Tort Reform Myths
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Tort reform is the talk today in legal circles, particularly within the realm of personal injury litigation. It is possible that the need for tort reform may be based on some inaccurate assumptions. The reason for tort reform is to reduce the high cost of medical malpractice insurance. But will a reformation in Tort Law result in a reduction in medical malpractice premiums?
On one side of the debate are the doctors and insurance companies who believe tort law reform is necessary to reduce the cost of premiums doctors have to pay for medical malpractice insurance. The other side of the debate consists of lawyers who believe the high costs of insurance premiums doctors pay is due to insurance company price gouging and poor return on investments made by insurance companies. Lets examine some of the myths which have been the foundation for the legal argument for the reforming of the current tort law.
Tort Reform Myth 1:
Plaintiffs are awarded to much compensation from damages
Reality:
The statistics do not show that the plaintiffs is being overly compensated. The fact is that the average award for 2000 was $125,000. This data comes from National Practitioner Data Bank (NPDB). Those that want reform in Tort Law will tell you that the average reward is $1,000,000 and this data comes from Jury Verdict Research (JVR). JVR does not incorporate into their average out of court settlements. Out of court settlements result in decreased compensation to the plaintiffs and 96% of medical malpractice suits are settled out of court. It is obvious that Tort Law reformers will provide data to suit their need, but this partial data does reflect what insurance companies are actually paying to the plaintiffs.
Tort Reform Myth 2:
The amount of compensation rewarded to plaintiffs has increased tremendously over the past ten years.
Reality:
There has been a steady increase in the award granted but not at the level indicated by those who want to reform Tort Law. Government data shows that medical malpractice awards have increased at a much slower pace than claimed by JVR. According to NPDB, the median medical malpractice payment by a physician to a patient rose 35 percent from 1997 to 2001, from $100,000 to $135,000. The NPDB is the most accurate source of information that exists because it includes both verdicts and settlements. Again, as stated earlier, 96% of all medical malpractice cases are settled out of court, as opposed to decided by a jury. Out of court settlements result in much lower levels of compensation than jury verdicts.
Tort Reform Myth 3:
Rising Doctor premiums are due to increases in lawsuit awards
Reality:
Dartmouth College researchers suggests that jury awards and financial settlements for injured patients have not caused the explosive increase in doctors’ insurance premiums. This study suggests that the rise in premiums for doctors is due to insurance companies making up for a decline in returns from financial investments. For a complete article on this study go to Rising Doctor Premiums.
Tort Reform Myth 4:
Most cases result in punitive damages being rewarded. For those not familiar with law, a punitive damage reward is a court awarded amount that exceeds the economic losses and general damages of a defendant and is intended solely to punish the plaintiff because of reckless or malicious acts.
Reality:
The Department of Justice’s Bureau of Justice Statistics’ study provided data that showed that the punitive damage amount awarded to the plaintiffs was low and that only a very small percentage of the plaintiffs received this compensation. Statistically, in only 3.3% of tort trials won by plaintiffs were punitive damages awarded. The average punitive award was $38,000.
Tort Reform Myth 5:
Most tort cases are due to medical malpractice, therefore doctors should be paying a higher insurance premium for this.
Reality:
In terms of all tort cases, only 11% involve medical malpractice. Most tort cases involve automobile accidents where someone is suing another individual. Automobile cases account for 49% of all tort cases.
5 Myths of Tort Reform - Conclusion
It is clear that modifying current Tort Law will most likely not result in a reduction of the high cost of medical malpractice insurance.
The question arises, do we need tort reform based on false assumptions and inaccuracies. More importantly, how does the current Tort Law in Florida affect your case. To what degree has reformed Tort Law been instigated. To learn more about the myths of tort reform and how Tort Law reform can affect your case, confer with a personal injury attorney in your area.
