Effect of Tort Reform on Personal Injury Cases

Tort reform refers to legislative changes (both laws that are proposed and laws that are passed) that would change the way personal injury cases work. "Tort" is just another legalese term for personal injury.

What is Tort Reform?

More specifically, tort reform typically involves placing caps on how much an injured person can receive after a successful lawsuit -- a limitation on the dollar figure known as damages.

In a typical personal injury claim, such as one stemming from medical malpractice, a plaintiff can receive damages that are intended to compensate for:

1. Medical treatment costs (economic damages)
2. Lost income/earnings (economic damages)
3. Pain and suffering (non-economic damages)
4. Emotional distress (non-economic damages)
5. Punitive damages (meant to punish a defendant for egregious or outrageous conduct)

Tort reform efforts usually try to limit non-economic damages, punitive damages or both.

Arguments for Tort Reform

Those who argue in favor of tort reform assert that caps on damages are essential for protecting many facets of society from the crushing costs of unreasonable jury verdicts. In medical malpractice cases, for example, tort reform is seen as one way of helping to keep down the skyrocketing costs of medical care.

In injury cases in general, there is a belief that juries may be overly sympathetic to injured victims, and will award damages that are out-of-bounds with what is appropriate. The risk of high, uncapped damage awards results in insurance being quite expensive. Returning to the medical malpractice example, doctors, hospitals and health care providers have to pay more money for malpractice insurance, so as a result, medical care costs more because this cost has to be borne by consumers. It is also argued that doctors sometimes make decisions based on the fear of a lawsuit, rather than solely on what they believe is best.

Arguments Against Tort Reform

Equally compelling are the arguments against tort reforms. Counterarguments assert that it is not fair to cap damages and prevent plaintiffs from getting full compensation for losses that were caused by someone else's negligence. Some argue that tort reform efforts are unconstitutional, and in fact some state constitutions do have prohibitions against these types of caps (Arkansas, Kentucky, and Pennsylvania are a few).

Finally, in the context of medical malpractice lawsuits, it has been asserted in some states -- like California -- that plaintiffs are having a hard time finding lawyers to take malpractice cases. California has a $250,000 cap on non-economic damages in medical malpractice cases, and attorneys are typically paid a percentage of damages as their only fee in these cases. Since malpractice is expensive to prove, this cap on damages acts as a potentially significant hindrance to lawyers taking on malpractice cases. When plaintiffs can't find lawyers, doctors don't get sued and there is even less accountability or incentive to refrain from negligence. So the argument goes.

What States Have Medical Malpractice Damage Caps?

While there are plenty of arguments on both sides, the fact is many states have instituted caps when it comes to damages in medical malpractice lawsuits. A table of the rules regarding damage caps is below but it is important to note two things: 1) most of these caps adjust annually for inflation so the ceiling may be different at the time of your reading and 2) laws in this area are evolving. The table, then, should be considered a guide but should not be used as your definitive answer on whether malpractice damages are capped in your state: