Tort Reform

By Jason M. Kroot, Winter 2007

"Tort reform" is a term used by its advocates to describe legal changes purportedly needed to improve our civil justice system. Proponents claim there are too many “frivolous lawsuits” in our country which have an adverse impact on our society and economy. They also decry multimillion verdicts rendered by juries. The most powerful block of tort reform advocates are insurance companies and other big business industries. Caps on non-economic damages are the most common measure proposed by tort reform advocates. These caps are usually set between $250,000 and $500,000 per case, regardless of the defendant’s conduct and regardless of the plaintiff’s injury.

Opponents of tort reform contend supporters exaggerate the costs of civil lawsuits and ignore the benefits they have on society. They maintain big business exaggerates the costs of lawsuits in order to protect their profit margin at the expense of consumer safety. For example, if seriously injured victims are unable to recover full compensation against manufacturers of dangerous products, critics contend there would be no genuine incentive for these corporations to manufacturer safer products — as opposed the most profitable products. Further, by denying just compensation to injured victims, tort reform critics argue corporations are shielded from taking full responsibility for the harm they cause. In medical malpractice, consumer advocates argue full compensation has lead to positive changes in the practice of medicine which benefit society as a whole. Without this incentive, hospitals are more inclined to focus on generating profits than on providing the safest degree of care. Holding hospitals responsible for the full harm they cause balances the equation, forcing them to consider both profits and safety.

In the end, tort reform is a complicated subject with no easy answers. Unfortunately, much of the debate has revolved around a few high profile cases like the one involving McDonald’s coffee. These and other poster child cases for tort reform have lead to broad, negative assumptions about the entire civil system. These assumptions show up in courtrooms everyday. During jury selection, many potential jurors walk in with preconceived biases against personal injury cases. Of course, human nature dictates frivolous cases will be filed. For attorneys who file these cases, civil rules exist that allow judges to order stiff sanctions against these abusers — as they should. However, an arbitrary cap on all cases is not the answer. Consider the Ford Pinto case. There, accountants (or “bean counters”) determined the expected payout in wrongful death suits would be less than costs of fixing the design defect that allowed the gas tanks to blowing up on minimal impact. As for excessive awards, judges are required to reduce their amount, often called a “remittitur.” This is done year after year. Unfortunately, reduced awards do not make headlines.