Tort Reform and Why it Hurts You

In the wake of Bush's attack on the judicial system, I am reposting an explanation on why his version of tort reform (caps on awards) is bad news for the American people.

Bush tries to pin all of the woes of the world on the legal system. I will explain to you why Bush style tort reform is no good.

1) Your life - How much is it worth? How much is the ability to walk worth to you? $10,000? $50,000? $250,000? A million? most of us would not sell our legs for any price, but damage caps are just that, an arbitrary price for the loss of your life or some type of disability. By putting a cap on awards, you are allowing a legislator to say an eye is worth $10,000, lower extremities are worth $150,000, your life is worth $250,000, etc. I think it is something that we, the American people, would want to decide for ourselves, not legislators. Legislators, who are lobbied by the insurance industry every single day, would now decide how much you are worth. A lobbyist can get a meeting with a legislator any time he wants by donating to his/her re-election campaign. Do you think you could have lunch with your congressman to explain what your views are? Probably not.

2) The system does need reforming, I will agree to that, but it is not the trial lawyers who need to be reformed. It is the Jurors who need to be educated (I am speaking as a corporate defense attorney). The lawyers do not award the damages, the jurors do. That means you, your neighbor, your plumber, your local librarian, etc. If you, the juror did not award the massive damages, then they would not exist. If you have ever found a way to "skip" out of jury duty and you think these damages are too high, then you are partially to blame. If you blame the system, remember that you are the decision makers in the system.

3) Supply and demand - if you, the juror did not award large damages, then trial attorneys would not bring these suits. A trial attorney only gets paid if he wins. It is up to the jury to make this decision. If the jurors are consistently throwing bad cases out of court, trial attorneys won't bring them. Maybe these people who get these awards deserve them, maybe they don't, but it is the jury who awards them, not the trial lawyers.

4) Big Government in your affairs - If you like smaller government than why would you want the government making these decisions for you? That is what damage caps are, government control. Right now, you get to decide on a local and personal level the fate of the injured persons. You get to hear the story of both the injured and the person accused of injuring them. Why would you want this taken out of your hands and put it in the hands of a legislator? It is better left to the local and individual level.

5) Caps don't work - there have been several states to enact damage caps and none of them have seen overall damages go down. I will analogize it to the speed limit. if the speed limit is 55, you go 55 even though you could go slower. If the speed limit is 65 even though going 55 is safer. People feel an obligation to go the maximum. The same thing in jury awards. Without a cap, a jury may award an inured party $25,000 for a particular injury. But, if you cap it at $250,000, then the jury is more likely to award $250,000 even though the damages would normally only be $25,000. It is pure psychology.

6) More dangerous products - If a business have little incentive to protect themselves from suit, the less they protect you from injury. If they could maximize profits by making a less safe product without the fear of litigation, they will (e.g. the Ford Pinto). If you have ever traveled through a 3rd world country where litigation is rare, you take your life in your own hands. There is no incentive to protect the consumer.

7) Bad doctors - prior to law school I worked in the life/health insurance industry. I have read reports from thousands of doctors. 50% of doctors are really excellent, 25% are good, 20% won't kill you, and 5% are just plain bad doctors. Malpractice premiums are like car insurance premiums. If you get into a lot of accidents, your premium is higher. Enough accidents, and you get forced out of driving. Same thing happens in medicine. If you get sued a lot, your premium goes up. This is unfair to the majority of doctors who are very diligent, but why should a bad doctor be allowed to practice at my, the patients, expense. You would be appalled if you knew the number of people who are diagnosed with a life threatening disease that there doctor just plain missed. And they just didn't miss it once, but over and over. Diseases like diabetes and kidney failure. As the old saying goes... Question: what do you call a person who got all Cs in medical school.... Answer: Doctor. Sounds bad, but some people just should not be practicing medicine.

8) Insurance companies - 50% of an insurance companies profits comes from investments, not premiums. Due to poor management and the likes of Bush buddy, Ken Lay, the insurance companies had to raise premiums to cover their losses. Therefore, the major cause of the increase has nothing to with jury awards. In fact, only 1% of medical costs can be attributed to damage awards.