The Thorny Thicket of Tort Reform

Limiting liability and cutting costs is good for everybody—except you and me

If you or a loved one is injured by a drunk doctor, a negligent hospital, or a dangerous consumer product, do you want the Legislature to put limits on your ability to collect compensation?

On the other hand, if you are a good doctor, an excellent hospital, or a careful company, do you want some lawyer to come after you because you have deep pockets and he has a client that wants someone to pay for their negligence?

That's the thorny thicket that is tort reform, legislation that is likely to pass in some form during this legislative session.

I have heard from doctors that their malpractice insurance premiums are outrageous. The last time I looked at insurance company research, no county on either side of the Tennessee River in West Tennessee has an obstetrician that will deliver babies. That's also true of most rural counties around the state. But the possibility of a difficult birth outside a modern hospital makes rural deliveries a form of Russian roulette. (Others argue that the figures on malpractice do not justify sky-high rates and suspect the insurance companies of just socking it to the doctors because of losses in the stock market.)

It is possible for a baby to be injured at birth through no fault of the doctor or the hospital. But a sympathetic jury often wants somebody to pay damages to care for the child. The hospital's insurance company is usually a likely target.

There is an argument to be made that trial lawyers keep American business honest. When a company engages in price fixing or has a defective product, it is the big law firms that spend years pursuing claims, usually to a big settlement. But the lawyers get a big fee and consumers usually get a coupon or the actual damages get contributed to charity when the identity of "wronged" consumers can't be determined. I used to get a check for 20 cents every time some lawyer in California sued my credit card company. The lawyers got multi-million dollar fees. But in theory, the lawsuit made my credit card company stop doing something they were doing to wrong consumers.

Lawsuits for environmental damage usually result in damages being awarded to charities unless there is a specific property owner damaged—like residents along the Pigeon River damaged by a North Carolina paper mill or, possibly, Roane County residents damaged by TVA's ash spill.

The biggest problem we have is the adversarial nature of our legal system. When a lawyer sues a doctor or a hospital, everyone goes into lockdown. It is a matter of months or years until the records, depositions, and testimony are completed. Because the lawyer has invested an inordinate amount of time in the case, he pursues it to maximum advantage. The hospital or doctor, or their insurance company, are distracted and they spend money on, you guessed it, lawyers.

If there were a quick way to ascertain the facts, cases could usually be settled quickly, which would be better for everybody involved. Cheaper, too. As a lawyer explained it to me, no lawyer wants to take on a case that is a loser or spend months on a fruitless lawsuit. Mediation could quickly determine it there is fault; if so, the insurance company could settle quickly, for a smaller amount. If there is no wrongdoing the lawyer would drop a bad case and move on. How you write a tort reform law that promotes that sort of thing is beyond me, but I'm sure some lawyers and legislators and hospitals would have some ideas.

There is no doubt that lawsuits, fear of lawsuits, and higher insurance premiums drive up the cost of health care. Does anyone doubt that there are a lot of tests and procedures done in self-defense by doctors and hospitals? But on the other hand, if that one MRI out of a hundred finds a tumor in your chest, do you still think it was unnecessary and useless?

I suspect we would like to see tort reform for everybody—except you and me.