Articles Posted in Tort Reform

Professional and hospital liability insurers have convinced their customers that malpractice premiums will go down if meritorious malpractice claims are capped by the state legislature.

But look what happened in Florida.  According to Tallahassee.com, "the Legislature three years ago capped pain and suffering awards to $500,000 per physician and $1 million per case. Since then, [ Florida Department of Financial Services’ Consumer Advocate Steve] Burgess contends, insurance data shows medical malpractice legal costs and payouts have dropped 43.6 percent, from $989 million to $557 million."  And rates?  One insurer wants to cut them 8.6%.

Caps on human losses in malpractice cases will have no material effect on rates, and it the insurance companies believe that it will they should agree to a reduction in premiums as a matter of law.  The amount of the reduction should be determined by an independent actuary, the cost of employing such borne by each company.  The amount of saving should be available to the Legislature before voting on caps so that they can determine whether it is in the best interest of the state to save doctors and hospitals money by capping jury awards in meritorious cases.

The Economic Policy Institute has a different take on the impact of "tort reform" on the economy.

An excerpt:

The legal system for adjudicating tort claims in the United States delivers important bene?ts to the American people. Most notably, these benefits include the compensation of injured persons (including people harmed by giant corporations and other powerful interests), the deterrence of wrongdoing, greater investments in product innovation and safety, and the civilized, non-violent settlement of disputes. These benefits are rarely quantified, and critics generally focus exclusively on the system’s costs, whose magnitude and impact they tend to exaggerate, claiming that job growth, productivity, health care, and corporate profits suffer under the current system. Although a full review requires an examination of both the costs and benefits of the system, this briefing paper reviews only the tort system’s most commonly alleged economic costs and impacts and shows that most have little or no basis in reality.

In a recent post I set out in their entirety the comments of a doctor who told us of the fear he has testifying on behalf of plaintiffs in medical negligence cases.  He has written back – and here it is:

NOTE:  there are a bunch of unusal characters in the email.  I received the email in this format so I assume that something got scrambled in the transmission over the Web.  It is being published as it was received.

Hello again,

That’s the name of a new report issued by Public Citizen. From the press release:

"Public Citizen reviewed publicly available information from 1990 to 2005 from the federal government’s National Practitioner Data Bank (NPDB), which contains data on malpractice payments made on behalf of doctors as well as disciplinary actions taken against them by state medical boards or hospitals. According to the analysis, the total number of malpractice payments paid on behalf of doctors, with judgments and settlements, declined 15.4 percent between 1991 and 2005, and the number of payments per 100,000 people in the country declined more than 10 percent. In addition, the average payment for a medical malpractice verdict, adjusted for inflation, dropped eight percent in the same period. "

And this:

Just one segment of an op-ed piece in today’s Tennessean:  "How bad is medical malpractice? According to an article in the Journal of the American Medical Association by Dr. Barbara Starfield of Johns Hopkins School of Public Health, the third-leading cause of death in this country after heart problems and cancer is adverse reaction to medical treatment and medical mistakes."

The property and casualty insurance industry has reported after-tax profits of $44.9 billion for the first nine months of 2006, up 50.1% from a year earlier.  If this path continues for the last three months of the year, it "would lead insurers to their best financial performance in nearly 20 years," according to the Insurance Information Institute.

"Strong underwriting results are being reported in virtually every key line of insurance" including comp and auto insurance.

What is most interesting is that the combined ratio is down to 91.5, down from 99.8 for the same nine-month period in 2005.  The "combined ratio" is the cost of paying and adjusting claims compared with premium income.  A combined ration of 91.5 means that the industry paid out 91.5 cents for each dollar it collected in premiums.   If the industry ends the year with a combined ratio at 91.5 it would be the best result in nearly 60 years.

The Oklahoma Supreme Court has struck down a requirement that an affidavit of merit  from an expert be filed with medical negligence lawsuits.

The statute at issue "requires that a plaintiff alleging medical malpractice attach an affidavit to the petition stating that the plaintiff: 1) has consulted with a qualified expert; 2) has obtained a written opinion from a qualified expert that the facts presented constitute professional negligence; and 3) has determined, on the basis of the expert’s opinion, that the malpractice claim is meritorious and based on good cause. Plaintiffs may petition the trial court for an extension for filing the affidavit of merit not to exceed ninety days. The request must be accompanied by a showing of good cause. Although the defendant may obtain a copy of the expert’s opinion, upon which the affidavit of merit is based, the opinion is inadmissable at trial and may not be utilized in discovery."

The requirement was struck down as a violation of a provision of the Oklahoma Constitution that provides that ""The Legislature shall not except as otherwise provided in this Constitution, pass any local or special law … Regulating the practice or jurisdiction of, or changing the rules of evidence in judicial proceedings or inquiry before the courts."

Remember Newt Gingrich?  Of course you do.  Former Speaker of the House.  Author of the Contract on America.

And now, the author of a new list of issues for Republicans to focus on during the coming months, which he titles  "11 Ways to Say: "We’re Not Nancy Pelosi."

His introduction:  "Republicans should spend the next two months focused on 11 straightforward, morally grounded issues about which the American people have clearly defined beliefs.

Do you want to see how the tort deform movement has made an impact on the laws of the fifty states (and D.C.)? See this article.

The abstract: “This manuscript contains the most detailed, complete and comprehensive legal dataset of tort reforms in the U.S. The dataset records state laws in all fifty states and the District of Columbia over the last several decades. For each reform we record the effective date, a short description of the reform, whether or not the jury is allowed to know about the reform, whether the reform was upheld or struck down by the states’ supreme courts, as well as whether it was amended by the state legislator. Previous and current scholarship which studies the empirical effects of tort reforms uses various different legal datasets, (tort reforms datasets and other legal compilations), some which existed online, some created ad-hoc by the researchers. Besides being different from each other, these datasets frequently do not cover reforms adopted before 1986, miss reforms superseded after 1986, miss court-based reforms, ignore effective dates of legislation, and do not accurately record judicial invalidation of laws. It is possible that at least some of the persisting variation across empirical studies about the effect of tort reforms might be due to variations across legal datasets used. This dataset builds upon and improves existing data sources. It does so by reviewing original sources of legislation and case law to determine the exact text and effective dates. It is hoped that by creating one “canonized” dataset our understanding of the impact of tort reform on our life will increase.”

The author is Ronen Avraham, a Professor at Northwestern.