Tort reform

United States[edit]

Tort reform advocates frequently contend that too many of the lawsuits filed in the United States each year are "frivolous" lawsuits.^[75] 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. 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. Opponents of tort reform argue that reformers have misstated the existence of any real factual issue and criticise tort reform as disguised corporate welfare.^[76][77]


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 too often receive an overly large per centage of the punitive damages awarded to plaintiffs in tort cases. (The typical contingent fee arrangement provides for the lawyer to retain one-third of any recovery.)^[78] A Towers Perrin 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.^[79] More recent research from the same source has found that tort costs as a per centage of GDP dropped between 2001 and 2009, and are now at their lowest level since 1984.^[80] High-profile tort cases are often portrayed by the media as the legal system's version of a lottery, 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, or "[altering] clinical behavior because of the threat of malpractice liability."^[81] Of physicians surveyed, 43% reported using digital imaging technology in clinically unnecessary circumstances, which includes costly MRIs and CAT scans.^[81] Forty-two per cent 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.^[81]


A few of the changes frequently advocated include limits on punitive damages, limits on non-economic damages, limiting the collateral source doctrine, use of court-appointed expert witnesses, elimination of elections for judges, reducing appeal bond requirements 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 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 fees.^[82]


While tort reform is frequently associated with the Republican Party, both support of and opposition to tort reform is found across the political spectrum in America.^[h] Reform of defamation torts, contrary to the general assumption that tort reform is a primarily Republican or conservative issue, is a popular cause among Democrats and liberals more generally who are concerned with lawsuits brought by wealthy corporations and individuals against critics. 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,^[85] the court ruled that the Constitution placed limits on punitive damages, with liberal justices Stephen Breyer and John Paul Stevens in the majority and Justices Antonin Scalia and Ruth Bader Ginsburg dissenting. Under Chief Justice John Roberts, some expect the court to be more likely to take cases that could resolve tort reform debates.^[86]


In March and April 2012, the Lower Rio Grande Valley in Texas was hit with two severe hailstorms. Texas Monthly wrote, "Windows were shattered. Hail knocked holes in rooftops. Unfortunate animals were beaten to death." Insurers paid out $556 million in claims to homeowners and $47 million to car owners. After the storms, thousands of lawsuits were filed against insurers and adjusters. The lawsuits were based on allegations of "low-ball payments on claims." As a reaction, a state senator introduced legislation (Senate Bill 1628) to reform hailstorm litigation.^[87] The bill represented "an almost visceral fight between the insurance industry, Texans for Lawsuit Reform and trial lawyers whose symbolic leader in storm-damage claims in Steve Mostyn of Houston."^[87] By 2014, there had been 2,000 lawsuits filed in Hidalgo County, Texas. "One local attorney had erected a billboard ‘evoking fire and brimstone’ to remind homeowners that they had to file a claim within two years." According to Texas Monthly, "By May [of 2014], there had been 5,972 lawsuits filed, with Mostyn and members of his firm filing 1,612 of them."^[87] Mostyn "had pioneered" lawsuits for storm damage after Hurricane Ike. He made over $86 million in legal fees.^[87] In February 2017, a bill was introduced in the Texas state Senate that would aim "at ending hailstorm lawsuit abuse." Texas Lt. Gov. Dan Patrick supported the bill (Senate Bill 10) and said during his State of the State address, "Hailstorm litigation is the newest form of lawsuit abuse." Patrick said that storm litigation rates had risen dramatically, causing insurance companies to increase premiums and reduce coverage. The bill would still allow hailstorm insurance claimants to sue their insurance company. It would allow plaintiffs to sue for either deceptive trade practices or unfair settlement, but not both. According to SE Texas Record, "The bill also seeks to end barratry in hail litigation, as reports of lawyers employing contractors and insurance adjusters to drum up clients have continued to surface the past several years." The bill would also prevent plaintiffs from suing their individual insurance agent. An identical bill (HB 1774) was introduced in the Texas House of Representatives.^[88]