It seems like every time the economy goes bad, or every time there’s a new Congress or legislature, there’s also heavy talk of "tort reform."
Generally, Republicans favor tort reform because it "benefits businesses", while Democrats dislike the idea because you’re permitting bad products/people. I’ve never really understood this, because both sides seem to be flipped on the issue and their desires. Mostly, Republicans favor fewer taxes, less government involvement in industry, and a free market system. Democrats generally favor more taxes, bigger government, and caps on free enterprise. In the tort reform debate, Republicans champion the ideas of caps on litigations because it hampers the free market system (although I’ve never agreed with that because it’s the quintessential free-market idea: pay and benefit from your products/services). The two sides clash in every state, and generally the issue is never resolved (click here for a previous discussion on legislation in Oklahoma).
Well, "the voice of Republicanism", Rush Limbaugh (I happen to like & sometimes agree with Rush – listening off and on since I was 12), is advocating tort reform as a method to stimulate the economy that is "the English rule" of tort law. This is a "loser pays" rule that could be beneficial (although I don’t support it at all) in high dollar cases where "frivolous" claims are filed by "greedy plaintiff’s lawyers." Everyone hates hearing how some lady made 500 gazillion dollars because she spilled hot coffee in her lap, right? (BTW, here’s a link to the real facts.)
Arguably, there are some cases that see ludicrous (i.e. the Wendy’s finger), but for the most part, people sue other because they can’t get the "justice" (i.e. an apology sometimes) for bad behavior. I’ve talked to a lot of "tort reformers", especially doctors, who don’t realize that some of the suits for malpractice could be resolved by saying "sorry that the surgery/procedure didn’t go as planned." Instead, many clam up under the "do no harm" mantra, and feel that any sort of apology countermines their proficiency as a physician. I think most people recognize that doctors are human, and despite every precaution, sometimes stuff happens.
What "chaps" me though is that by touting tort reform, many people believe that they’re going to be better off, especially in the "loser pays" market. Here’s a consideration:
In my experience 75-85% of the lawsuits filed (at least in Oklahoma) deal with issues around car accidents. In most cases, the injured plaintiff has property damage (a busted vehicle), and some physical damage (cuts, broken bones, whiplash, etc.). In the current system, plaintiff’s attorneys negotiate separate payments for the vehicle damage and the bodily injury, many times without filing a lawsuit. Insurance companies may haggle over small issues, but generally, payments can be made without increased litigation costs.
Under a loser pays system, attorneys would automatically file a lawsuit (increased cost #1), and seek the trial (increased cost # 2-infinity). Because most of the auto accident claims are "clear liability" or something similar, the loser will always pay. That’s double payment for the victim (i.e. once for the insurance and twice for the plaintiff’s attorney). In the current system, attorney’s fees are usually based on contingency fees (percentage of the total settlement). Plaintiff’s attorneys will start charging hourly rates equivelent to their current contingency rates, and also risk no out of pocket costs. Also under the current system, each side pays their own litigation costs (yes, there are a few exceptions), which helps to keep litigation cost low.
Implementing the loser pays rule seems logical because it punishes someone who files a lawsuit just to sue. In reality, you’re only curbing a small percentage of those cases, and you’ve now increased the cost for automobile insurance for every individual. Moreover, as a plaintiff’s attorney, I’m still going to take those cases against the doctors where I see liability and can make the case, I’ll just be more cautious (I already am) about those claims.
Remember, plaintiff’s attorney’s aren’t meeting with clients and saying, "gosh, your case doesn’t look so good, but let’s go ahead and sue anyway" (again, there are a few exceptions). When I get a case, especially one of medical negligence, I’m going to research, read, and review a lot of things before taking the case and filing the lawsuit. As such, if we lose in the end, it’s because of the jury and not the case. Also, I’m going to work like mad to settle the claim ahead of trial, because I know there’s massive consequences if I don’t.
Finally, advocating the loser pays method doesn’t add anything because "the loser" usually doesn’t have money to begin with. You’re going to have to sue an individual with few, if any, resources and who is essentially judgment proof. Basically, you’re never going to recover, and you’ll still owe your attorney’s bill. I can’t see any sense with trying to waste additional time and resources following this method, but, perhaps there’s an angle I’m not seeing. Let me know.
No, clearly it’s not "tort reform" that we need, rather insurance reform. Doctors and individuals can’t get coverages/payments that they need to adequately do their jobs and live their lives. While malpractice insurance continually rises (please show me a link to litigation), payments for services quickly declines. I heard my father tell me that the insurance company would rather pay $3,000 dollars for him to perform a procedure in a hospital, than $300 (the actual cost with supplies) in his office. This is stupid! We gripe at paying $3.00/gallon for gasoline, and here’s a company that’s wasting our money.
As always, if you have opposing views or some rebuttals, we’d love to hear the comments. More importantly, each of us needs to be involved in discussing these issues with our state and representatives. The issue of insurance isn’t going away and neither is tort reform.
