U.S. Federal Tort Reform: The Unstated Effects

rachaelkennedy
April 14, 2012

Tort Reform in the U.S. is topic discussed ad nauseam. Reports with hidden questionable intent state that the federal government will save some 54 billion dollars over a decade if tort reform is implemented. And, if you’ve read the House of Representatives Bill, H.R. 5, you may even be convinced that court, Medicaid and Medicare, and overall healthcare costs will decrease if the bill is approved. Whether that is the case will not be debated at this time; however, there are important effects that this reform will produce and unfortunately no one is talking about them.

State Constitutions Affected
As we all know, federal law supersedes state law. Thus, the following states will find that prohibitions in their state’s constitution will be voided:

Arizona, Arkansas, Kentucky, Pennsylvania, and Wyoming will find that the prohibitions their state constitution placed on establishing damage caps are voided;
Ohio and Oklahoma will find that that the prohibitions their state constitution placed on establishing damage caps in wrongful death cases are voided;
Alabama, Georgia, Illinois, New Hampshire, Oregon, and Washington all had court decisions that deemed medical malpractice damage caps unconstitutional in their states. These states will find that federal tort reform will contradict their state’s constitution.

Lawyers Affected
Personal injury lawyers and medical malpractice lawyers will all be greatly affected by federal tort reform if it passes. Take the example of Texas, which passed a $250,000 cap on noneconomic damages in personal injury cases in 2003, the same cap that is being proposed by H.R. 5. As a result of this cap, the following took place.

First, the number lawyers practicing medical malpractice in Texas is believed to have dropped an astounding 95%; these lawyers have either switched specialties or moved to another state. The remaining 5% consists of about 3 medical malpractice law firms in the state of Texas. A Google search will surely show you a few hundred firms that claim to practice medical malpractice in Texas, but in reality these firms are simply referring medical malpractice cases out to the few firms that still handle such cases; referring firms get a percentage of any winnings a medical malpractice lawyer takes home from a case, so it is in the interest of firms to present themselves as though they take medical malpractice cases when in fact they don’t.

Second, the remaining medical malpractice lawyers have begun severely screening cases they are presented with. For instance, according to a Texas A&M University report, in the instance of a 45-year-old employed man injured as the result of medical negligence before tort reform, 67.3% of lawyers would take the case, 25.5% would consider taking the case or refer it out to another law firm, and 7.3% would not take the case. After tort reform, however, only 37.3% of lawyers would take the case, an increased number of lawyers would take the case or refer it out (more likely choosing to refer it out as less were taking medical malpractice cases), and 30.5% would not take the case. This is all because tort reform caused the costs associated with filing suit to increase while simultaneously cutting the amount medical malpractice lawyers can make from a case; tort reform effectively took away lawyers incentives to take medical malpractice cases. These are all huge indicators of how tort reform in Texas has negatively impacted lawyers, and thus citizens. With less lawyers available and willing to take cases, less citizens are able to seek justice for the injuries they have sustained as the result of medical negligence.

This will all take place if H.R. 5 is passed, only the situation will be worse. Yes, there will be less medical malpractice lawyers, lawyers will screen cases more severely, and the costs of filing a medical malpractice suit will increase while the amount lawyers take home will decrease. However, H.R. 5 also “Allows the court to restrict the payment of attorney contingency fees. Limits the fees to a decreasing percentage based on the increasing value of the amount awarded.” If we consider the Texas example, this means that attorneys taking medical malpractice cases will take home even less; meaning U.S. lawyers will have a very low incentive to take medical malpractice cases. With no one to represent injured U.S. citizens, who will aid them in seeking justice from negligent health care providers.

Rachael Kennedy is a freelance writer and blogger. A University of Texas graduate, her career currently revolves around the problems of medical malpractice and nursing home abuse. As such, she writes about how patients can protect themselves, act in the event of injustice, and hire genuinely successful nursing home abuse attorneys. In her spare time, Rachael enjoys reading, playing with her chocolate lab, and cycling.