What is tort reform?
What does it mean and how does it affect the legal system?
What are the important elements you should know!
In this article, we will break down the legal definition of tort reform so you know all there is to know about it!
Keep reading as we have gathered exactly the information that you need!
Let’s dig into the legislative movement affecting tort law!
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What is tort reform
Tort reform is the phrase coined to refer to the legislative changes affecting tort law.
Tort is essentially any legal wrong that can potentially impact a person’s rights or generate civil legal liability.
As you can see from this broad definition of tort, tort law is a highly litigated issue in the United States and represents a significant weight on the overall US justice system.
In the United States, lawsuits based on tort law (or personal injury) may result in excessively high judgments awarded to the plaintiffs or the injured person.
To combat the total award, a plaintiff may recover from the defendant in a tort lawsuit, the tort reform movement is a movement aimed at legally capping the total recovery or damages.
In a personal injury lawsuit, the plaintiff can seek compensatory damages and general damages to compensate the direct damages suffered along with the pain and suffering resulting from the injurious event.
Historically, medical malpractice lawsuits have resulted in extremely high awards of compensatory and general damages.
A plaintiff can move to recover both “economic” and “non-economic” damages.
Economic losses are easy to quantify as they are provable through direct evidence, such as:
- Medical expenses
- Loss of income or wages
- Physiotherapy costs
- Medical equipment costs
Where it gets tricky is with respect to non-economic damages in personal injury cases where a dollar value must be put on things like:
- Pain and suffering
- Emotional distress
- Loss of enjoyment of life
In addition to the compensatory and general damages, depending on the circumstances of the case, the court may add another layer of damages called punitive damages.
When you tally all these types of damages up, you may end up with a significant award against a defendant.
Tort reform definition
How do you define tort reform?
Tort reform is a movement intended to change the U.S. legal system to cap or reduce the amount of money plaintiffs can claim and get awarded in tort litigation, negligence lawsuits or tort lawsuits.
Without tort reform, the plaintiff of a negligence lawsuit can seek an uncapped sum of money awarded to compensate actual damages along with non-economic damages like stress and anxiety.
Since there is no cap for the plaintiffs, the defendants are faced with the possibility of unlimited liability for damages caused due to negligence.
Pro reform arguments
What are the arguments for tort reform?
There are several good arguments that are presented with the objective of changing the legal culture in the United States.
Generally, those who argue in favour of tort reform are:
- Insurance companies
- Trade organizations
- Medical practitioners
- Medical associations
- Healthcare industry
Those in favour of tort reforms (particularly medical tort reform) state:
- Jury verdicts tend to provide damages excessively disproportionate with the actual or real damages suffered
- Jury verdicts are rendered based on sympathy with the victim
- Excessive legal exposure and risk results in skyrocketing medical costs
- Unpredictable tort damages result in very high insurance coverages
- Doctors and medical practitioners charge more to pass their costs to consumers and patients
- Patients end up paying for the uncapped legal exposure of medical care professionals
What are the arguments against tort reform?
There are also good arguments presented against capping damages in tort lawsuits.
Those who are against tort reform are:
- Victims of negligence cases
- Families of the victims
- Trial lawyers
- Legal academics
- Consumer associations
- Non-profit organizations
Those against the tort law reform state the following:
- Tort reform caps on damages will not provide plaintiffs with a fair chance at getting full compensation in case of injury
- Some argue that the tort reform movement violates the constitution
- Medical practitioners and doctors make decisions based on possible financial consequences as opposed to what is truly beneficial for the patient
Another consideration for plaintiffs is that many personal injury lawyers working on a contingency fee basis will not take cases in states where there is a cap on how much they can claim in a lawsuit.
As a result, victims of medical negligence or others cannot find adequate legal representation leaving them with less chances of getting appropriate legal compensation altogether.
It’s important to note that when the media presents a verdict as “out of control” or shows figures in the millions of dollars, it may sound excessive or unreasonable to the average reader.
However, the reality of a person disabled by an injury or having to deal with a medical issue for the rest of their lives is an extremely expensive venture.
If you factor the court’s legal award over the cost a victim of medical malpractice or negligence must assume over the next years (or perhaps the rest of their lives), the award may not look as “enriching” to the victim after all.
Medical malpractice tort reform
The movement of reforming tort law has a particular significance in medical malpractice lawsuits and the healthcare industry.
Insurance lobbies and significant tort reform in healthcare have led to many states in the U.S. capping how much a claimant can get in economic and non-economic damages in a medical malpractice or negligence lawsuit.
For example, California adopted the Medical Injury Compensation Reform Act (MICRA) in 1975, setting a cap of $250,000 on non-economic damages such as pain and suffering.
This amount is adjusted every year for inflation and represents a higher amount today but nonetheless capped.
Some other states have not capped damages in tort or personal injury lawsuits and have not adopted any tort reform act or legislation.
Scope of state reform in tort law
How are states adopting legislation to cap or reduce the amounts claimed by victims of personal injury.
Certain states have adopted laws specifically intended to cap the amount a victim of negligence can claim in a lawsuit.
There are malpractice tables showing the cap in malpractice or negligence cases.
In addition to laws adopted to specifically cap the amount of damages, tort reform laws can include:
- Reduction in the victim’s ability to file lawsuit
- Reduction in the amount of recovery a victim can obtain
- Time constraints and delays for tort lawsuits to be filed
- Legal procedural constraints
- Limits on how much attorneys may recover in personal injury cases
- Elimination of joint and several liability
- Cap on non-economic damages
- Cap on punitive damages
- Defendants to pay damages in installments
- Alternative dispute resolution procedure requirements
- Exclusion for damages caused in the event of emergency care
The ongoing tort reform movement remains a contentious issue.
There are good arguments in favour and against it.
Some states have moved in the direction of capping tort-related lawsuits while others have not made any changes.
Scope of federal tort reform
In addition to the states having to deal with the reform pressures in tort law, the federal government must also deal with reform in tort.
In this context, the federal government in the United States has also taken measures to limit the type of lawsuits filed against defendants.
Particularly, in 2005 the Congress adopted the Class Action Fairness Act (CAFA), where the law promotes a certain level of fairness in class action lawsuits against negligence cases, product liability and others.
For instance, CAFA provides the defendant the ability to have the case moved from state court to the federal court if there are at least 100 plaintiffs involved in a class action lawsuit, where a plaintiff lives outside of the state of the defendant and the combined lawsuit is no less than $5 million.
Prior to CAFA, the federal government was active in implementing federal laws to protect volunteer workers from lawsuits.
The idea is to help promote people from volunteering without fear of exposure to personal liability if something goes wrong.
The Volunteer Protection Act (VPA) is a type of law limiting the possibility a person may have to sue a volunteer worker if the action did not involve willful misconduct, recklessness or a crime.
So what is the legal definition of tort reform?
What does tort reform mean?
Let’s look at a summary of our findings.
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