Whether to Reform Tort Law: A Legal Analysis

Whether to Reform Tort Law: A Legal Analysis


                                                                                                                                                             Whether to Reform Tort Law: A Legal Analysis

Tort reform. Both words would seem to require some definition for all but those steeped in the movement to achieve tort reform and those fervently fighting to preserve the status quo.

So what is a “tort?” The word itself derives from the 11th-century Latin word tortum, meaning injustice, tortum springing from the Latin word tortus, meaning twisted. Tortus comes from the Latin word torquere, meaning to turn awry or wring. In American legal parlance, tort means “a wrongful act or an infringement of a right leading to civil legal liability.” Modernly, tort law is thought of as “personal injury” law.[i] Tort law has been a part of the American legal fabric since the United States’ establishment, having been adopted as a part of the British common-law system.

And so – in the legal and political senses – what does “reform” mean? When legislative bodies want to enact legislation altering a legal construct like tort law, they quite often title the bill that way, e.g. (here, hypothetically), the “Tort Reform Act of 2017.” The fact of the word “reform” being in the title of the bill allows it proponents the opportunity to presume that reform is needed or necessary. Its opponents, , would argue that the use of the term is clearly presumptuous as, in their view, the construct needs no reformation at all (or perhaps only the slightest amount); in fact, many of them call this movement “tort deform” instead.

The tort-reform movement has been in existence for many years. Its development comes from industries that are on the receiving end of tort suits, e.g., medical malpractice lawsuits, and the insurance industry, which pays the vast majority of the costs when a personal injury results in liability and judgment. Personal injury lawsuits, as with virtually all civil lawsuits, have two principal components: liability and damages. First, liability must be shown; that is, that a duty existed and that the duty was breached, meaning the duty of one person not to physically harm another person accompanied by actual injury. Second, to recover damages, it is not enough that liability be shown; there also must be compensable damages suffered by the injured party. A simple example would be where party A’s automobile collides with the automobile of party B. Party A had a duty not to unreasonably strike Party B who was acting reasonably (liability). The collision resulted in Party B suffering damages to his automobile and a broken arm. Party A must compensate Party B for the property damages and the medical bills for the broken arm (damages).

There are many types of personal injuries, of course, from the common one just described to such as the highly complex and long-running mass-tort litigation relating to asbestos. In the 1920s, medical science began to conclude that working around asbestos could lead to asbestosis, mesothelioma, and other forms of cancer. Lawsuits from workers afflicted with asbestos-related diseases were filed, culminating in thousands of such cases coming to be associated with the multi-district litigation that has been headquartered in a Pennsylvania federal district court for decades now and which is still ongoing. Damage awards, settlements, and funds set aside by corporations and insurance companies for asbestos victims have amounted to multiple billions of dollars.

The vast majority of routine tort claims are not frivolous and do not result in mega-verdicts by juries, but tort-reform proponents – mostly the largest corporations in general, those who support them, e.g., chamber of commerce-type organizations, politically conservative individuals, and Republican-controlled legislatures – believe there is a long-running problem with tort claims. These perceived problems take on a variety of forms. First, there are those who believe that certain types of tort lawsuits ought not be allowed to even be filed or at least should have serious restrictions, an example being restrictions placed on the filing and conduct of medical malpractice suits by some state legislatures.[ii] Mostly, however, it is not the number of lawsuits filedor even rulings declaring liability that prompt calls for reform from tort-reform proponents. Rather, it is the amount of damages that  are awarded by judges and juries where there are no legislatively-imposed limitations.

In other words, tort reform is about money. In the view of tort-reform proponents, the filing of “frivolous” tort claims and “excessive” jury awards adversely harm business interests and the economy by causing fewer business start-ups and by causing business failures, thus depriving the economy of new and existing jobs. Tort-reform proponents argue that these lawsuits drive up the cost of insurance premiums and other costs for businesses and professionals having to defend themselves against “unwarranted” claims resulting in “huge” damage awards. As a result, would be entrepreneurs and business owners become hesitant to establish businesses and potentially expose themselves to tort liability.

In 2014, Republicans gained control of the U.S. Senate. With the election of Donald Trump as President in 2016,  a Republican President is in the White House. And while there has been much talk in Congress of tort reform, so far it has been only talk as no tort-reform measure has been enacted.

That is decidedly not the case in  state legislatures, however. Most of the states passed some form of tort-reform legislation in the 1980s. The clamor continues to end frivolous tort lawsuits by capping certain forms of damages and by other measures.

Opponents of tort reform, on the other hand, argue that there is no reliable empirical evidence that the tort “reforms” that have been enacted over the last several decades have achieved any laudable purpose, such as creating and retaining jobs or significantly reducing costs. The opponents argue that the tort reforms efforts has  allowed large companies to reap huge profits on the backs of injured persons. For example, opponents argue that corporations are not devoting as many resources to safety and injury prevention because under tort reform it is cheaper for corporations to be less cognizant of safety and simply pay the capped jury awards that come along once in a while. The arguments on both sides are meritorious. For tort reform advocates, there have been abuses of the system, both in the context of the filing of marginal, and even frivolous, cases and in the context of jury awards approved by judges that clearly were grossly excessive in the circumstances (most of the time, such awards are overturned or significantly reduced by appellate courts). There have been clear examples of abuses by corporations in the context of knowingly committing torts. A third front has emerged, suggesting that while some tort reform may be a good thing, the present reform ideas are ill-conceived and that reasonable compromise would be a much better idea.

By no means is the battle over. As Republicans gain control of more state legislatures, more tort reform legislation is proposed. The current situation in Arkansas is an instructive example. In 2017, the Arkansas General Assembly placed a proposed constitutional amendment on the next general election ballot that will limit the contingency fees[iii] that lawyers can charge their clients in tort cases and place hard caps on both punitive[iv] and non-economic[v] damages.

Max Brantly recently wrote in the Arkansas Times: “The trial lawyers [and Democrats] will spend plenty [in an attempt] to stop what amounts to stripping the Arkansas Constitution of the right to a jury trial for damages. But perverse Arkansas – though no home to runaway juries or financially-strained nursing-home owners or doctors – is inclined to buy propositions that the chamber of commerce declares good for business. If being hospitable to business and inhospitable to workers was a ticket to economic glory land, Arkansas would be Silicon Valley, the Research Triangle, and the Johnson Space Center rolled into one.”[vi]

The arguments rage on. To tort-reform proponents, it is an economic and fairness argument. To tort-reform opponents, it is a human and fairness argument, meaning why should a legislature pre-impose arbitrary and subjective limitations on damages suffered by particular individuals it knows nothing about? Due to the inherent complexities of this argument, it will not be settled any time soon.


Footnotes:


[i] While tort law can involve an injury to business rather than person, this article will involve tort law only as it relates to personal injury. The terms “tort” and “personal injury” are used interchangeably in this article.

[ii] In Texas, there are many legislatively-imposed restrictions on medical malpractice actions. 

[iii] Contingency fees constitute a percentage of the recovery in behalf of a client being paid to the lawyer, often 40% or more. While many criticize the contingency-fee system, the simple truth is that, but for such a system, most individuals would be financially unable even to file, much less prosecute, a tort claim.

[iv] Punitive damages are a highly controversial form of damages. It is these damages that tort-reform proponents dislike the most because they are not directly connected to any damages suffered by a tort victim; rather, they are meant to punish the entity committing the tort for its conduct and offer an incentive not to engage in such behavior again. That these damages are awarded to the tort victim seems wrong to tort-reform proponents. Generally, they are awarded only in the most egregious of cases.

[v] Damages such as pain and suffering.

[vi] Max Brantley, “You Want Tort Reform? Try This.,” Arkansas Times, https://www.arktimes.com/arkansas/you-want-tort-reform-try-this/Content?oid=6824189.