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The myths of tort reform

“Frivolous lawsuit” – a buzzword that insurance companies use to vilify and misrepresent the work personal injury attorneys do for their clients. The insurance industry has funded entire think tanks dedicated to creating studies to make the public believe “frivolous lawsuits” are out of hand and terribly common. The lobbying of insurance reformists and pro-tort reform politicians has led to myths about certain cases being spread around liberally.

The oft-cited McDonald’s Hot Coffee case is used as the rallying call for pro-tort reformists, making it seem as if some careless person merely spilled hot coffee on their lap and was looking for a quick, easy payout. In reality, the victim Stella Liebeck was a 79-year-old woman who was inflicted with 3rd degree burns requiring skin grafting to her groin area. If you are currently eating or have small children in the room, refrain from Google image searching her injuries. In the end, Liebeck was awarded with the equivalent of 2 days-worth of coffee sales ($2.7 million) despite Liebeck initially only wanting $20,000 to cover her actual and anticipated medical costs. This decision was appealed by McDonald’s and Liebeck eventually settled for an undisclosed amount less than $600,000.

So why is it that the insurance industry and tort reform lobbyists seem so insistent on perpetuating these frivolous lawsuit myths? The obvious and correct answer is it is in their (and truly only their) financial best interest to pass tort reform. The tort reform lobby wants the American public to believe tort reform will reduce medical costs and improve the supply of doctors.

The fact is it doesn’t.

A study published in 2012 by a bipartisan research group looked at medical costs in Texas after Texas passed a tort reform amendment in 2003. This group, composed of two Republicans, a Democrat, and a foreign national, concluded that medical costs in Texas in fact rose 1 to 2% faster than the rest of the country. You can read the full study here. This $750,000 cap on pain and suffering damages also made it difficult to justify the litigation costs of medical malpractice suits, leaving many victims of malpractice unable to find an attorney.

The pro-reform lobby also claims that tort reform will lead to an increase in the supply of doctors. The bipartisan group found that, considering factors such as doctors that leave the state or retire and physicians that only deal with research or administration, the number of direct care doctors actually grew more slowly following the passage of the tort reform amendment.

All of this research points to my earlier conclusion, insurance companies don’t care about the well-being of their insureds when they are promoting tort reform laws. They are only looking after the well-being of their profit margins. Using rising medical costs as a scapegoat, the insurance industry wants to make getting fair settlements for all insurance cases that much more difficult – ultimately to the detriment of the American people.  

If you need experienced legal representation that will fight for your right to fair compensation, contact me for a free consultation. 

Join The Conversation
Jim 07/16/2014 02:15 PM
The other thing about that always bothered me about the McDonald’s Hot Coffee case that most people don't realize is that McDonald’s had made the decision to serve their coffee hotter than other places. They had calculated the probability of people getting injured, but they felt that the profits from the extra coffee sales would cover any legal expenses from injured customers. They made the business decision to potentially allow people to get burned.
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