Real Tort Reform
I mentioned briefly my own proposal for tort reform in my last post. Cyrus Dugger from tortdeform.com encouraged me to describe my proposal in more detail, after I mentioned I was thinking about doing so. So here we go …
It’s a simple proposal – eliminate pain and suffering damages for cases of ordinary negligence. Pain and suffering damages are sometimes referred to as “non-economic” damages. This contrasts with lost wages, medical bills, and other easily measured damages. It is also the area of damages targeted by most proponents of any kind of tort reform.
Most personal injury cases involve ordinary negligence and the damages are primarily pain and suffering. I would say this is well over 90%, and probably over 95%. In other words, this proposed reform would eliminate 90-95% of the cases. The remaining cases would involve either economic damages or a higher level of misconduct, such as gross negligence, recklessness, and intentional torts. As a note here, at least one Supreme Court decision I read suggests that “gross negligence” and recklessness are the same thing. And a dictionary definition of the former suggests so as well.
I have an underlying reason why I think this is appropriate. The ordinary negligence standard is simply too low. Consider some examples of ordinary negligence – going 1 mph over the speed limit; not coming to a complete stop at a stop sign; failing to completely clear your driveway after a winter storm – all of these are ordinary negligence. We all do these things. The vast majority of us are guilty of ordinary negligence on a daily basis, if not multiple times a day, or in the case of many drivers, pretty much all the time.
The distinction between defendants and the rest of us is a simple one – bad luck. It just so happened that the plaintiff happened to be in the wrong place when the defendant was committing a regular act of ordinary negligence. In my opinion, it’s not fair to hold the unlucky defendant responsible for the pain and suffering of the plaintiff when the defendant was doing the same things the rest of us do all the time.
A recklessness or gross negligence standard would set the bar much higher. My favorite way of comparing is this. Ordinary negligence is driving 1 mph over the limit. For gross negligence, it would have to be at least 30 mph over the limit, for a jury to even be allowed to consider it. Maybe 55 in a 30 mph school zone when kids are present would be enough, but there you’re adding facts to the situation. I can think of examples in medical malpractice. I watched a case where a guy kept coming into the ER with asthma attacks. They kept giving him steroids, and referring him to a pulmonologist. He didn’t follow the referral, and kept coming back. Due to excessive steroid use, he suffered avascular necrosis (bone death) in his hips and needed bilateral hip replacements. He sued the ER and the ER doctors, and pretty much everyone else. The jury eventually said no, but not until after several doctors spent a couple of weeks in a courtroom when they could have been treating patients. That case would have been dismissed on the standard I propose, but then again, the attorney would never have brought it.
By contrast, I remember one case from a couple of years ago where a hospital anesthesiologist failed to notice the patient had stopped breathing — not at gross negligence yet. Then, when a nurse noticed and tried to perform CPR, the anesthesiologist stopped her from doing so. Now that’s gross negligence. Another good example would be operating while intoxicated (i.e. BAC significantly over .10). Or the Ob/Gyn who had a sexual relationship with his mentally disabled patient. That’s more than just an oops.
Some will say my position is not fair to the plaintiffs. Get over it. Life isn’t fair. The current system isn’t fair either. Get hit by a car and you get pain and suffering damages. Get hit by lightning and you get nothing. How is that fair? I had a client who got run off the road by another car, but there was no contact between the two vehicles, and the other vehicle disappeared. Due to an obscure no-contact rule of uninsured motorist coverage, she was unable to get any compensation despite a severe wrist injury.
The benefits of this reform are substantial. Insurance premiums would drop dramatically. The liability portion of your car insurance bill would be cut by 90%, and your overall premium (including collision and comprehensive) would be cut by half or more. The No-Fault portion (for NY at least) would also drop because at least some plaintiffs continue treating to enhance their pending personal injury cases. Yes, I am cynical. There would be similar reductions in other insurance, including for homeowners and renters.
Med-mal premiums would drop, but maybe not as much. The big med-mal cases often involve the need for future treatment and/or lost income. If the plaintiff is expected to spend the next 40 years in a nursing home at $100K/year, that’s $4 million right there. Still, I think med-mal premiums would drop by roughly half. While you might like to see a better approach to this, I don’t think any of the current proposals for tort reform offer any solution to this, and there really isn’t one. If the person will spend the next 40 years in a nursing home, someone’s going to have to pay for that anyway.
The insurance savings would be a huge sum of money that could be directed to more productive areas of the economy, such as home improvement, consumer goods, starting new businesses, etc. This comes to an issue in economics — the personal injury system just redistributes wealth from one group (people who pay insurance) to others (plaintiffs and their lawyers, and insurance companies). The redistribution is highly inefficient, and it does not create anything of value. Some will disagree and say it creates justice, but I don’t agree with that argument when it comes to ordinary negligence. Nor does the system deter negligence in any significant way.
A pleasant side benefit of this reform would be a dramatic reduction in attorney advertising. The ads would become far less cost-effective. Also, our courts would be a bit less busy, and this would address a common concern about reducing the load for them. If we could get rid of the drug war while we’re at it, we’d really make a dent. But I digress.
Now I know many people out there are worried about the poor lawyers. Yes, I am being sarcastic – few worry about us. And we will get by without the huge fees we get from all these cases. That’s because the vast majority of lawyers don’t do personal injury law, and many that do have other areas of practice already. At least around here, the bulk of personal injury cases go to a few mills that have a few lawyers and a lot of staff. There’s a small army of defense lawyers out there too, but still really just a drop in the bucket. More important, most lawyers are pretty talented people. We’ll find other ways to make a living. Don’t forget that lots of people in the insurance industry would also lose their jobs. Again, these are talented people who will find other jobs, and these would generally be something productive for society.