Wall Street Journal, 2005 8 October, "Tort Reform Saves Lives"
- Economic Policy Institute response to response of Tillinghast/Towers Perrin
- Tillinghast/Towers Perrin response to Economic Policy Institute
- Warren RedlichWarren RedlichWarren Redlich is a lawyer and politician from Guilderland, New York. In 2004 and 2006, Redlich ran for US Congress for the 21st District of New York State as a Republican. In 2005, he briefly served as the Political Director of the Libertarian Party of New York. He is currently a town councilman...
, Personal Injury reform - Gross Negligence Standard - Donald Harris, Tort Law Reform in the United States [1991] OJLS 407-415
- The Reagan AdministrationReagan AdministrationThe United States presidency of Ronald Reagan, also known as the Reagan administration, was a Republican administration headed by Ronald Reagan from January 20, 1981, to January 20, 1989....
's Report of the Tort Policy Working Group on the Causes, Extent and Policy Implications of the Current Crisis in Insurance Availablity and Affordability (1986) - Zeiler et al. Physicians' Insurance Limits and Malpractice Payments: Evidence from Texas Closed Claims, 1990-2003, Journal of Legal Studies 36:S2 (June 2007)
- Black et al. Do Defendants Pay What Juries Award? Post-Verdict Haircuts in Texas Medical Malpractice Cases, 1988-2003, Journal of Empirical Legal Studies 4:3 (March 2007).
- What is Tort Reform?
External links
- Legal- Civil Trials and Tort Costs from Data360