In the U.S. Congress and at the state level, proposals to bring about "tort reform" are all around these days. But just because they are frequent doesn't mean that such proposals are good for injured people. In fact, proposals to reform personal injury law tend to range from bad to worse.
A case in point is Mayor Michael Bloomberg's speech to the New York Bar Association's annual meeting. Bloomberg claims that capping tort awards could save the city tens - if not hundreds - of millions of dollars in payouts.
According to Bloomberg, the current system is like a lottery where the majority of litigants get nothing, and several lucky plaintiffs are awarded multi-million dollar settlements for medical malpractice. The mayor reminded members of the bar that the awards - which presently cost the city $500 million per year - are paid with taxpayer money.
Instead of a few large settlements, Bloomberg suggested that the state create special health courts, similar to those used for drug offenders, and put caps on the payouts that can be awarded. This would supposedly reduce medical malpractice insurance costs for doctors and hospitals, and capping payouts would save taxpayers money.
Flaws in the Mayor's Proposal
There are many flaws inherent in tort reform proposals like Mayor Bloomberg's - flaws that may put New Yorkers at risk. For one thing, the notion that the system is clogged with frivolous suits is factually wrong. Tort filings have actually been down significantly in the past decade.
There is also the cautionary tale from Texas about what can go wrong with wrong-headed reform. In 2003, the Texas legislature passed legislation that capped medical liability for non-economic damages at $250,000 per provider, and capped the maximum award receivable at $750,000.
The Texas law was intended to protect emergency room doctors in particular because they have to make serious decisions in a high-stress environment, which may lead to a misdiagnosis and possibly a malpractice lawsuit. The problem is that because of the caps, the compensation received by injured people seldom covers their expenses. This is particularly true of those in need of long-term care, and puts patients and their families into financial crisis.
The Sky is Not Falling
Reform proposals need to be scrutinized carefully so that the rights of injured people are protected. Despite all the political posturing about the need for reform, the sky is not falling. There is no need for a form of "tort reform" that will only further harm people who are already injured.
