Tort Reform Myths: Jury Awards Are Out of Control
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Another major claim of tort reform proponents is that jury awards are out of control. This claim is ironic to say the least, in every courtroom in America there is a dirty little secret corporate America exploits. As previously discussed: from jury selection, to cross examination, on to deliberation there is one thing on the mind of every juror deciding a tort claim in America today: that dumb old woman spilled coffee on herself and got $3 million dollars. The harsh reality that jurors are strongly biased against negligence claims is irreconcilable with tort reformers position that jury awards are out of control. Apparently, tort reformers want to have their cake and eat it too. Further, appellate courts typically knock down excessive jury awards.
A large portion of the debate over excessive jury awards centers around medical malpractice claims. In our inflationary economy the price of medical services has increased steadily. Strangely, medical negligence claims are valued primarily on future and past medical costs. The cost of reimbursing medical negligence has increased steadily with medical inflation. Information from the National Practitioners’ Databank reveals that,
the number of medical negligence payouts have decreased 36% between 1993 and 2002; the amount paid out per claim has risen, but by less than 6% per year, more than 1% less than the rate of medical inflation. ISMIE paid out less in actual dollars in 2001 and 2002 than it did in 1993. This reduction in payouts has contributed to record surpluses for the insurance companies over the past few years, despite their claims of a litigation “crisis” causing higher premiums.
Thus, the costs of medical negligence payouts have increased at rate less than half that of medical inflation. Further, the national Association of Insurance Commissioners has revealed a 4% decrease in claims between 1995 and 2000. It appears that the frequency of medical malpractice claims has went down, the total costs of payouts has went down, individual awards have increased proportionally with medical inflation, while insurance companies have steadily increased their medical malpractice insurance rates and claimed a litigation crisis. Once again, the statistics appear irreconcilable with the claims of tort reform proponents.
