Tort Reform?

Debunk the myths

Argument: If juries didn't give such high awards in medical malpractice cases, malpractice insurance wouldn't be so high. So we need to cap jury awards in order to bring down insurance rates.

Response: Despite the recent dramatic increases in malpractice insurance rates, payouts in lawsuits and settlements for medical malpractice have been relatively unchanged in inflation-adjusted dollars since the mid-1980s.

In an attempt to hold down insurance costs, many states have instituted caps on jury awards in medical malpractice cases. And what happened? Rates continued to rise.

So what explains the recent explosion in malpractice insurance costs? The insurance companies' fortunes in the stock and bond markets. Simply put, when the insurance companies lost money in the markets, they increased premiums they charge doctors in order to maintain their profits. Rates have skyrocketed in the last few years because low interest rates in the bond market and the stock market's fall in 2001 reduced insurance company profits; they raised their rates in response.

The best way to bring down malpractice costs may be to weed out bad doctors. A study by Public Citizen revealed that 5% of doctors were responsible for 54% of all malpractice payouts. But only 7.6% of these dangerous doctors were ever disciplined by their states' medical boards. If doctors were willing to crack down on the incompetents in their own ranks – including revoking the licenses of the worst offenders – malpractice costs would decline dramatically.

Wrapping up

One good way to argue against tort reform, particularly when it comes to things like product liability, is to put it in terms of whom you can trust. Tort reform advocates are essentially saying that you can't trust juries made up of ordinary citizens, so instead we should simply trust corporations not to make products that harm people, or doctors not to make mistakes that can ruin people's lives. If something bad happens to you, tough luck.

The jury system is one of the cornerstones of American democracy. Among other things, it ensures that people are accountable for their actions. And the decisions are meted out not by the powerful but by regular citizens. Didn't George W. Bush go around the country claiming, "I trust the people"? But here's a funny story: in 1999, Bush's daughter Jenna was involved in a fender-bender with someone driving an Enterprise rental car. Because the other driver had a suspended license, Bush sued Enterprise.

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