Tort reform is a term used by supporters of a controversial idea that the American court system has too many frivolous civil suits. In a frivolous lawsuit, either there is no link between the conduct of the defendant and the injuries sustained by the plaintiff or the damages awarded to the injured plaintiff are perceived to be too high for the injuries sustained.
Most reforms are aimed at placing caps on actual and non-economic damages (including punitive damages), enacting restrictions on the lawsuits filed, and otherwise limiting the consumers' compensation in the courts.
Advocates claim that by limiting the amounts plaintiffs can receive, costs of doing business can be significantly decreased, especially in the case of medical malpractice insurance. In this particular argument, medical costs would decrease, making it more affordable for everyone. A January 2004 study by the non-partisan U.S. Congressional Budget Office found that, “Malpractice costs account for less than 2 percent of health care spending" Whether that portion might be reduced by proposed tort reforms and, if so, by how much, is a difficult question to answer.
Critics of tort reform efforts claim that the real intent is to shield businesses, especially corporations, from having to pay just damages for legitimate claims, while sacrificing consumers' rights. They argue that most corporations engage in a cost-benefit analysis before considering whether to stop a wrongful action (i.e. polluting or not enacting proper safety measures) and thus unless a lawsuit results in a large punitive judgement, the coporations may simply view the cost benefit of correcting a wrongful action as outwaying the cost benefit of correcting it and choose to do nothing. Such a lawsuit would thus have no real effect in correcting the wrongdoing and would essentially allow the corporation to continue to endanger customers or the general public, unless state or federal regulators interceded.
Tort reform has become a major rift between the Republicans and Democrats. Most notably, in the 2004 presidential election, Democratic vice presidential nominee John Edwards, a successful plaintiff's lawyer, was criticized by tort reform advocates. Republicans traditionally voice support for states' rights and say they oppose an excessive role for the federal government. Many of them, however, support federal "tort reform" legislation that would override state decisions.
The proposals advanced as "tort reform" generally do not address the issues of frivolous suits brought by businesses against competitors or against government regulation, nor do they include frivolous defenses raised in consumer actions.
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