Tort Reform: How Reformers Try To Fix The Tort System

Sarah Edwards


Reviewed By Adam Ramirez, J.D.


Read in 4 mins

Tort law governs the principles and rules that determine when a party has a claim for losses caused by another party’s actions. Torts include personal injury law, defamation law, and other legal fields that govern wrongs committed by one party against another.

Some believe tort laws go too far, particularly businesses, doctors, and insurers. According to them, the fear of lawsuits, costly personal injury settlements, and big damage awards stifle business activity. They believe that tort reform is necessary to reign in runaway juries that give away generous damage awards to undeserving victims.

On the other hand, victims and personal injury lawyers believe that the only way to ensure safety for ordinary people is with huge damage awards. They argue that multi-billion dollar corporations view injury and death as a cost of doing business. Thus, tort reform will only free companies, doctors, and insurers to act more recklessly.

What Is Tort Reform?

There is no easy way to resolve this conflict. On the one hand, tort laws have continuously grown and developed for centuries, and tort reform may represent the latest evolution.

On the other hand, tort laws are designed specifically to compensate injured victims and deter negligent or wrongful conduct. If the pendulum swings too far, both of these goals are lost.

A common tort reform definition is a change in laws and court rules to reduce the number of personal injury lawsuits as well as the costs of defending them. While most of these “reforms” benefit those accused of injuring others, victims may also benefit from faster settlements and more certainty in the amount they recover.

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Tort Reform Examples

Tort reformers have several tools for implementing their goals. Some examples that have been tested include the following:

No-Fault Auto Insurance

Most states have a tort-based auto insurance system. This is the system you probably think of when you get into a car accident. Anyone injured in a traffic crash pursues an injury claim against the at-fault driver. The at-fault driver and their liability insurer settle the accident claim or litigate against the victim.

A small number of states use a no-fault insurance system. Under this system, auto owners buy personal injury protection (PIP) coverage with their auto insurance.

After a crash, injured people might need to first seek injury compensation from their insurer. The insurer pays certain expenses regardless of fault. In other words, these benefits are available to the driver who caused the crash and innocent victims.

No-fault insurance was one of the earliest and most successful attempts at tort reform. States that implement this system believe it provides the following benefits:

  • Fewer car accident lawsuits
  • Faster injury settlements for minor injuries

On the other hand, accident victims lose two rights. First, they cannot file a lawsuit unless they meet the state’s qualifications. In many states, this means they must have suffered a “serious injury.”

Second, they cannot get pain and suffering settlements through their PIP coverage. They can only seek compensation for these losses if they meet the state’s qualifications to file a lawsuit.

Another drawback is that some states have seen an increase in fraudulent claims. Since claimants do not need to prove who caused the crash, they can stage crashes to receive medical and disability benefits.

Shortened Statutes of Limitations

Another type of reform measure shortens the time to file lawsuits. This option requires injured people to start injury claims as quickly as possible. If someone fails to meet the deadline without a legally recognized excuse, the court must dismiss their lawsuit without ever looking at its merits.

Shortened statutes of limitations have one benefit to victims. Shorter filing deadlines mean fresher evidence. Memories have not faded, and documents and objects are better preserved.

However, this approach imposes enormous burdens on victims. Most people do not know the statute of limitations in their states. They can get caught by surprise when they find out they waited too long to file. Additionally, many accident victims must focus on their health before thinking about insurance claims and lawsuits.

Caps on Medical Malpractice Damages

One reform measure focuses specifically on high medical malpractice payouts. Doctors face high insurance rates to practice in many cities. As a result, doctors have relocated from these cities to places where they can afford their insurance. By capping damages, malpractice insurers can reduce premiums because their financial exposure drops.

However, this approach has a few drawbacks. First, even after states cap damages, there is no guarantee that malpractice insurers will drop premiums. Even if they lower premiums, doctors will not necessarily remain in the state for a small price reduction.

Second, some patients need significant compensation for their injuries. Arbitrarily capping damages is unfair to people who have suffered permanent brain damage, paralysis, or other catastrophic injuries.

Learn More About Torts From ConsumerShield

States vary in their attempts to reform their tort systems. This has produced a confusing patchwork of insurance systems, damages caps, and statutes of limitations. ConsumerShield is dedicated to educating people about the law and connecting them with lawyers who can help them. Contact us for a free case review.

Frequently Asked Questions

  • Tort reformers seek to change the rules and laws surrounding personal injury lawsuits. One goal is to reduce the cost of these suits on businesses. Another goal is to relieve courts clogged with injury cases and provide faster and more certain personal injury settlements.

  • Tort reform in healthcare is meant to address a perceived “brain drain” caused by high medical malpractice premiums. The most common reforms to address this issue are shortened statutes of limitations for medical malpractice claims and caps on malpractice damages. However, these reforms place a high burden on injured patients.

  • The most successful example of tort reform is no-fault auto insurance. Several states, including New York and Florida, have successfully implemented this system to reduce injury lawsuits and accelerate car accident settlements.

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