What Is Tort Reform?

Tort reform is any law passed that either changes tort law, or changes the process of seeking justice, but the majority of changes fall under four categories.

Non-economic Damage Caps

These caps limit the large amounts awarded if the damages do not affect economic status. Proponents state this will realign the damage awards with the actual cost of the damage, but opponents claim that it will discriminate against the poor, elderly, and children.

Punitive Damage Caps

These caps limit the amount of economic punishment the courts can order. Opponents state that that if corporations are not punished, then they have less incentive to correct defective products, while proponents counter that that argument implies that the companies have a malicious desire to harm their customers, and that companies will have an economic incentive to market defective products.

Product Liability Curbs

These caps will either impose requirements necessary prior to filing a suit, or will grant some companies immunity from lawsuits. A prime example of a product liability curb is the immunity offered to the manufacturers of vaccines by federal statute. Since the 1960s, no individual can sue a manufacturer of vaccines, he is required instead to enter arbitration to seek damages.

Contingency Fee Limits

Many cases are brought by attorneys who do not offer an up-front fee. When an award is finally obtained, the attorney usually receives one third of the settlement, and this applies whether the suit is actually heard by a jury or settled “out of court.” Proponents state that this would make it unprofitable for firms to file massively inflated claims and would reduce the number of frivolous suits filed, while opponents feel that this will also further exclude poor consumers from access to the legal system.

Tort reform is not new, but as the cost of the legal system rises, a look at how to curb those costs and how to protect consumers and manufacturers alike, as well as the economy as a whole will help to keep this important issue in the forefront of the news, Congress, and state legislatures for many years to come.

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