Tort reform is a group of ideas that are designed to change the laws of the civil justice system so that tort litigation and damages are reduced. Generally, they involve making it harder for injured people to file a lawsuit, limiting the amount of money or damages that injured people receive as compensation for their injuries in a lawsuit, reducing damages to punish wrongdoers (punitive damages), and making it more difficult to obtain a jury trial.
Tort reform started in the 1970s. It was a movement spearheaded by insurance companies and large corporations, the goal of which was to attack the civil justice system and change rules of law, not through case-by-case adjudication, but through public perceptions and legislation limiting personal injury lawsuits.
Those who advocated for tort reform sought to persuade the public that the civil justice system was corrupt and that its operations had adverse effects on the economy. They created advertisements and lobbying campaigns that supported the notion that the judicial process is biased towards plaintiffs, resulting in high liability insurance premiums. Conservative politicians took on this cause, incorporating a change of the civil judicial system into their platforms.
How Has Tort Reform Changed Personal Injury Law?
One of the most significant arenas that tort reform has affected is medical malpractice law. In many states, there are caps on the damages that victims of medical malpractice can receive. These may be umbrella caps, limiting both economic and noneconomic damages, or the cap may be a cap on noneconomic damages. California’s Medical Injury Compensation Reform Act (MICRA) of 1975 sets a cap only on non-economic or pain and suffering damages. The cap is $250,000, a rate that never has been adjusted for inflation.
Many states responded to tort reform advocates by instituting damages caps, especially in the area of medical malpractice.
When there are caps on damages, plaintiff’s lawyers, who typically work on a contingency fee basis, are less inclined to take cases. A contingency fee means that the lawyer will take a percentage of whatever he or she is able to recover rather than a fixed sum. This means, on the one hand, that a lawyer will not take a plaintiff’s case unless he or she is pretty certain of making a large recovery. On the other hand, it also means that if the recovery is limited, it may not be feasible or in a client’s best interests for a lawyer to take a case with only the possibility of a small recovery.
Tort reform has largely been successful at curtailing medical malpractice litigation in states where caps have been put in place. In states that have implemented medical malpractice lawsuit caps, average malpractice insurance premiums have dropped because rates of litigation have fallen. In addition to caps, many states implement pre-suit litigation procedures to cut down on the number of lawsuits. These procedures require claimants to make a preliminary showing of medical negligence to a board or present an expert certificate to the court before pursuing a lawsuit against a medical professional.
Tort reform has been less effective in the area of ordinary personal injury. In most states, there is no limit to the economic or non-economic damages that may be recovered by a plaintiff who can prove liability. Some state constitutions, including those of Arkansas, Kentucky, Pennsylvania, and Wyoming, even prohibit damages caps. However, in a few states, there are caps on non-economic damages, and many states cap punitive damages. In those states, punitive damages are capped so that the plaintiff cannot receive more than two or three times the amount of actual compensatory damages.