Sunday, August 5th, 2012
We’ve all heard that America is a “litigious society” and that Americans are lawsuit happy. We have heard that frivolous personal injury (t0rt) lawsuits are clogging up our courts. We have heard that personal injury lawsuits are driving doctors out of their practices and putting companies out of business.
Here’s something you probably haven’t heard. According to the most recent data from the National Center for State Courts (NCSC), only 5 percent of all civil cases brought to court are tort cases. Yes, 5 percent! That includes medical malpractice lawsuits, which are less than half of that 5 percent.
On the other hand, about 70 percent of civil cases brought to U.S. courts these days are contract disputes, mostly debt collections or foreclosures. According to a paper at the Center for Justice and Democracy at New York Law School — “The only ’sue-happy’ people in this country are banks and debt collectors.”
It’s important to understand this, because in state after state lobbyists are persuading state legislators that “tort reform” laws that cap damages and make lawsuits harder to file will be good for their states. But the promised benefits, such as lower health care costs, never materialize. The people who are hurt are those who have been damaged, such as mesothelioma sufferers, most of whom got sick because they were exposed to asbestos on the job.
But what about all those malpractice lawsuits that are driving physicians out of the medical profession? Public Citizen reports that–
“Medical malpractice payments in 2011 were at their lowest level on record by almost any measure, discrediting the claim that these payments are to blame for the skyrocketing cost of health care, a new Public Citizen report finds.”
Public Citizen analyzed data from the National Practitioner Data Bank (NPDB), a data base maintained by the federal government that tracks malpractice payments. They found that the number and inflation-adjusted value malpractice payments are at their lowest level since 1991, which is as far back as the data go.
Yet we are still being told that “tort reform,” which makes it harder to file malpractice suits and limits the amounts of damages, will magically lower health care costs.
The Center for Justice and Democracy also says that the claims of the cost of personal injury litigation are based on faulty numbers generated by an insurance industry consulting firm. That firm is Towers Watson, which issues an annual report called “Tort System Costs.”
Towers Watson typically claims that the cost of the U.S. tort system is $251 billion, or 2.2% of our GDP, or $808 per person. These figures are picked up by journalists, politicians and “think tanks” and used to argue that personal injury suits must be restricted.
But the Center for Justice and Democracy documents that Towers Watson’s numbers do not represent the costs of the tort system at all. Towers Watson is measuring insurance industry costs, and these costs include payments of insurance claims even when no lawsuit is filed. It also includes items like insurance companies’ administrative and marketing overhead, including private jets and country club memberships for executives.
The tort reform laws pushed through state legislatures in recent years are not in the public’s best interest. They are in the best interest of companies whose products hurt people, employers who don’t follow safety standards, and careless physicians.