Tort Reform in the Us Essay Example

tort reform is to avoid the frequent meaningless lawsuits that the United States courts have to hear each year.According to the Bureau of Justice Statistics (BJS), in 1985 there were 166,430 tort cases filled across 15 states. By 1996 this figure had risen 32% to an all time high of 243,574 cases filled. In the following years after 1996 the number of cases did begin to fall, however, in recent years this has seen a turn around once again, and in 2003 there were a total of 198,377 cases filled (BJS, 2005).

The main argument against the current tort system is not so much to do with the number of cases that a court hears, but more to do with the expenses hat arise from these cases. It was estimated that a total of $886 dollars would be passed along to each American when the tort system (after litigation awards and settlements) reached at total of $260 billion in 2004 (Larimer, 2006). According to the same study, tort costs grew by 5. 9% in 2004 and were predicted to grow by a further 6.5% in the subsequent years. The reasons these costs are passed to the average consumer is through the increase in insurance rates and product prices caused by the firms having to pay out awards for tort cases.A defining case showing the need for tort reform is that of Liebeck v. McDonalds.

In this case Ms. Liebeck, a 79 year old woman from New Mexico, ordered a cup of coffee from a McDonalds drive thru, and when adding cream and sugar, spilt that coffee on her, thus receiving 3rd degree burns from the hot coffee.

Ms. Liebeck spent eight days in the hospital for treatment totaling around $10,000 in fees. She sued the fast food chain, and was awarded by a jury $2. 86 million dollars in damages (the trial judge reduced this to $640,000) (Liebeck v.McDonald's Restaurants). This case became a popular example of frivolous litigation, a lawsuit where the damages are deemed to greatly exceed that of the circumstances of the case (Wikipedia, 2008). It is cases such as this one that has caused a movement and outcry for tort reform, as it is seen that cases like these are becoming a drain on the economy, and to eliminate them would have numerous benefits to society as a whole.

As aforementioned the severe costs of the American tort system have and are becoming more of a burden on the economy.The effects do not only affect American families, but also businesses as they have to pay higher insurance costs. Excessive litigation also hurts the economy by slowing down productivity and growth due to the lack of risk-taking which consequently slows down the introduction of new technologies.

Trying to tackle this problem is University of Virginia law professor Jeffrey O'Connell and Michael Horowitz of the Hudson Institute, who together have accumulated a number of tort reform ideas that potentially eliminate the absurd incentives of tort law and result in cast economic savings.The pair had three reform ideas. First is the “auto-choice” reform which is designed to make $40 million in savings available on auto insurance premiums. The desired result from this reform would translate in a saving on a typical insurance premium of an average of $221. The second (co-authored by Professor

Lester Brickman of the Cardozo Law School) is the contingency fee reform.

It is designed to appreciably lower attorney fees by $45 billion a year. It would do this by paying the plaintiff’s attorney the amount that they add to the client’s settlement.This is a sort of incentive plan that would give greater reason for the attorney to help their client. The Moore-Gephardt reform is the final proposal which would provide savings in regards to health care costs. By eliminating the collateral source rule and reducing excessive claims of medical damage, significant amounts of money could be saved.

In addition to this the Moore-Gephardt reform would decrease the occurrence and size of "pain and suffering" damage awards (Saxton, 1996). Tort reform has long been an issue in the United States. However, George W.Bush could be said to be responsible for the most recent surge in, what is know as, “Common Sense” tort reform. President Bush made tort reform a major issue in his platform when running for governor, and in his second term highlighted the notion on the national stage. While seeing much success with tort reform from the states, there have been difficulties at the federal level.

In 1994 the Republican Party had control of both houses of congress, and during this time they tried to pass a collection of bills known as the “Common Sense reform bills”. The reforms that the bills purposed fell into two categories.Firstly, many of the bills contained provisions that were intended to limit or abolish the liability of defendants in certain cases. Examples of such liability are that a plaintiff would have to actual malice to recover damages, that there would

be a cap on damages reward, and that joint and several liability would be done away with.

The second of the categories are that all the bills are designed to deter frivolous litigation (as mentioned in paragraph four), and some bills allowed for sanctions to be placed on plaintiffs that filled such lawsuits (Harvard Law Review, 2008).