Debunk the most popular tort reform myths.

We’ve heard the arguments for tort reform before – frivolous lawsuits, jackpot justice, disappearing doctors – but what we don’t hear is the truth. All of these myths are propaganda dreamed up by big businesses who want to scare you into giving up your rights.

Fiction

People are filing frivolous lawsuits that clog our justice system and take advantage of the courts.

Fact

Despite popular opinion, statistics show that America doesn’t have a frivolous lawsuit problem.

The Rand Institute for Civil Justice, one of the most respected think tanks in the nation, found that only 10 percent of injured people seek compensation and only 2 percent of them file lawsuits. The Rand Institute also found that since 1991, tort cases reflected only six percent of all cases filed. Other reports have shown that:

  • While populations have grown nationwide, personal injury lawsuits have decreased by 21 percent.
  • Personal injury lawsuits represent only 1.3 percent of all civil dispositions.
  • From 1992 to 2005, jury trials in personal injury cases have seen a 52 percent decrease.
  • A survey of judges in Texas, where tort reform support runs high, found that 86 percent of them felt there was no need for legislation to limit lawsuits.

The frivolous lawsuit myth is an invention of big business. Corporations and insurance companies, though selective and sometimes entirely false reports, have framed several legitimate lawsuits as frivolous and an abuse of our courts. Through a relentless and well-funded public relations campaign, big business has transformed civil cases into urban myths that propagate the frivolous lawsuit myth. Frivolous lawsuits are just another bogey man trotted out by corporate interests to scare us into giving up our rights.

Click here to read more about the frivolous lawsuit myth.

Fiction

Plaintiffs and lawyers gamble in our courts to get ridiculous verdicts that far outweigh actual damages.

Fact

Through a campaign of deceit, corporations and the insurance industry have successfully transformed injured victims into greedy liars.

hey paint a picture of plaintiffs with dollar signs in their eyes and personal injury lawyers who are only too happy to manipulate our justice system for maximum financial reward. What big business lobbyists won’t tell you is that multimillion-dollar verdicts are rare. The Bureau of Justice Statistics found that the 2005 median award for plaintiffs who won monetary damages in civil trials was $28,000. Meanwhile, only 4 percent of all plaintiff award winners were awarded $1 million or more.

Tort reform advocates also argue against the jackpot punitive or exemplary damages. Such damages are imposed in addition to compensatory or physical injuries. Punitive damages serve as a sanction for behavior that is judged to be particularly reckless. Big business, unwilling to be held responsible for their mistakes, have demonized punitive damages and spread the myth that juries are handing out multimillion-dollar awards left and right. Actually, punitive damages are rare. The Bureau of Justice Statistics found that in 2005, punitive damages were awarded to only 5 percent of plaintiffs in civil trials. A group of legal scholars convened by the Supreme Court also found that:

  • Juries award punitive damages infrequently.
  • Punitive damage amounts have not increased in the past several decades with the exception of adjustments for inflation.
  • The amounts of punitive awards rendered by juries and judges are similar.

Meanwhile, the majority of punitive damage lawsuits involve businesses suing other businesses, often over trademark infringement or contract disputes. Many of these cases have even been viewed as frivolous. It seems as if businesses are fine with punitive damages as long as they’re the plaintiffs.

Even if juries were more likely to impose outstanding awards, judges can exercise supervision through post-verdict motions or on appeal. In other instances, post-verdict settlements can reduced or abandon punitive awards without judicial intervention.

Fiction

Our tort system threatens business owners and job creators with frivolous lawsuits that will drive them out of our state and take much-needed jobs elsewhere.

Fact

The argument against “job-killing lawsuits” is just an opportunistic way for big business to take advantage of our current economic climate.

The truth is that corporations and small businesses alike have repeatedly admitted that fear of litigation is not a high motivator for them.

In 2008, the National Federation of Independent Businesses, a small business lobbying group, surveyed its members, asking them to rate their problems and priorities. Out of the 75 issues surveyed, “Cost and Frequency of Lawsuits/Threatened Lawsuits” ranked #65 – right behind “Solid and Hazardous Waste Disposal.”

The Economic Policy Institute also found that “there is no historical correlation between the inflated estimates of the costs of the tort system and corporate profits, product quality, productivity, or research and development spending.” In fact, their report concluded that “significant tort reform change would be more likely to slow employment growth than to promote it. Endlessly repeating that so-called ‘tort reform’ will create jobs does not make it true.”

Fiction

“Judicial hellholes” are dangerously out of balance regions where courts, laws and regulations routinely produce unfair civil justice outcomes.

Fact

“Judicial hellholes” are the brainchild of the American Tort Reform Association.

Created in 2002, ATRA’s annual list of judicial hellholes has been widely ridiculed and debunked by independent experts. In 2007, The New York Times found ATRA’s report had “no apparent methodology” and said “the question is whether the report’s arguments make sense.” In addition to questioning the validity of ATRA’s findings, several of their reports have glaring inconsistencies and blatant lies. For example, ATRA has repeatedly highlighted Madison County, Illinois as being one of the worst judicial hellholes in the country; however, the county has actually seen a sharp decrease in class action lawsuits and had only four medical malpractice verdicts that favored plaintiffs in nearly a decade.

When considering “judicial hellholes,” it’s important to consider the source of the information. The American Tort Reform Association is merely a front group for corporations determined to undermine the courts and protect themselves from liability. ATRA is funded by insurance, tobacco and drug companies, including such giants as Philip Morris, Dow Chemical, Exxon, General Electric, and State Farm, Geico, and Nationwide. All of these companies have an interest in shielding their profits from lawsuits by shutting the courthouse doors on consumers.

“Judicial hellholes” don’t actually exist and are only a scare tactic bankrolled by big business.

Fiction

Medical malpractice lawsuits are driving up healthcare costs for everyone.

Fact

Medical negligence compensation accounts for only 0.3 percent of national healthcare costs.

According to the National Association of Insurance Commissioners, the total amount spent defending medical malpractice claims and compensating victims is $7.1 billion annually – just 0.3 percent of America’s $2.2 trillion in overall healthcare spending. Meanwhile, the real driver of healthcare costs are preventable medical errors, which are responsible for an additional – and unnecessary – cost of $29 billion annually.

Fiction

Medical malpractice litigation is forcing doctors out of practice.

Fact

In the past decade, the number of practicing physicians has steadily increased and is currently at an all-time high.

In 2007, a study found that the number of physicians per 100,000 people is at an all-time high of 307, far outpacing population growth. Since 1990, the number of physicians has increased 40 percent while the U.S. population seen an increase of 18 percent. From 2006 to 2007 alone, the nation saw an increase of 20,000 physicians.

Fiction

Medical malpractice is driving physicians out of states without damage caps.

Fact

The number of physicians in every state has increased, and there are actually more doctors in states without damage caps.

The National Bureau of Economic Research has found that “increases in malpractice payments made on behalf of physicians do not seem to be the driving force behind increases in premiums.” Meanwhile, Americans for Insurance Reform has found that “rate increases were rather driven by the economic cycle of the insurance industry, declining interest rates, and investments.”

Fiction

Medical malpractice claims drive up doctor’s medical malpractice insurance premiums.

Fact

There is little correlation between medical malpractice claims and medical malpractice insurance premiums. Instead, premium rates are driven almost entirely by insurance trends.

The National Bureau of Economic Research has found that “increases in malpractice payments made on behalf of physicians do not seem to be the driving force behind increases in premiums.” Meanwhile, Americans for Insurance Reform has found that “rate increases were rather driven by the economic cycle of the insurance industry, declining interest rates, and investments.”

Fiction

Damage caps lower doctors’ medical malpractice insurance rates.

Fact

The average liability premium is higher in states with damage caps than those without it.

With damages capped, insurance companies pay out less money for awards, but they don’t pass those savings on to doctors in the form of lower premiums. The strongest example of this is Texas, which passed a restrictive damages cap in 2003. Following the cap, the nation’s largest medical malpractice insurer – GE Medical Protective – told the Texas Insurance Commissioner that caps had a negligible impact on rates while announcing a 19 percent increase in doctors’ premiums. In its filing, GE Medical Protective acknowledged that “non-economic damages are a small percentage of losses paid. Capping non-economic damages will show loss savings of 1.0 percent.” Even the president of the American Insurance Association has said that “we have not promised price reductions with tort reform.”

Fiction

The threat of litigation delays the delivery of life-saving drugs to the market.

Fact

The strongest opposition to new drugs entering the market are pharmaceutical companies.

At least 82 percent of American adults take a prescription drug regularly. The pharmaceutical industry is exploding, and Big Pharma wants to hold on to as much of its profits as possible. While it would seem logical that more drugs on the market would amount to more profits for pharmaceutical manufacturers, the fact is new drugs could damage their existing and reliable revenue streams.

In addition to marketing prescription drugs, Big Pharma is also busy with litigation. The industry files thousands of lawsuits each year to protect patents they have on existing drug formulas. Protecting their patents prevents other manufacturers from marketing generic drugs at lower prices and digging into their corner on the market.

Putting profits before patients, the biggest – and most well-funded – opponent to life-saving drugs are pharmaceutical companies themselves.

Fiction

Greedy plaintiffs and their attorneys abuse our judicial system by taking their cases to courts that are likely to give them the verdict they want even if their case has nothing to do with that jurisdiction.

Fact

Larger court systems have the resources to handle complex cases in a timely and efficient manner.

Negligence victims face several stall tactics in their pursuit of justice, but the most daunting is the sometimes slow pace of justice. Courts across the nation are facing significant budget cuts that have resulted in staff layoffs and a backlog of cases. Instead of relying on an already overburdened local court, some plaintiffs seek relief in larger court systems.

Larger court systems have several advantages over smaller, local ones. These courts typically have the expertise needed to hear complex cases, and they also have the resources to handle litigation in a timely and efficient manner.

The goal of venue reform is to bog down cases in local courts. Big business and insurers are betting that injured plaintiffs don’t have the time or resources to wage a lengthy legal fight. They rightly assume that victims are more likely to settle for less than they deserve to avoid years of potential litigation. Smaller settlements translates to less justice for victims and more profits for corporate interests.