Personal injury lawsuits, or tort cases, are often a political talking point. Unfortunately, the commonly-held beliefs about them are not only misleading, but entirely false. Many holding these misinformed convictions call for “tort reform,” or deform, as we see it. Today, let’s start with setting a few facts straight.
Myth: Plaintiffs are bringing frivolous cases
Truth: A study by Harvard University found that only 4% of patients harmed by a doctor’s negligence sue. Not only are injured patients not suing, those who do are found not to be bringing frivolous cases. Source: Medical injury, malpractice litigation, and patient compensation in New York. Cambridge: Harvard University Press.
Myth: Lawsuits are skyrocketing
Truth: The number of lawsuits is dropping. The number of federal tort cases in U.S. District Courts fell by 79% between 1985 and 2003. In the nation’s 75 largest counties, the number of tort trials dropped 50% between 1992 and 2005. In King County alone, not only has the number of jury trials decreased, but so have the jury trial awards. Source: Justice Department. Furthermore, According to the National Center for State Courts (NCSC), tort cases declined by 25 percent between 1999 and 2008. Source: National Center for State Courts
Myth: Tort cases are clogging up the courtrooms
Truth: The National Center for State Courts found that tort cases are only five percent of the civil caseload and are on the decline. Contract cases for corporations are ten times more numerous, accounting for 52% of the load. Source: National Center for State Courts
Myth: Lawyers and plaintiffs are receiving disproportionately high verdicts that outweigh the damages
Truth: Big business lobbyists and corporations try to make plaintiffs and lawyers look greedy and pretend they are exaggerating their injuries so they can secure multi-million dollar verdicts. Nothing could be further from the truth. The median award for a plaintiff who received monetary compensation in civil trials in 2005 was $28,000. In addition, punitive damages awarded in addition to compensatory or physical injuries only happen in five percent of cases. Remember the story of the cup of McDonald’s coffee? Ms. Liebeck, the plaintiff, was a passenger in a car parked outside of McDonald’s when her coffee spilled, giving her third degree burns that required 8 days in the hospital, painful skin grafts, and two years of treatment. McDonald’s was brewing coffee at 187 degrees, hot enough to inflict third degree burns, based on cost effectiveness – that is, consciously choosing to serve coffee that could hospitalize its customers. With the costs of her treatment, Ms. Liebeck asked for $20,000. The jury awarded $2M after McDonald’s refused to show up to three court-ordered mediation sessions, but the judge reduced the number to $600,000 and the parties later settled for less on appeal. McDonald’s became intent on blaming the victim for its poor litigation strategy and sold the case as the “$2 million cup of coffee,” when that was not the amount they paid, nor would they have had to pay more than for her health care if they had simply shown up.
Myth: Malpractice suits increase the cost of healthcare
Truth: Medical negligence compensation accounts for a grand total of 0.3% of national healthcare costs. Defensive medicine in total, according to a study by Michael B. Rothberg of the Cleveland Clinc, is at most 2-3%. So the real reason for increasing healthcare costs is the insurance industry’s record-breaking profits. In 2004, the insurance industry’s profits were $38.7 billion, and by 2007, it was up to $61.9 billion. A July 2010 report from PricewaterhouseCoopers concluded that the private insurers stand to gain up to $200 billion in revenue by 2019. The U.S. Treasury’s report from 2013 said:
The financial performance and condition of U.S. insurers continued to show recovery and improvement from the decline during the financial crisis. In 2012, the U.S. insurance industry reported record aggregate premium levels. Net written premiums in the United States were approximately $645 billion in the life and health (L/H) sector and approximately $460 billion in the property and casualty (P/C) sector.
At year-end 2012, moreover, reported surplus levels were at record highs for both the L/H and P/C sectors. Both sectors had reported decreases to surplus in 2008 from the then-record surplus levels reported at year-end 2007, which were $267 billion and $529 billion, respectively. Since 2008, both sectors have reported surplus increases each year. For year-end 2012, L/H sector reported surplus was approximately $329 billion and P/C sector reported surplus was approximately $597 billion. Both the L/H and P/C sectors reported improved profitability in 2012.
The take away:
The anti-tort talking points by politicians are just that – talking points. They sound good on television, but can’t be backed up with any actual facts. Tort deform would do nothing but benefit corporations and prevent injured persons from seeking resolution through the court system.