Tort Reform, Lawsuit Caps, and Loser Pays Provisions: A Plaintiff’s Lawyer’s Perspective

The phrase “tort reform” has become a popular buzz phrase in this Country.  Fueled by the powerful insurance lobbies and sensationalized reporting of random large verdicts, public sentiment is that frivolous lawsuits abound and the legal system is out of control.  As personal injury trial lawyers, we see an inexplicable phenomenon regularly: clients believe the only case that has merit is their own.  At trial, anti-lawsuit juror bias creates an additional hurdle to overcome, effectively changing the burden of proof in a civil case to require that mere proof of negligent wrongdoing is not sufficient – a defendant will often not be held accountable unless the defendant’s fault consisted of gross negligence,  recklessness or even intentional conduct.

Tort reformers have successfully passed legislation imposing “caps” on various types of damages, such as non-economic damages in medical malpractice actions.   In Missouri, the Missouri Supreme Court has held that the medical malpractice caps of $350,000 imposed by the 2005 tort reform legislation on injury claims are unconstitutional. However, in a case rendered several months before the landmark decision of Watts v. Lester E. Cox Medical Centers, the Missouri Supreme Court had upheld as constitutional the old cap of $632,603.82 per defendant on medical malpractice cases where the injury was wrongful death. To be determined is whether the 2005 cap of $350,000 total is constitutional in the context of wrongful death medical malpractice suits. Thus, the status of caps in wrongful death medical malpractice lawsuits in Missouri is uncertain.

Yet, the reality is that most medical malpractice claims never make it as far a filing a lawsuit, much less seeing the inside of a courtroom.  In most jurisdictions, including Missouri and Illinois, before a medical malpractice lawsuit can even be filed, a medical expert, generally a practicing medical doctor, must affirm in writing that the case has merit.  Making that determination requires the expert to review the medical records, sometimes thousands of pages, which takes time away from the doctor’s practice, and therefore costs money.  By the time most medical malpractice cases have even been filed as a lawsuit, the plaintiff’s attorneys will generally have invested $2,000 – $5,000 in medical expert costs.

Filing of the lawsuit is just the beginning.  By the time the malpractice case reaches trial, most cases typically cost $20,000 – $50,000 in litigation costs alone.  For this reason, many law firms have a policy not to accept any medical malpractice case unless the special damages (lost wages, medical bills or cost of future related medical care) exceeds at least $100,000.  Victims of legitimate malpractice who were too old, indigent or who will not have on-going medical care expenses most likely will not be able to find an attorney who can afford to front the large sums of money necessary to collect fair compensation for their injuries.

According to a Harvard Medical Practice Study, only one out of eight average negligent medical injuries ever result in a medical malpractice lawsuit being filed. In addition, studies have found that medical malpractice caps on damage awards have had very little impact on either the cost of malpractice insurance premiums to the doctors or the cost of medical care to the public.  Instead, the large malpractice premiums were imposed against doctors in large part to offset against premium investment losses and the economic downturn in general.  Yet, trial lawyers made a very convenient target to deflect the public’s attention away from the insurance companies’ unconscionable behavior.  In Texas, for instance, “tort reform” saved insurance companies millions of dollars in payouts, with some estimates finding that medical malpractice claims decreased by 75%.  Yet, the savings were not similarly passed on to the doctors’ by decreasing their malpractice premiums by 75%.

The Missouri Legislature regularly considers loser pays provisions in attempting to pass additional tort reform law. Should such legislation pass, the loser in the lawsuit would be required to pay the attorneys’ fees and costs of the prevailing party.  Such provisions limit access to the court system to only the wealthiest individuals and corporate defendants who can afford to bear the risk of paying both sides’ legal fees and costs.  Deterrence of negligence, corporate accountability and placing financial obligation at the feet of the party responsible for causing harm will no longer be the cornerstones of our tort system. Clearly, further tort reforms in this Country should not be allowed to benefit only insurance companies at the expense of obliterating victims’ rights.  Responsible un-biased reporting, documented studies, participation by all sides of the equation and careful consideration should be undertaken before any meaningful “reform” of the legal system can ever be achieved.

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