Keith Mack
Tort law in the United States has undergone significant changes since the 1960s, with improvements in science and technology driving the shift from private to public risks. The primary aims of tort law are to provide relief to injured parties, impose liability on responsible parties, and deter harmful acts. However, critics argue that the current system enables frivolous lawsuits, crowds the court system, and impacts innovation and consumer costs. Tort reform seeks to address these issues by reducing plaintiffs' ability to bring litigation or lowering the damages they can claim. This includes pre-trial mechanisms to assess the worthiness of complaints and limiting punitive damages. While some states have successfully enacted tort reforms, others face legal challenges. The debate around tort law improvements centres on balancing the rights of plaintiffs and defendants while ensuring a fair and efficient legal system.
| Characteristics | Values |
|---|---|
| Focus | Shift from "private" to "public" risks |
| Tort litigators' practices | Embrace available science |
| Tort plaintiffs | No longer required to establish that harms are imminent |
| Tort reforms | Discourage non-meritorious claims, stabilize the medical malpractice insurance market |
| Pre-trial mechanisms | Assess the worthiness of medical liability complaints |
| Medical review panels | Assess the merits of a complaint |
| Strict product liability | Allow plaintiffs to recover for harms caused by defective products without proving the manufacturer was negligent |
| Federal class actions | Modern opt-out class action |
| Judges | Rely on ALI Restatements of the Law when deciding issues of state common law |
| Restatements | Advocate for expansions of liability |
| Loser-pays rules | Fairer, deter marginal lawsuits and tactical litigation |
| Litigation | Inefficient means to compensate plaintiffs |
| Fear of litigation | Curtail innovation, raise costs, increase legal costs for businesses |
| Primary aims | Provide relief to injured parties, impose liability on responsible parties, deter harmful acts |
| Torts | Shift the burden of loss from the injured party to the party at fault |
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What You'll Learn
Curtailing frivolous lawsuits
One proposed solution to reduce frivolous litigation is the adoption of the English rule, which is also a prevailing norm in European civil law jurisdictions. Under the English rule, the losing party to a case covers the victorious party's legal costs. Supporters of tort reform argue that loser-pays rules are fairer, would compensate winners of lawsuits for the costs of litigation, deter marginal lawsuits and tactical litigation, and create proper incentives for litigation.
In the UK, for example, authors Michael Baigent and Richard Leigh were ordered to pay the defendants $1.75 million in attorneys' fees after losing their plagiarism litigation over The Da Vinci Code in a British court. In contrast, under the American rule, each party typically bears its own litigation expenses.
In the United States, it is easier for victims of medical malpractice to seek compensation through the tort system. However, the American medical record in hospitals is poor, with around 195,000 deaths due to negligence per year, leading to a higher number of claims. It is debatable whether changing the law of tort would significantly reduce costs or alter practices.
To address frivolous lawsuits, some states have enacted tort reforms that better serve patients and physicians. For example, Maryland's reforms and pre-filing requirements have improved the liability climate by discouraging nonmeritorious claims and stabilizing the state's medical malpractice insurance market. In contrast, court cases are challenging reforms in at least three states: Maryland, Michigan, and Kentucky. Plaintiffs' attorneys in Maryland and Michigan are using "artful pleading" to circumvent pre-trial measures that assess the merits of a complaint, while a suit in Kentucky has challenged the constitutionality of its new law authorizing medical review boards to assess complaints.
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Reducing litigation costs
Critics of the American tort law system argue that it drives up litigation costs, which in turn raises insurance premiums, reduces real wages and overall employment, undermines corporate profits, and discourages innovation. However, advocates for the current system argue that these claims are exaggerated and unsupported by macroeconomic trends.
One way to reduce litigation costs is to curtail frivolous lawsuits, especially those brought by lawyers acting in bad faith or charging contingent fees. Procedural reforms to the tort system can help dissuade or prevent litigants from filing suit without directly altering the damages they may receive. For example, under the "modified" doctrine of comparative negligence, a party may only recover damages if it bears less than half the liability or if the other party bears more than half the liability. This prevents plaintiffs from seeking damages when they are primarily at fault.
Another proposal to reduce litigation costs is to implement the English rule, whereby the losing party to a case covers the victorious party's legal costs. Supporters of this reform argue that it would deter marginal lawsuits and tactical litigation and create proper incentives for litigation. However, critics argue that summary judgment already addresses the issue of frivolous lawsuits and that loser-pays rules could unfairly penalize plaintiffs with legitimate claims but limited financial resources.
In addition to procedural reforms, substantive changes to tort law can also help reduce litigation costs. For example, caps on non-economic and punitive damages can help contain healthcare costs, as can collateral source reform, which reduces plaintiffs' awards if they receive public or private insurance benefits. Joint and several liability reform, which limits plaintiffs' ability to target defendants with "deep pockets", can also reduce litigation costs for businesses.
Finally, it is worth noting that the impact of tort reform on healthcare costs may be limited. For example, one study found that tort reform had no effect on the premiums of fully-insured plans, suggesting that other factors, such as the presence of Health Maintenance Organizations (HMOs), may be more effective in reducing defensive medicine practices and containing costs.
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Reducing damages receivable
One proposal is to impose procedural limits on the ability to file claims. This includes addressing perceived forum shopping, where claimants take advantage of favourable jurisdictions to bring class actions. Tort reform advocates have proposed creating specialised medical courts with medically trained judges to evaluate cases and set precedents. This would involve giving up jury trials and scheduling non-economic damages.
Another proposal is to cap the awards of damages. This could include capping non-economic damages, such as pain and suffering, or limiting compensation for non-economic damages. Opponents of tort reform criticise this as disguised corporate welfare. However, advocates argue that trial attorneys too often receive an overly large percentage of punitive damages, and that the current system is too expensive, with meritless lawsuits clogging up the courts.
Some proposals focus on modifying the doctrine of comparative negligence, which allows a plaintiff to seek damages even if they are found to be more at fault than the respondent. Many common law jurisdictions have adopted a "modified" doctrine, where a party may only recover damages if it bears less than half the liability, or the other party bears more than half. A more radical approach, used in some American states, is contributory negligence, which precludes a party who is even partly at fault from recovering damages.
Other proposals include the abolition of the collateral source rule, which prevents the respondent from using the fact that a plaintiff has already been compensated as evidence. Opponents of tort reform argue that advocates have misstated the existence of any real issue and that the costs of the tort system are exaggerated. They point to evidence that the quality, variety, and safety of products in the United States have improved due to the tort system.
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Adopting the English rule
The English rule has its advantages and disadvantages. On the one hand, it can act as a deterrent for frivolous lawsuits, as the potential cost of losing becomes much higher. This could help reduce court congestion and free up resources for more legitimate claims. Additionally, the English rule may provide better access to justice for those who may struggle to afford legal fees, as they would have their fees covered if they win.
On the other hand, critics argue that the English rule may discourage legitimate claims, as the potential costs of losing could be too high for some plaintiffs, especially those of modest means. This could result in a decrease in access to justice for those who are already disadvantaged. Furthermore, there is a risk that defendants could use the threat of high legal fees as a bargaining chip, pressuring plaintiffs to settle or drop their claims.
To mitigate these potential issues, some jurisdictions in the United States that have adopted the English rule also include a "loser pays" provision, which allows the court to decide whether the losing party should pay the winner's legal fees. This provision gives the court discretion to ensure that the rule is applied fairly and proportionately.
Overall, adopting the English rule could help improve the efficiency of the American tort law system by reducing frivolous lawsuits and improving access to justice for those who may otherwise struggle to afford it. However, careful implementation and consideration of potential drawbacks are necessary to ensure that access to justice is not inadvertently restricted.
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Reducing ability to bring litigation
Reducing the ability to bring litigation is a key aspect of tort reform. This involves changes to the civil justice system, particularly in common law countries, with the aim of reducing the ability of plaintiffs to bring tort litigation or lowering the damages they can claim. This is justified on several grounds:
Firstly, litigation is seen as an inefficient means to compensate plaintiffs, with other methods potentially being more effective and quicker. Secondly, there is criticism that tort law allows frivolous or undesirable litigation to crowd the court system, delaying other cases and increasing legal costs. Thirdly, there is a concern that the fear of litigation discourages innovation, increases insurance premiums, and raises the cost of consumer goods and legal services.
To address these issues, tort reform seeks to implement measures that make it more difficult for plaintiffs to initiate legal action. This includes pre-trial mechanisms that assess the worthiness of complaints, such as medical review panels, and stricter requirements for filing lawsuits, such as pre-filing notifications and affidavits of merit. These measures aim to weed out non-meritorious claims and reduce the burden on the court system.
In addition, tort reform may involve limiting the damages that plaintiffs can receive. This includes restricting punitive damages, which are intended to punish the defendant rather than compensate the plaintiff, and implementing the English rule, where the losing party pays the legal costs of the winning party. Such measures are intended to reduce the financial burden on defendants and discourage marginal or tactical litigation.
However, opponents of tort reform argue that summary judgment is sufficient to address frivolous lawsuits and that changes to the law may not necessarily reduce the cost or complexity of litigation. Additionally, while tort reform seeks to reduce litigation, it is important to balance this with the primary aims of tort law, which are to provide relief to injured parties, impose liability on those responsible, and deter harmful acts.
Overall, reducing the ability to bring litigation through tort reform is a complex issue that requires careful consideration to ensure that the rights of plaintiffs to seek redress are balanced with the need for an efficient and accessible legal system.
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Frequently asked questions
American tort law has been criticised for allowing litigation to crowd the court system, with some lawsuits being deemed frivolous or undesirable. The fear of litigation can also increase costs for businesses and potentially stifle innovation.
Tort reform seeks to reduce the ability of plaintiffs to bring litigation, particularly in cases of negligence, and to limit the damages they can receive. This can be achieved through stricter pre-trial measures, such as medical review panels, and by implementing the English rule, where the losing party pays the legal costs of the winning party.
Maryland's tort reforms have improved the liability climate by discouraging non-meritorious claims and stabilising the state's medical malpractice insurance market. The Private Securities Litigation Reform Act of 1995 also successfully limited abusive securities lawsuits.
Opponents of tort reform argue that summary judgment is adequate to address frivolous lawsuits. In some states, such as Illinois and Ohio, tort reform laws have been struck down for being unconstitutional. Plaintiffs' attorneys may also use artful pleading to circumvent pre-trial measures and challenge the constitutionality of new laws.
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