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Author Topic: What's so bad about tort reform?
Sancselfieme
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After researching this topic more than I usually do, I have come to a conclusion that tort reform is in the best interests of everyone except possibly M-P lawyers.

As I understand it the bill currently being considered nationally is to place a cap on "non-economic damages." This actually is not the same as "pain and suffering" that you hear the M-P attorneys crying about. This is because it is now possible to actually quanitify certain types of pain and suffering and even social consortium loss. The bill would also introduce a 1-2 year statute of limitations after discovery with exceptions for minors. Since minors have no choice whether to receieve medical care this seems reasonable that even if it is discovered when they are only 15-16, they should be able to prosecute after they turn 18 in case their guardians were negligent for some reason.


A few quick empirical facts. In 1976 CA passed the M.edical I.ndeminity C.orrection and R.eform A.ct which included:
--cap of 250K on non-economic damages
--Attorney cannot collect more than 35% of all total awards, and if total is greater than 1 million then only 15% (diminishing returns clause)
---All damages have to be paid under annuity principle (payments over time to plaintiff)
--1 year statute of limitations for all MP suits after discovery of problem, exception for minors.

Since 1976 MP ins. premiums have only risen 26%.
In neighboring Nevada, where no caps have ever been introduced, since 1976 premiums for doctors have risen higher than3000%.


Other problems these suits are causing are that states w/out caps are losing their ins. carriers. In a 2 year period from 1979-81 Alaska lost ALL of it's carriers and the state had to create a company to insure doctors. After Alaska passed it's soft cap in 81 the insurance companies came back, but because the cap is soft, has many exceptions and is high @ 400K, Alaska still only has 2 carriers in the entire state.


In Pennsylvania, Robert Booth, renowned as the best knee surgeon in the country, pays 665K per year in MP ins. He has never been successfully sued but every time a lawsuit is merely brought against him his rate increases by 20K.


A common argument I have found against caps is that caps have never decreased rates. This should actually prove that caps are necessary since they can't even reduce rates, then without them rates would(and have) rise astronomically. Caps are needed just to keep us from unfixable rate ascension.

So what are your thoughts? Am I missing some important here? What's the big problem with this kind of tort reform?

[ March 06, 2005, 09:57 PM: Message edited by: Sancselfieme ]

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Everard
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The problem is that the "non-economic" damages are the punitive damages. They are what stop people from intentionally doing things to shave costs, that cause damage.

I actually think caps on damages should be illegal... not enforced. We already have a lot of measures in place that restrict outrages damages, and in some cases, its the punitive damages that catch the attention of the offending party. Economic damages are small potatoes.

The McDonald's suit is a good example, actually. The extra millions in damages forced mcdonalds to actually pay attention to the complaints they'd been getting that their coffee was dangerously hot, and lower the temperature on their coffee. Without those damages, McD's would still be serving dangerously hot coffee (and yes, they were, so lets not argue over that again. We had that thread already), as they had been serving dangerously hot coffee despite complaints prior to the one that actually cost them several million.

Juries generally do a pretty good job in assessing damages. If you screw up a little bit, you don't get hit hard. And then there are oversight mechanisms to correct ridiculous verdicts.

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Sancselfieme
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Punitive damages are not "non-economic" damages whereas this is being concerned. Whenever the necessary malevolence or gross negligence is proven, then the cap ceases to apply completely because at that point the case ceases to be merely a malpractice suit. So, as you see, noone is arguing for regulating punitive damages, especially since punitive damages appear in less than .1% of all mapractice lawsuits.

[ March 06, 2005, 10:11 PM: Message edited by: Sancselfieme ]

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Adam Masterman
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I agree with Ev that punitive damages are absolutely necessary as a consumer protection. If its economically beneficial to make harmful products, then they will be made. I made the argument a few years ago that a large percentage of punitive damages should be directed to appropriate charities. This would maintain the economic deterrency against harmful business practices, and reduce the incentive to sue frivolously. The diminishing returns clause sounds like a good idea for redcing frivolous lawsuits as well, but a 250k cap is a bad idea. What if a company makes millions off a toxic or poisonous consumer product? With a relatively small cap, there won't ever be any reason for them to stop making dangerous products.

In any case, the cap is the key here because it will save millions for the coprporate interests behind this legislation. Our country needs tort reform, but not just to save money for corporate execs. Consumer advocates are right to oppose this in its current form.
Adam

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Gaoics79
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quote:
As I understand it the bill currently being considered nationally is to place a cap on "non-economic damages." This actually is not the same as "pain and suffering" that you hear the M-P attorneys crying about. This is because it is now possible to actually quanitify certain types of pain and suffering and even social consortium loss.
I have to plead ignorance on this distinction you're making. What other type of non-economic damage is there beside pain and suffering? I mean, I can imagine different categories under the heading of non-economic loss, but they all are basically analagous to pain and suffering, and I can't see why one would be dramatically different from the other.

Moreover, I'm also a little confused about your assertion that it is possible to quantify damages for pain and suffering. Pain and suffering is a physical/emotional state; how do you translate that into a dollar amount, in the same way you do damages for loss of income, or for damage to property? I mean, sure, you can always invent a system to quantify anything, but the point is, any such quantification would be necessarily subjective, (like all assessements of non pecuniary loss) and subject to the whim of the jury. What would be the point of capping non-pecuniary loss if it didn't include pain and suffering? What would stop the jury from just putting the money they would have awarded for the capped factors into the pain and suffering category?

And yes, I am for tort reform, especially in the medical area. There is this idiotic idea going around that whenever something goes wrong in a medical context, someone must be at fault, even though this is probably not the case in most instances. Greedy and / or stupid plaintiffs sue doctors incessantly, and the insurance companies pay up, because it's cheaper to settle than to fight a frivolous action. Juries comprised of airheads and imbeciles hand out enormous awards, mainly because they feel sorry for the plaintiffs and they say hey, what's the big deal, it's just a big faceless insurance company paying anyway!

Here in Canada, the Doctors' insurance company (I think it's called the Canadian Medical Association) will fight tooth and nail against frivolous suits, ensuring that these bottom feeders aren't able to profit from the mere accusation of negligence.

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Zyne
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There is nothing good about tort reform for anyone who is not a liar, a thief, and a cheat.

Non-economic means exactly pain and suffering. And loss of consortium. Non-economic means anything other than medical bills and lost wages. So a tort "reform" package with a 250k cap on non-economic damage really means that when your defective car catches on fire and a child is burned over 90% of his body, but survives, that child gets all of his meds, but only 250k for schooling, for his parents terrible emotional toil, and most of all for the unending pain the child's life becomes.

Minors already have a free pass on limitations. The time they have to sue does not begin to run until after they reach majority. So there's no bone there.

Limitations in most places does not run until 2-4 years after discovery of the injury. Again, this is not a concession, just a realization that, once you find out you might be hurt bad, it takes some time to find out how bad, what the cause was, and whether you even want to sue.

The problem with capping what "attorneys receive" is that the phrase is a lie. The caps apply to attorneys fees AND COSTS... which are all costs of bringing the action, including having the person examined by a doctor, getting that doctor to testify at trial, and dealing with the procedural roadblocks the defendants put up.

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Zyne
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I would also like to point out that rape, assault, battery, kidnap, trespassing, and arson are also torts.
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Gaoics79
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Oh, I see, you were talking about punitive damages. I'm not sure I would call punitive damages a type of damage for "non-economic" loss, because strictly speaking, punitive damages don't address any loss, but address a public policy objective of deterring bad behavior. They really belong in a category all on their own. As I said, pain and suffering is basically the main non-economic damage I can think of.
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Zyne
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And going for three... If they murder your mother, rape her, and cut her up in front of your eyes, that is assault. Regardless of whether you can make the criminal case and put them away forever, is her life only worth 250k?
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Sancselfieme
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First off, this bill would only apply to M-P lawsuits, it doesn't cover all torts (at least not the way I understand it, maybe I'm wrong.)

Second, if punitive damages are involved then it is no longer considered merely a M-P lawsuit and therefore the caps and standards wouldn't apply. Please do not ignore this. So all the hyperbole Zyne is spouting about criminal and malevolent intent clearly does not apply.

Third, even if these exceptions and checks were not in place, the harm these lawsuits and resulting preiums are doing to our current medical system warrants a change regardless.
Given the reasonability of these arguments I think it's hardly fair for Zyne to say there is nothing good in tort reform except for liars and cheaters.

[ March 06, 2005, 10:37 PM: Message edited by: Sancselfieme ]

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Lewkowski
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I hope many lawyers go out of business.
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towellman
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"There is nothing good about tort reform for anyone who is not a liar, a thief, and a cheat." or a doctor or a woman who wants to have an OB available within 200 miles or...
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Zyne
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What does "M-P" mean, anyway? And where's the draft of the bill?

Arson remains a tort. Capping non-economic damages for torts means capping non-economic damages for arson. Kidnapping remains a tort. Rape remains a form of assault. Etc. If this isn't what you're advocating when you rail for "tort reform", it's not my fault you're not speaking clearly.

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Zyne
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towellman *psssst* check out the insurance companies. In my state, we're well into tort "reform" yet insurance premiums keep going up...
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Gaoics79
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quote:
So a tort "reform" package with a 250k cap on non-economic damage really means that when your defective car catches on fire and a child is burned over 90% of his body, but survives, that child gets all of his meds, but only 250k for schooling, for his parents terrible emotional toil, and most of all for the unending pain the child's life becomes.
I have no problem with this. If the kid gets his medical bills paid, and is provided with all the reasonable accomodations he needs to go on with his life, then as far as I'm concerned, the tort feasor has fulfilled his primary obligation. Emotional damage is subjective. Trying to heal emotional trauma with money is like trying to cure cancer with sex; it might be very good and beneficial, and the person receiving it might very much enjoy it, but one doesn't have anything to do with the other. Tell me, why is $250,000.00 not enough for pain and suffering? How have you determined that the child's burns are worth more? What criteria have you used to come to this conclusion? And how do we know where to stop? Is $10,000,000.00 enough? $100,000,000? How do we balance the scales when we can't even be sure what we're measuring? This is the problem with your kind of thinking; it leads to chaos, where awards can pretty much soar to infinity as juries try to measure the legal equivalent of moonlight. Meanwhile, premiums skyrocket, frivolous suits flourish, and we all pay the price.
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Sancselfieme
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Zyne that is a very disengenuous argument. Of course rates still go up, but without caps rates would go up at a rate that would force ins. carriers to eventually pull out once noone could afford their rates.

1976-2005
CA with caps: 26% increase
Nevada without caps: 3000% increase


If we don't iniate caps on malpractice awards NOW rates will keep getting high at a rate that will drive doctors out of all states that don't have caps or into HMO sweat-shops.

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LetterRip
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Sanc,

you seem to have mixed correlation for causation - ie Alaska has few carriers, not because of how the laws are, but because it has a small population. Alaska also has a number of other unique factors that make it unattractive to insure for medical malpractice, such as the states size and particularly the distance to major hospitals. (Thus if a doc screws up, the odds of the patient dying or having severe complications is much greater...)

Regarding 'caps' and CA and Nevada - again, you are mixing correlation and causation and cherry picking the cases.

quote:
. For example: California adopted a $250,000 limit on “non-economic” damages in its 1976 Medical Injury Compensation Reform Act (MICRA) but malpractice insurance rates didn’t begin to drop until a broad insurance reform initiative (Proposition 103) was passed by the voters in 1988. Under Proposition 103, insurance companies, including malpractice insurers, had to: (1) rollback by 25% unless insurers could demonstrate the rates were not excessive (which they couldn’t) and (2) submit evidence to the state justifying rate increases after the rollback was in place. As a result, rates began to drop immediately.
http://www.njccj.org/medicalmalpractice/united-church.htm

For instance have a look at rate changes for 2001 to 2002 for all states,

http://www.memag.com/memag/article/articleDetail.jsp?id=116951

If you look at the rate changes for Nevada in particular it was mostly due to a single insurer who had 60% of the market withdrawing from the market.

http://www.insurancejournal.com/news/west/2004/04/12/41141.htm

What this shows is that a single insurer for a large percetange of policys is a huge risk (which anyone with finance 101 experience would know...).

What would actually have prevented the problem is limiting how much of the insurance business of a state any one insurer can cover (Ie capping it at 5-8% of the market per insurer). A second major step would be limiting how much of any particular risk an insurance policy can put the insurer at - ie it the insurer hadn't had a huge loss due to Enron this likely wouldn't have happened either.

In summary diversified risk is good - undiversified risk is bad.

Incidentally, could you show the data you are calculating your 'rate increases' from? And who (ie specialty etc.) the rate increase is for?

All data I've found suggest about 150 (167) percent rate increase for CA from 1976 to 2000 for malpractice and it would have been much higher without proposition 103 (which dropped all insurace rates by 25% and then required justifications for rate increases...). Also other reading suggests additional increases from 2000 to 2005.

LetterRip

[ March 07, 2005, 03:26 AM: Message edited by: LetterRip ]

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WarrsawPact
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quote:
Wherever I'm going, I'll be there to apply the formula. I'll keep the secret intact.
It's simple arithmetic.
It's a story problem.
If a new car built by my company leaves Chicago traveling west at 60 miles per hour, and the rear differential locks up, and the car crashes and burns with everyone trapped inside, does my company initiate a recall?
You take the population of vehicles on the field (A) and multiply it by the probable rate of failure (B), then multiply the result by the average cost of an out-of-court settlement (C).
A times B times C equals X. This is what it will cost if we don't initiate a recall.
If X is greater than the cost of a recall, we recall the cars and no one gets hurt.
If X is less than the cost of a recall, then we don't recall.
Everywhere I go, there's the burned-up wadded-up shell of a car waiting for me. I know where all the skeletons are. Consider this my job security.

Yet another snippet of Fight Club wisdom.
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Daruma28
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You mean the one person here at Ornery staunchly opposed to tort reform is *gasp* a lawyer herself?

No...you're kidding me....

lol

BTW - M-P: Malpractice

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DonaldD
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I didn't know Adam was a female lawyer... I'll need to update my internal picture of her now.
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TomDavidson
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I think a far, far better form of tort reform, above and beyond capping damages, is capping potential lawyer fees. If no legal firm could ever earn more than $250,000 from any case, I think we'd see a lot more reform. [Smile]
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Lewkowski
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"I think a far, far better form of tort reform, above and beyond capping damages, is capping potential lawyer fees. If no legal firm could ever earn more than $250,000 from any case, I think we'd see a lot more reform."

Hmm I like this idea as well. $250,000 is a bit much though. Maybe $150,000.

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Zyne
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I have never denied my lawyerly tendecies. My firm doesn't do malpractice plaintiffs work, it's too expensive. Much easier to sue drug companies.
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Daruma28
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Well Zyne, I can't say I wish you to much success in that endeavour.

I would not be alive today were it not for Glaxo-Smith Kline...and my Grandfathers would not be alive today were it not for other pharmaceutical companies...and the list goes on.

I think, in the big picture, there are certainly instances of drug companies caught in unethical practices -- but the overall good they have given humanity still far outweighs the negatives - and their products are the primary reason our life expectancy has been steadily increasing in the last century...so please don't sue them into bankruptcy! [Smile]

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LetterRip
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Daruma,

quote:
You mean the one person here at Ornery staunchly opposed to tort reform is *gasp* a lawyer herself?
I'm not Zyne (assuming you were refering to her) but I also oppose tort reform as it has generally been proposed and implemented, but not in the theoretical sense.

Ie the recent tort reform had some things that were good, but also a lot that was really awful.

The thing is, that there are plenty of corporations and individuals who are willing to do fairly morally corrupt things, if it can be done with little or no consequence. And the mirror to that, is that there are plenty of individuals and lawyers willing to exploit the system in hopes of 'winning the lottery'.

Unfortunately most tort reform seems designed to avoid responsibility for legitimate claims, as opposed to make things more reasonable.

LetterRip

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Daruma28
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OK folks, I was simply quipping to take a little jab at Zyne for humors sake. I am well aware of the fact that their is more than just herself opposed to tort reform -- this is not the first thread on the topic, afterall -- it's just at that point when I posted that, she was the only one that had weighed in as absolutely opposed at that point.

quote:

There is nothing good about tort reform for anyone who is not a liar, a thief, and a cheat.

She forgot to include one more person...

Lawyer.

But than again, considering she listed liar, theif and cheat, I guess mentioning lawyer would just be redundant. [Big Grin]


OK, that was a gratuitous swipe at lawyers...I didn't really mean it -- sort of. [Wink]

After all, my brother is a Lawyer. [Smile]

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Locus
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quote:
Originally posted by Daruma28:
OK folks, I was simply quipping to take a little jab at Zyne for humors sake. I am well aware of the fact that their is more than just herself opposed to tort reform -- this is not the first thread on the topic, afterall -- it's just at that point when I posted that, she was the only one that had weighed in as absolutely opposed at that point.

quote:

There is nothing good about tort reform for anyone who is not a liar, a thief, and a cheat.

She forgot to include one more person...

Lawyer.

But than again, considering she listed liar, theif and cheat, I guess mentioning lawyer would just be redundant. [Big Grin]


OK, that was a gratuitous swipe at lawyers...I didn't really mean it -- sort of. [Wink]

After all, my brother is a Lawyer. [Smile]

I'm not very good at cloak and dagger stuff.

Are you calling Zyne a liar or just being an ass?

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Daruma28
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Just being an ass. [Razz]
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