Tort Reform: Myths and Realities

Some persistent myths seem to surround the tort reform discussion—even in media reporting—while other items are often offered as facts while they’re closer to either assumptions or just simply guesses. Here’s a look at some of the whoppers and some of the facts that refute them:

Myth: “If we have medical-malpractice caps, then general business caps are basically the same thing.”
Fact: We do have a $500,000 cap on medical-malpractice non-economic damages, imposed during the 2002 special session. But there is no casual relationship between general business “tort reform” and medical malpractice “tort reform,” and one doesn’t necessarily answer the other’s problems. Medical malpractice caps were implemented to combat rising medical malpractice rates and to deal with a perceived doctor shortage, while the argument for caps on general business liability is that a general “lawsuit culture” is hurting the perception that Mississippi is good for businesses. (Mississippi already caps punitive damages in general business cases.)

Myth: “Excessive lawsuits cost Americans $809 per year.”
Fact: This myth comes directly from an ad that the U.S. Chamber of Commerce directed at Mississippi voters. The $809-per-year figure represents an estimate of the entire cost of all tort payouts ($233 billion) divided by the number of Americans, based on a study by Tillinghast Towers Perrin, a consulting group for insurance and other Fortune 500 corporations. The study, which is done annually, is respected for its ability to estimate the size of awards, but has been criticized for hyperbolic statements such as this one (which the Chamber further mischaracterized). The overwhelming bulk of these are legitimate payouts that included both economic and non-economic damages.

Myth: “Without caps, we can’t do anything about ‘runaway juries.’”
Fact: In Mississippi, a jury verdict is first reviewed by the trial judge, if the defendant feels the jury acted with “bias or prejudice” or the damages were “against the overwhelming weight of the evidence.” If either party is unhappy with the trial judge’s opinion the matter is appealed to the Supreme Court, which usually refers it to the Mississippi Court of Appeals for review. The Appeals Court reviews the trial judge’s decision on an “abuse of discretion” standard. After the Appeals Court makes a finding, the Supreme Court can accept review of the claim. In a few cases from other states, punitive damages have been successfully appealed to the U.S. Supreme Court.

Myth: “There’s no reform without caps.”
Fact: There are some important civil justice reforms that Mississippi can take up, including venue shopping, joint-and-several liability, “joinder” and class-action issues, to limit the number of cases that a defendant has to defend at once, help avoid jurisdictions that appear to have a bias against a particular defendant and to protect defendants from paying restitution in cases where they were not primarily at fault. Other options can be explored to specifically address frivolous lawsuits and unethical attorneys.

Fact: “The perception of Mississippi as a ‘lawsuit hellhole’ keeps businesses from relocating here.
This one is true, at least anecdotally, and perhaps the only legitimate argument for caps is that it makes business costs “predictable” in a way that “competing” states, such as Texas, have tried. But this predictability comes at a high price—it limits people’s rights and restitution in legitimate cases of wrongdoing. And it’s worth noting that the “perception” comes partly from the millions of marketing and political dollars that have been spent to publicize Mississippi’s “jackpot justice” climate and to influence judicial and other political races.

Previous Comments

Thanks for this. I was actually thinking I needed a cheat sheet like this just yesterday.

#77703 | Author: kate | Date: May 26 2004