Tort Reform And Frivolous Lawsuits

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It is a simple truth: the justice system is wary of frivolous lawsuits. If a claim is almost entirely lacking in legal merit, the court could impose fines on the party that brought that claim. Veritably frivolous litigation is a detriment to all involved. In addition to hefty fines (as much as $25,000 in some jurisdictions), the claimant and their legal representative may be held in contempt of the court. Federal Rules of Civil Procedure require that an attorney investigates the factual basis of any claim with due diligence; if a claim is determined entirely frivolous, the attorney is at least partially at fault for having allowed it to progress to the litigation stage.

It may be argued that an attorney acted in good faith when taking on a case. Frivolous claims invariably waste time, money and legal resources; minimizing this kind of litigation, without infringing on plaintiffs’ ability to bring rightful claims forward, has been a high priority of legislators. One of the hallmark features of frivolous suits is a plaintiff who seeks enormous damages, especially in the absence of great loss or injury. The incidence of trumped up claims, without any justifiable cause, contribute to a skeptic slant in the evaluation of tort claims. As a result, genuine and meritorious claims suffer. Although certifiably present, frivolous suits are not nearly as pervasive as they are painted. Corporations generally disdain litigation and will highlight frivolous suits in their arguments for tort reform, despite this creating a distorted picture of the landscape of tort suits. Aggressive tort reform advocates and organizations invariably cite the nuisance and cost of frivolous litigation as a reason for stringent limitations and requirements within the tort system.

Damage Caps

A key component of tort reform efforts has been the implantation of damage caps, which limit the amount of money a plaintiff may recover in a tort suit should they win their case. Armed with evidence that plaintiffs have sought unjustifiably high damages and statistics showing the detriment of multimillion dollar malpractice damages, tort reformists have held fast to the alleged benefit of damage caps. While there is no limit to compensation for hard, economic damages like hospital expenses, which could theoretically reach any amount and cannot be subject to a predetermined cap, damage caps limit the amount of money a plaintiff may recover for noneconomic hardships and damages, such as disability, disfigurement, pain, paralysis, suffering, and loss of companionship. While limiting damages for more abstract losses, such as suffering and loss of companionship seems legally sensible – since pecuniary compensation could only go so far in ameliorating these damages – it is arguably unfair to limit the damages one may receive for paralysis, permanent disability or disfigurement and the like. Especially so when the reason for such a cap was rooted in fears of frivolous litigation, and such cases are clearly not frivolous. High payouts do strain the healthcare industry as a whole, but a single individual should not be deprived of rightful compensation under the law because of of economic and corporate interests. Such incidences that lead to severe disability and enormous payout are rare, as such. Noneconomic damage caps generally range between $250,000 and $750,000, with some states reaching $1 million.

Another argument for damage caps is that they decrease a tendency for physicians to practice defensive medicine, wherein excessive and costly measures are taken to ensure cause for liability is avoided at all costs (such as excessive testing/screening, to prove there was no negligence or deviation from the standard of care). However, data published by the Medical Liability Monitor showed that medical liability insurance rates had been declining for four years in states that had enacted tort reforms and states that had not. This led actuaries to deduce that patient safety and risk management campaigns across the board are a more effective means of deterring negligence, decreasing cause for claims, and in turn decreasing the incidence of defensive medicine. Although damage caps may aid in the reduction of liability premiums, which do impact healthcare accessibility, there is no concrete evidence to the notion that damage caps influence physician behavior for better or worse.

Damage caps hinge on the premise that every single lawsuit, no matter the circumstances, can be subject to a one-size-fits-all limit. By imposing them, legislators make the presumption that damages and injuries incurred by any given plaintiff do not exceed the limit, prior to any examination of their claim. Individual states have tackled this problem by having extended caps in cases of particular injuries, such as quadriplegia, loss of a limb or brain injury. Michigan utilizes this approach, employing a noneconomic damage cap of $280,000, which is extended to $500,000 for injuries like those discussed. Granted, it may be argued that a cap already sits at the apex of what the most injured individual ought to receive, and anyone with lesser injuries will be awarded amounts significantly lower, negating the need for cap extensions. Still, the law presumes the gravity of an injury before even hearing a case, and that is perhaps the chief flaw of damage caps. Five states employ ultra-stringent “umbrella caps,” which limit the collective amount of economic and noneconomic damages. Indiana’s is the lowest umbrella cap in the country at $250,000, while Nebraska’s is the highest at $2.5 million.

If damage caps unfairly create a one-size-fits-all scenario, at least it is done on a state-by-state basis, still allowing for variation of said “sizes.” However, former President George W. Bush proposed a nationwide damage cap of $250,000. This was not passed.

Tort reformists often paint the prospective plaintiff as a minimally harmed party with large dollar signs in their eyes, motivated by the prospect of recovering substantial damages, as opposed to exacting justice. This is a misconception. Stella Liebeck, the poster child of frivolous litigation, brought the infamous “hot coffee” suit against McDonald’s in 1994. She was painted in the media as an opportunist using the court system to become rich. Speaking of the erroneous nature of this portrayal, Liebeck suffered third-degree burns to her legs and genitals, requiring skin grafts. She merely requested that McDonald’s cover her medical expenses and no more. They offered to cover 4% of her medical expenses or $800 of $20,000. Noting that McDonald’s had ignored 700 complaints about the temperature of their coffee, she filed suit for tortious negligence. She won, but the suit was still viewed as opportunistic and frivolous in the public eye. Most are not privy to the specifics of the claim, or its real merit. In spite of this merit, Liebeck’s case led to a push for tort reform. So-called frivolous litigation is not the mammoth problem it is painted by liability-loathing corporations. Limiting the amount of money a plaintiff may recover, on the grounds of deterring frivolous litigation, arguably impedes the goals of the justice system and infringes on a plaintiff’s rightful compensation.

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