Tort Reform Bills Are Silently Advancing Through Congress
BY Kerrie Spencer
Republican lawmakers have been trying, unsuccessfully, to pass tort reform laws in the United States for decades. House Republicans are now taking advantage of the attention focused on other issues to quietly advance several tort reform bills.
Tort reform makes a comeback
A tort is an action or infringement that causes loss, harm and/or injury, leading to civil legal liability.
Tort reform refers to changing or altering the ground rules of tort-based lawsuits by bringing in a financial limit maximum for pain and suffering and/or punitive damages. Tort reform may also involve restricting these types of lawsuits under the auspices of a Statue of Repose or Statute of Limitations.
Tort reform makes it more challenging to file a lawsuit and to get a jury trial, and it places limits on awards injured plaintiffs may receive in a lawsuit. Opponents of tort reform claim that it harms the victim twice, once as a result of another’s negligence and again when an award to cope with injuries is reduced, potentially affecting lifetime care. Tort reform seriously limits the chances Americans have to file lawsuits seeking compensation for injuries.
Tort reform is not new. It has been a popular issue for Republicans for many decades. Tort reform debate returns on a cyclical basis and fades away, only to reappear later. With the election of Donald Trump, tort reform has made another appearance in the House, with the Republicans introducing and passing a number of bills. The legislation attempts to introduce caps on medical malpractice awards and restrict those who wish to file a class action lawsuit.
Given what appears to be the political drive to reduce awards for injury victims seeking compensation for negligence, what are the reasons for the current re-emergence of tort reform? Large business groups and the U.S. Chamber of Commerce have suggested courts are entertaining fraudulent and frivolous lawsuits. Opponents to reform ask: If the lawsuits are frivolous or fraudulent, then how would they get to court in the first place? Lawyers often hesitate to take cases without evidence and a sound basis for believing they have a chance to prevail.
Trial attorneys argue that medical malpractice lawsuits protect patients against negligent physicians. Some medical professionals insist they support tort reform in an effort to protect patients from paying the astronomical costs of malpractice insurance. It is an argument that continues, year-after-year on a state and national level.
What has passed in the House?
So far, two of four proposed pieces of legislation have passed, The Innocent Party Protection Act (IPPA) and The Fairness in Class Action Litigation Act (FALA). The IPPA shifts some claims from supposedly sympathetic state courts to federal courts and the FALA allows class-action lawsuits to move forward in federal court only if every plaintiff in the class suffered “an injury of the same type and scope.”
Should the FALA become law, it could have a serious effect on a variety of complaints from environmental abuse to civil rights violations to personal injury lawsuits. Not all members of a class action lawsuit could possibly have been injured in precisely the same manner. More often than not, class action lawsuits encompass those who have been hurt by an action or product that has resulted in a variety of injuries and side effects.
A third bill, titled the Lawsuit Abuse Reduction Act (LARA), would mandate that federal judges sanction lawyers whose claims are later found to be frivolous. According to Lamar Smith (R-Texas) the bill would restore balance to a system skewed too far in favor of plaintiffs and their lawyers by filing junk lawsuits and therefore participating in legal extortion.
A fourth proposed act, the Protecting Access to Care Act (PACA), which has not yet been slated for a vote, would put a three-year statute of limitations in place for filing civil lawsuits in most cases where patients and/or their families believe medical negligence was the cause of an injury or death. It would also impose a $250,000 compensation cap for non-economic damages. This proposal would override legislation in states that have declared caps unconstitutional.
According to Joanne Doroshow, executive director of the Center for Justice & Democracy at New York Law School, the four bills would act to absolve the healthcare industry and large companies from harm they may cause. The chaotic rush to pass such legislation is “unprecedented” says Doroshow.
Similar pieces of legislation have been introduced into the House, but none have passed until now. Republicans, with a majority in both houses of Congress and a Republican president, are in a hurry to pass legislation. Major legislation is being processed through the system without the usual checks and balances afforded by public debate and open analysis.
Supporters of tort reform cite fraudulent lawsuits that contribute to increasing medical care costs as a further reason for passing the legislation. These lawsuits, they claim, force doctors to order unnecessary medical tests. Supporters further argue that frivolous litigation denies awards to legitimate victims, bankrupts businesses and the high medical malpractice insurance rates force doctors to leave the practice of medicine or move to a state with lower insurance rates, passing costs on to the patients.
Arguments against tort reform
Opponents of tort reform argue that fairness should prevail when a plaintiff is injured or killed by negligence. It is not fair to the victims to bar them from receiving a level of compensation that is in line with their injuries. In some states, including Pennsylvania, Arkansas and Kentucky, tort reform is unconstitutional. When it comes to medical negligence lawsuits in states with a cap on non-economic damages, victims are hard-pressed to find a lawyer to take their case, arguably a further injustice.
Does tort reform reduce healthcare costs?
The current resurrection of tort reform is tied to healthcare reform and is regarded as a way to reduce healthcare costs. Tort reform has been proposed by both party leaders as a strategy to diminish healthcare costs. However, what if any cost savings associated with tort reform exist is debatable.
According to the Working Paper 15371 titled “The Impact of Tort Reform on Employer-Sponsored Health Insurance Premiums,” by the National Bureau of Economic Research, tort reform can only have a significant impact on healthcare costs if those reforms affect the amount of healthcare services provided. In other words, tort reform must impact the medical practice as a whole and not just medical malpractice in order to achieve a possible reduction of healthcare costs.
The study focuses on four types of reform caps on non-economic damages, punitive damages, collateral source reform, and joint and several liability. Collateral source reform reduces a victim’s award if they are in receipt of private or public insurance benefits. Joint and several liability reform acts to restrict a victim’s capacity to sue defendants with deep pockets.
The overall findings indicate that caps only reduce premiums by approximately one to two percent. Rather than increasing the cost of medical care in the form of defensive medicine, tort reform reduces treatment overkill, as the drop in premiums is greater than the savings that may accrue from reduced direct liability costs. This finding may not be applicable in managed-care situations. Currently, tort reform is aimed at medical malpractice and not at medical practice as a whole, which may mean further study is needed.
Zeke Emanuel, MD, PhD, and a bioethicist, criticizes caps on damages as a method for reducing national healthcare spending. He sees too much risk in that patients injured by negligence may not receive full compensation. Part of the research used by Emanuel includes a 2009 Congressional Budget Office (CBO) estimate that capping damages would reduce national healthcare spending by only about 0.5 percent.
A February 7, 2013, opinion column in The Wall Street Journal, penned by health policy researchers, concluded that caps on non-economic damages are ineffective in significantly reducing defensive medicine.
Does tort reform, as advertised by politicians, help reduce high healthcare costs in the United States? Perhaps not in its current form. Instead, it appears that malpractice litigation’s biggest effect on the system may stem from doctors engaging in defensive medicine. Tort reform may not affect the medical system as a whole substantially enough. Further debate and study is needed to determine whether this reform is effective.
The cyclical nature of tort reform
Over the last 30 years, roughly every 6 to 10 years, malpractice insurance premiums increase by as much as 100 percent. This in itself is not surprising as cycles in the insurance industry are well known and driven by the marketplace. In good or bad markets, the price of insurance fluctuates. In a good year, it is not uncommon to see an increase in medical malpractice premiums, which in no way is tied to physicians practicing defensive medicine.
Over time, the argument in support of tort reform has become mostly focused on caps for non-economic damages, and pain and suffering. Many feel these caps have kept malpractice premiums in check. However, insurance market driven medical malpractice premiums vary from state-to-state and may even vary by county. A doctor relocating from one state to another may find premiums dropping by up to 70 percent.
In Illinois, the Department of Insurance convened hearings to investigate the relationship between medical malpractice premiums and caps. The outcome of these hearings was that there is little to no connection between insurance premiums and malpractice lawsuits in Illinois.
A major study in the New England Journal of Medicine authored by five doctors and public health experts revealed tort reform measures in three states aimed at protecting E.R. doctors from lawsuits did not reduce the number of expensive tests and procedures ordered.
Additionally, the theory that out of control juries award exceptionally large sums to plaintiffs is not borne out by the numbers. According to the Department of Justice, however, the median medical malpractice jury award is $400,000. In bench trials the median award is $631,000.
Can defensive medicine be halted or reduced by the introduction of tort reform? It appears the answer to those questions is: “Not likely.” Furthermore, opponents of tort reform will continue to argue that capping damages for a grievously injured victim is a penalty applied to an innocent plaintiff who did not cause their own injury. Tort reform, to be effective, should serve to reform the system in a way that helps victims.
To examine a complete list of state-by-state medical malpractice damage caps visit: . When reading the chart it is important to understand that caps are adjusted annually for inflation and that laws are constantly changing.
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