Tort Reform Has Become A Prominent Issue At The Federal Level

Over the past year, the Congress has considered several specific tort reform bills: for example, the Asbestos Compensation Fairness Act of 2003 (H.R. 1586), which would prohibit punitive damages in asbestos cases, and the HEALTH Act (H.R. 5) and the Common Sense Medical Malpractice Reform Act of 2003 (H.R. 321), both of which would limit damages in medical malpractice cases. More general proposals for tort reform have also come before the Congress, notably the Class Action Fairness Act of 2004 (S. 2062), which would have allowed more cases to be transferred from state courts to federal courts. In many instances, states have enacted tort reform proposals similar to those being considered at the federal level. This paper reviews the major studies published since 1993 that evaluate state-level tort reforms and assesses the relevance of that research for evaluating similar federal proposals.

A tort is an injury to someone's person, reputation, or feelings or damage to real property.(1) Under the U.S. system of tort liability, courts can hold injurers liable for many different types of torts, such as those caused by automobile accidents, contract fraud, trespass, medical malpractice, and defective products. The major categories of tort litigation are automobile-related torts (53 percent), premises liability (16 percent), and medical malpractice (15 percent).(2) The plaintiff in a tort suit can seek compensation of two types: compensatory damages to cover the "economic" cost of an injury--for example, medical costs and lost wages--and the "noneconomic" costs of pain and suffering and punitive damages intended to punish a defendant for willful and wanton conduct. (See Box 1 for a list of definitions of some common tort terms.) U.S. tort law is almost exclusively contained in state law, and the large majority of tort cases are filed in state courts. In 2000, more than 700,000 torts were filed in state general courts, compared with only 37,000 in federal courts. Tort law is based primarily on common law--in which judicial rules are developed on a case-by-case basis by trial judges--rather than on legislation. 
 
Definitions of Some Common Tort Terms

Collateral-source payments: Amounts that a plaintiff recovers from sources other than the defendant, such as the plaintiff's own insurance. Under the collateral-source rule, that compensation from other sources may not be admitted as evidence at trial.

Contingent fee: A fee charged by an attorney for his or her services only if the lawsuit is successful or is favorably settled out of court. Usually, the contingent fee is calculated as a percentage of the amount the plaintiff recovers from the defendant.

Economic damages: Funds to compensate a plaintiff for the monetary costs of an injury, such as medical bills or loss of income.

Joint-and-several liability: Liability in which each liable party is individually responsible for the entire obligation. Under joint-and-several liability, a plaintiff may choose to seek full damages from all, some, or any one of the parties alleged to have committed the injury. In most cases, a defendant who pays damages may seek reimbursement from nonpaying parties.

Malpractice: "An instance of negligence or incompetence on the part of a professional."(1)

Negligence: A violation of a duty to meet an applicable standard of care.

Noneconomic damages: Damages payable for items other than monetary losses, such as pain and suffering. The term technically includes punitive damages, but those are typically discussed separately.

Punitive damages: Damages awarded in addition to compensatory (economic and noneconomic) damages to punish a defendant for willful and wanton conduct.

Statute of limitations: A statute specifying the period of time after the occurrence of an injury--or, in some cases, after the discovery of the injury or of its cause--during which any suit must be filed.