Tort Reform Movement Essay

Where Have All the Cases Gone? The Strange Success of Tort Reform Revisited
Stephen Daniels,
Joanne Martin

Abstract

Just over a decade ago, we published an article in the Emory Law Journal titled The Strange Success of Tort Reform, which was inspired by our interest in the possible connection between tort reform and the declining number and rate (per 1000 population) of tort cases. The article argued that tort reform could succeed in decreasing tort litigation, even in the absence of much formal change in the law. It could do so through sophisticated and aggressive public relations efforts aimed at reshaping the market environment in which plaintiffs’ lawyers work in ways that made their practices more financially precarious. Since that article’s publication, there has been considerable and continuing distress about the apparent demise of the civil jury trial. In this article we revisit our earlier argument about tort reform’s strange success with this concern in mind. In doing so, we agree—to an extent—with those skeptical about a decline in the number of jury trials. At least in terms of auto accident cases—the most prevalent kind of tort case and the type of case that accounts for a large proportion of jury trials—it is not that jury trials are vanishing, it is the cases themselves. We think the important question is more about whether there is something affecting the number of cases that come into the civil justice system, rather than just how they leave it. In other words, it is more a question about tort reform’s impact on the front end of the process rather than the back.

Introduction

“Unless there’s a way to make money practicing law, rights don’t make any difference.” This is what a Texas plaintiffs’ lawyer told us in describing the consequences of tort reform’s impact on his practice. Just over a decade ago we published an article in the Emory Law Journal titled The Strange Success of Tort Reform. A part of the 2004 Thrower Symposium that focused on tort reform, the article was driven by our interest in the possible connection between tort reform and the declining number and rate (per 1000 population) of tort cases. It took an unusual tack for a law school symposium and argued that tort reform could succeed even in the absence of much formal change in the law —formal changes in the law being the more typical focus for law school symposia. Tort reform could do so, we said, through sophisticated and aggressive public relations efforts and political campaigns aimed at reshaping the market environment in which plaintiffs’ lawyers work. This reshaping, in turn, would make it much harder for the practices of these lawyers to remain profitable. Market reshaping and profitability become important because these lawyers are the gatekeepers of the civil justice system. They provide meaningful access to the rights and remedies the law offers. In other words, they close the gates to the courthouse by focusing tort reform activity on the gatekeepers.

In retrospect, that success may not be all that strange. It can be seen as a part of what some may see as a broader, long-term “war on civil justice.” This “war” is consistent with an even broader, conservative political movement and its interest in reshaping the law to serve its interests. Relatedly, since the early 2000s there has been considerable distress about the apparent demise of the civil jury trial as perhaps the key form of court-centered litigation. We want to revisit our earlier argument about tort reform’s success in light of more recent patterns and changes in tort cases and the contemporary concerns about the declining incidence of courtcentered litigation—especially with regard to civil jury trials. And, we want to do so in the context of the research we have done since that earlier article. As will become clear, we agree—to an extent—with those skeptical of the recent concern over jury trials and the consequences of their apparent demise. At least in terms of auto accident cases—the most prevalent kind of tort case, accounting for a large proportion of jury trials —it does not appear that juries are vanishing, although it might be that the cases themselves may have at certain points in time. We are not, however, skeptical about the war on civil justice itself and its possible success. We think the important question is more about whether cases continue to come into the civil justice system rather than just how they leave it. In other words, it is more a question about tort reform’s impact on the front end rather than on the back.

Our 2004 Emory Law Journal article focused on Texas, where we have been doing research related to civil justice for many years and continue to do so. Texas is our laboratory and our focus here. For this Article we are interested in what has happened more recently with regard to tort cases and dispositions, especially trials. The 2004 article explored changes in tort litigation rates and dispositions—specifically auto accident cases—in light of the ways in which plaintiffs’ lawyers altered their practices based on their perceptions of the tort reformers’ public relations and political campaigns. Those alterations ranged from leaving the practice area altogether to taking fewer auto cases, to screening cases more stringently, and even to turning away certain kinds of clients they would have taken previously (clients with good cases).

Here we reexamine those issues with updated data on tort cases, dispositions, and on plaintiffs’ lawyers collected after the 2004 article. The major source for the earlier article was a survey of Texas plaintiffs’ lawyers we completed in 2000 and the in-depth interviews with plaintiffs’ lawyers done prior to the survey. The major source for this Article is a second survey of Texas plaintiffs’ lawyers we conducted in 2006, along with a second round of interviews. The two surveys and the two rounds on interviews included many questions in common that allow for comparisons at two different points in time.

Among the common questions were ones about:

  • perceptions of tort reform and juries;

  • personal and professional backgrounds;

  • reasons for choosing a plaintiffs’ practice;

  • nature of practices;

  • nature of clients;

  • how clients are obtained and screened;

  • views of advertising and other means of attracting clients;

  • firm organization and financing; and

  • professional and political activities.

With regard to professional background and nature of practice, we specifically asked if they were certified by the Texas Board of Legal Specialization.

Certification is important to our re-examination in light of the concerns over vanishing trials. Established in 1974, the Board certifies Texas lawyers in twenty-one different practice areas. Certification signals a well-understood level of specialized expertise and experience, and gaining certification is no simple matter—fewer than 10% of all Texas lawyers are certified in at least one of the twenty-one areas. It requires a set number of years of relevant experience and passage of a written exam, and it must be periodically renewed. The two most relevant for plaintiffs’ lawyers and this Article’s discussion are personal-injury trial law and civil trial law. Certification in personal injury trial law, civil trial law, or both represents a commitment to a specialized practice that is litigation-focused. For us, the question is whether the interest in these two certifications is waning.

Finally, juries have always played an important role in our research on civil justice and tort reform, and they do in this Article as they did in the earlier one. Both of our plaintiffs’ lawyer surveys and our interviews included a host of questions probing—in detail—lawyers’ perceptions of juries and jury behavior in ways that allow us to explore the connections to the strange success of tort reform. Most of these questions were among the ones that literally appeared verbatim in both surveys. Here we use that information in addressing the concern over the demise of trials, especially jury trials.

Despite the apparent strange success of tort reform through the first decade of the 2000s, there have been some recent, interesting changes in the number of auto accident cases and trials that our research cannot yet fully explain. This is still a very dynamic civil justice system and these recent changes will require additional research to understand.

I. Context: “There’s Somethin’ Happenin’ Here, What It Is Ain’t Exactly Clear”

The context for our 2004 article was the idea—then still very much alive—of a litigation explosion, one that seems to have lost traction in the face of empirical evidence. A 2013 article by a journalist and long-time astute observer of the Texas civil justice system nicely captures the more contemporary context with its different focus—civil juries. Writing in the Dallas Morning News, Mark Curriden highlighted the decline in jury trials and opened with a 1997 quote from Judge Patrick Higginbotham: “There are certain elites in this country who don’t trust juries. . . . The future of our jury system is very much in danger.” Curriden noted that at the time, “most lawyers and judges scoffed at the suggestion,” but, since 1997, “civil jury trials have plummeted to 40-year lows.” He pointed out that between 1997 and 2012 there was a 64% decline in civil jury trials in the Texas district courts. Citing figures representing a 63% decline over the same time period, he added that civil jury trials in Texas federal courts showed “an equally significant decline.”

A quote from a well-known Texas plaintiffs’ lawyer was offered by Curriden to characterize the stakes: “This means justice in Texas is at a 40-year low.” However, the concern about civil jury trials is not one-sided. Curriden also quoted the then-head of the Texas Association of Defense Counsel as saying that the decline in jury trials is “profoundly negative” and “an unhealthy trend for those seeking justice”—a trend he believed would continue. The causes offered for this decline include lawyers’ distrust of juries, cost (especially for discovery), the use of mediation or arbitration, tort reform, and appellate court decisions.

Interestingly, another district court judge in Texas, Judge Xavier Rodriguez, addressed the same kinds of declines in jury trials, but he was not so sure it was an “end of justice as we now know it.” His concern was federal practice, and he noted a host of changes that might have made jury trials less attractive (for example, discovery costs) or lessened the need for jury trials (for example, mediation, arbitration, jury waivers, better case management by judges). The judge noted, “[I]f cases are not being tried because of the costs and delays attended in getting a case to a jury, then procedural reform of our system is imperative.” On the other hand, he asked, “If voluntary mediations settle cases after informed decisions are made, why is this not a form of collaborative justice that is touted and praised in many legal circles?” Still, the judge bemoaned what he saw as the lack of research on what kinds of cases are tried, and specifically those tried to a jury, and saw potential problems if certain kinds of cases no longer go to a jury. “If civil jury trials are declining in cases addressing rights of assembly, free speech and expression, and denial of due process, that may be troubling.”

With regard to Texas state trial courts, similar observations about declining jury trials and the reasons behind them can be found in a 2005 law review article by then Texas Supreme Court Justice Nathan Hecht (now Chief Justice). His particular interest was civil jury trials in Texas. Chief Justice Hecht, like all of the others addressing the issue, did not question the decline in civil jury trials, and he summarized the findings of an influential 2004 article by Marc Galanter—The Vanishing Trial: An Examination of Trials and Related Matters in Federal and State Courts —noting, “[B]y any measure, the number of jury trials in federal courts has declined precipitously since about 1985.” In turning to Texas specifically, he examined data from the Texas Office of Court Administration for fiscal years (September to August) 1986 to 2004. Using those materials he concluded that “annual numbers of jury trials in civil cases declined fairly evenly between 1986 and 2004,”—a decline of 49%.

Like Judge Rodriguez and Curriden, Chief Justice Hecht looked for possible explanations in a number of factors—for example, cost (especially discovery), delay, perceptions of jury behavior, arbitration and mediation, tort reform and other substantive changes in the law, changes in procedural law, and judges acting more as case managers. Unlike Judge Rodriguez and Curriden, Chief Justice Hecht seemed skeptical of the growing concern over jury trials and the idea that the decline in trials represents an end of justice as we now know it. And he is not alone. In his observations on Galanter’s article and its influence, one prominent commentator—law professor and political scientist Herbert Kritzer—reminds everyone that despite the recent outcries, concerns about “vanishing” jury trials are not new and go back to at least to the 1920s.

A key part of Chief Justice Hecht’s skepticism goes to his characterization of those pushing the issue:

It must fairly be said that civil disputes are being resolved sufficiently to the satisfaction of the public and the bar that the decline in civil jury trials was scarcely noticed until fairly recently. Increasingly, the pretrial process is but a preface to mediation. This seems to have met with judicial approval, and if the bar and litigants are discontent, at least they have raised little objection.

With regard to those decrying the trend to fewer jury trials because of the many benefits of such trials, he added, “Jury-trial defenders sound like someone selling cod liver oil as a soft drink and insisting that people should buy it because it is good for them, even though it costs more than soda and leaves a bad taste in the mouth.”

Regardless of the causes of the decline and the proffered solutions to remedy the problem, Chief Justice Hecht is resigned to what he thinks may be inevitable. “The civil jury trial, as a dispute-resolution product, is losing its market,” and he is not sure the trend can be stopped. It has “continued . . . over decades, cannot easily be reversed and will likely be irreversible at some point.” Still, Chief Justice Hecht—while he may not want to ally himself with the “jury-trial defenders”—finds the decline in civil jury trials troubling. “My own view is not only that the civil jury trial is well worth preserving, but that it must be preserved to assure public participation in civil dispute resolution, the continued development of the common law, and a bar well trained in advocacy.” For Chief Justice Hecht, perhaps the problem with the current concern over the decline in civil jury trials is not so much the decline (which does worry him) as it is those pushing the issue—the jury-trial defenders trying to sell cod liver oil. At least in Texas, many of those defenders are his political adversaries and are at odds with him on a variety of issues dealing with the civil justice system—especially with regard to tort matters and the practices of plaintiffs’ lawyers.

It is worth noting that Texas is not the only state in which concern over declining jury trials has become an issue in light of the Galanter article. For instance, in early 2015 the Iowa State Bar Association reported on the

continued decline in civil jury trials in Iowa District Courts. In 2014, across the state there were only 184 civil cases with jury verdicts entered . . . . [D]uring 2014, there were 13 Iowa counties where no trial verdict was entered in Iowa District Court whatsoever, civil or criminal. In total, 61 counties had three or fewer jury verdicts.

In 2010, the Florida Bar believed the issue was so serious that a special committee was created to investigate the matter with specific attention to Florida’s courts. Galanter’s article, once again, was a key impetus for the committee’s concern. The committee issued its report in 2011, and among its findings was that the number of civil jury trials in the Florida circuit courts declined significantly between fiscal years 1986–1987 and 2009–2010 (64%), as did the percentage of all civil dispositions accounted for by jury trials (88%). The pattern for non-jury trials was no less dramatic—an 88% decline in the number of non-jury trials. Interestingly, from 1986–1987 to 1992–1993, non-jury trials accounted for more dispositions than jury trials (ranging from 2% to 3%). After that, with the exception of 2007–2008, jury trials were more prevalent. The two sets of declines together tell us trials (jury and non-jury) themselves declined as a percent of all dispositions. Between 1986–1987 and 1989–1990, 4% of dispositions were trials. By 2008–2009, the percentage dropped below 1% of all dispositions.

In reading any number of pieces on the jury issue—like the ones just mentioned—one quickly finds the lodestar for much of the concern: Galanter’s 2004 article The Vanishing Trial. The article emerged from the 2003 Litigation Section of the American Bar Association Symposium on the Vanishing Trial and was updated in a 2011 paper by Galanter with Angela Frozena. The findings from the original article have been summarized in many places and there is no need to do so again. Its basic message is one of a substantial decline in the number of trials (civil and criminal, jury and bench) and in the percentage of matters (civil and criminal) disposed through a trial—jury or bench. The possible reasons outlined by Judge Rodriguez and by Chief Justice Hecht are the ones found in Galanter’s work. It should be noted that the focus of the Galanter article was primarily on the federal courts, but it did touch on state courts generally.

The message remains unchanged in the 2011 update of the article, which opened, “The recent data on civil trials can be summed up in two stories: no news and big news. The no news story is that the trend lines regarding the decline of trials are unchanged. The big news story is that the civil trial seems to be approaching extinction.” For the federal courts, Galanter and Frozena reported not only a

long-term decline in the percentage of cases that reach trial . . . [but] an absolute decline that has been proceeding without interruption for about a quarter century . . . .

Although the rates of decline vary from one case type to another, decline is general. There is no major category of cases that is exempt . . . . We think it is fair to say that decline has become institutionalized in the practices and expectations of judges, administrators, lawyers, and parties.

Galanter and Frozena reported that the patterns for the state courts are similar: “The steady fall in the absolute number of trials begins later in the states, in the early-1990s as opposed to the mid-1980s for the federal courts. In both state and federal courts, the decline in jury trials is preceded by a decline in bench trials.” Trials declined for all kinds of cases.

There is an apparent and seldom questioned consensus on the vanishing trial, especially the jury trial. One interesting exception is the commentary of Professor Herbert Kritzer. He wondered whether the data for the federal system—which lie at the heart of the claims about juries—are as clear-cut as some believe. “Without a doubt, some types of trials, such as the jury trial in federal court, have declined in frequency, but the answer to the question of whether trials have generally declined depends on what one chooses to include in the category of ‘trials.’” After exploring different versions of what counts as a trial in the federal system and different parts of the available federal data, Kritzer noted that

over the last thirty years there has been a pattern of decline in the total number of trials in the federal district courts, regardless of what is defined to count as a trial. However, the nature of that decline, and whether that decline has stabilized or, possibly for criminal cases, reversed course so that there is now a pattern of some increase, depends on how one defines a trial.

Kritzer looked beyond the federal trial courts to other federal adjudicatory processes:

[W]hile Galanter’s work shows that federal trials in which lay jurors determine which side prevails have decreased, the number of federal adjudicatory proceedings in which parties have the opportunity to present evidence and challenge the opposing side’s evidence (with the assistance of skilled counsel if desired and affordable) before a neutral decision maker is large, and may actually be growing.

With regard to the states, Kritzer was especially skeptical of specific, generalized claims that dominate the discussion—and for good reason. He noted,

Analyzing the statistics from state courts is challenging due to differences in how states define “trial,” as well as differences in the use of general jurisdiction courts rather than those of specialized or limited jurisdiction. Some states have unified court systems in which there is only a general jurisdiction court, but in many unified court systems, there are specialized dockets for cases such as traffic, family (divorce), probate, and small claims.

Things get even more complicated when other court-like bodies are included in the analysis because of the very different ways states handle these bodies and the kinds of disputes handled.

With respect to the possible cause or causes of any decline in civil trials—jury or non-jury—Kritzer looks at the matter somewhat like Judge Rodriguez and Chief Justice Hecht. Drawing on his own research on the process of civil litigation, he focused on the incentive structure for lawyers and their clients and argued,

Given that the cost of trials in private civil cases falls largely on the parties, one can ask whether the decline is itself a rational and positive development. . . .

. . . If parties look at the economic realities, including costs and uncertainties over outcomes, and conclude that a settlement is preferable to the costs and risks associated with going to trial, particularly a jury trial, why is that a negative development?

This is especially the case for smaller matters in which “the costs of going to trial tend to be a, probably the, driving force; even for plaintiffs paying lawyers on a percentage-fee basis, a compromise settlement will often put more money in the plaintiff’s pocket than will a fully successful trial.”

Whatever may be said about the reasonableness of the various descriptions of patterns and changes in the federal courts with regard to trials, general statements about what is happening in state courts do seem particularly problematic. There are just too many differences among the states in structure and the reporting of data, as Kritzer rightly pointed out; but there are also too many differences among different kinds of cases—especially in the state courts. Too often the claims about state courts—where, of course, most of the action has always been—are stated in the most general terms about all cases—civil or criminal. At best, for civil cases, commentators may remove family cases or probate or juvenile matters from the analysis of state courts. The Florida Bar’s report, for example, excluded family and probate, and Chief Justice Hecht removed family and juvenile matters. But even this leaves a lot of variation with very different kinds of cases still included in the mix. It is not clear what is actually happening in state trial courts despite the bold claims. What is needed, as Judge Rodriguez suggests, is research on dispositions for different kinds of cases—especially what kinds of cases are tried and, more importantly, tried to a jury.

II. Where Have All the Cases Gone? Texas Cases and Dispositions

To characterize his skepticism over the recent concern over jury trials and the possible consequences, Chief Justice Hecht turned to a popular 1960s song recorded by Buffalo Springfield and written by Stephen Stills: For What It’s Worth. For Chief Justice Hecht, as we have seen, it is not clear whether all of the fuss over jury trials is really worth it. To an extent, we agree—but for different reasons—because we think the more important question is about cases coming into the civil justice system rather than just how they leave it. Hence our borrowing from another popular song for our title—Where Have All the Flowers Gone—hoping those readers who remember the song will also remember its refrain “When will they ever learn?” and its variant in the very last stanza, “When will we ever learn?”

We opened our earlier article by noting the decline in the raw number of new tort filings in the Texas district and county courts between 1995 and 2001, as well as a decline in the rate of new filings (filings per 1,000 population) over the same period. Tort cases, especially auto accident cases, were our concern and will be here as well. Despite the recent generalized claims about one way in which matters may leave the courts—trials, and especially jury trials—we again will start our consideration of the Texas situation with what’s coming into the system: tort filings and rates.

Figures 1A and 1B build on material presented in the earlier article and extend it through 2014. Figure 1A presents data on the combined raw number of tort filings in the district and county courts. It shows a long decline that started in the mid-1990s (when the tort reform movement really started to gather steam in Texas). It was interrupted in the early 2000s with a jump in filings to a level almost as high as it was in 1995. Anecdotal evidence from Texas plaintiffs’ lawyers suggests that some of this may have been the result of lawyers trying to file cases before another set of major tort measures enacted in 2003 took effect. But after 2003, the decline continued until 2009 when filings leveled off.

As the lines in Figure 1A reflect, the leveling off appears to be driven by auto accident filings and not torts generally. The number of auto accident filings bottomed in 2008, and then increased again reaching a level in 2014 close to the highest levels in 1995 and 2003 (Figure 1A). After the 2003 spike, the decline for non-auto tort cases continued with no leveling off. The high for non-auto filings was in 1995, and the decline bottomed out in 2008—a 38% decrease. Even with the increase in auto filings starting in 2009, the decrease in all tort filings from 1995 to 2014 is still substantial—27%.

Figure 1B presents data for the rate of filings per 1,000 population, and the decline for the total rate is more dramatic than the decline for raw filings—a decrease of 49% between the high point of 1995 and 2014. The decrease from 1995 to the bottom point in 2008 is 52%. Even though the filing rate for auto cases increased after 2008, it did not reach the high point for auto filing rates, which was in 1996. Between 1996 and 2014, the auto filing rate declined by 33%, and between 1996 and the bottom point in 2008, the decline was 45%. The decline for non-auto tort cases between the high point in 1995 and the bottom in 2014 was 72%. The reason for the more dramatic declines in rates as compared to raw filings is that the Texas population increased steadily as the number of cases decreased.

In addition to information on filings, in the earlier article we also presented data on dispositions in the district courts. Starting with 1981–1985, those data showed a sharp decline in the percentage of auto cases disposed through agreed judgments—or settlements. The data also showed an increase in the percentage of cases disposed by a dismissal by plaintiff or for want of prosecution. The percentage of cases disposed by a trial (bench or jury) stayed relatively stable—just above 10%.

Figure 2 also builds on material presented in the earlier article. It extends the trend for agreed judgments through 2014 and adds more detail. It shows the percentage of auto cases and non-auto cases in the district and county courts disposed by an agreed judgment. What is important here is the general pattern over time, which suggests an environment less conducive to settlement. For each type of case in the district court, the pattern is one of a steady decline. For auto cases, it is one of decline from 1985 to 2010, and then a leveling off (a decrease of 59% from 1985 to 2014). For non-auto cases, it is a decline from 1993 (the pattern was stable between 1985 and 1993) to 2004, and then a slight increase and a leveling off (a decrease of 44% from 1993 to 2014). For the county court, the pattern for both types of cases is also a decline, but the pattern levels off in 2009.

Figure 3 again builds on material in the earlier article, extending the trend for cases disposed by dismissal by plaintiff or for want of prosecution to 2014. It adds detail by including auto and non-auto cases for district and county courts. Again, what is important in a rather messy picture is the general pattern over time. For both kinds of cases in the district court the pattern is one of increase. The increase for auto cases is 60%, and for non-auto cases it is 43%. Like Figure 2, this suggests a more hostile environment for tort cases.

Figures 4A and 4B extend the trends in the earlier article for cases disposed by a trial through 2014, adding more detail. Again, what is important are the general patterns over time. Figure 4A presents data on the percentage of auto cases disposed by a trial (jury plus non-jury) and the percentage disposed by a jury trial. For both the district and county courts there is a clear downward trend for trials from the high points in 1998 to 2014—decreases of 50% and 60%, respectively. However, jury trials are not the reason for the overall trend. While the number of jury trials dropped significantly—from a high of 887 in 1998 to a low of 339 in 2009, with an increase to just 448 in 2014—as a percentage of dispositions, jury trials were always a relatively small percentage of dispositions and range narrowly between 4% and 2%. If one wants to argue about the vanishing of jury trials, it can only be as a reflection of the declining volume—the vanishing—of auto cases. Non-jury trials drove the decline in trials, dropping from a high point of 12% of auto case dispositions in 1998 to 5% in 2014.

Figure 4B presents data for non-auto cases. The patterns are somewhat different, but again, jury trials do not appear to be vanishing as a percentage of dispositions in either court, representing only a small percentage of dispositions. Non-jury trials are another matter. In county courts, the percentage of non-auto cases disposed by a non-jury trial dropped dramatically, from a high of 20% in 1995 to 7% in 2014. In the district courts, the percentage declined steadily until hitting a low of 7% in 2004, then rose again to 11%, only to drop to 8% in 2014.

The patterns for trials in general in Figures 4A and 4B are varied, but the evidence of vanishing jury trials is scant at best. Juries have always been a small proportion of dispositions, but they held their own even as non-jury trials noticeably declined. Only by focusing on the raw numbers, which will always be a function of the changing numbers of cases, can one find something to point to, and it is not clear if that makes sense. If justice in Texas has reached a low point, it is because of fewer cases coming into the courts that allow people to pursue the remedies and rights the law provides, fewer agreed judgments for those cases that do come in, and more cases dismissed by plaintiff or for want of prosecution.

Figures 5A and 5B offer another way of looking at trials. Each shows the percentage of all trials disposed by a jury trial and by a non-jury trial. Figure 5A presents the data for auto cases in the district courts. Both forms of trial stay within a fairly narrow range: between 75% and 81% for non-jury trials and between 19% and 30% for jury trials. Noticeably, in the most recent years, the percentage of jury trials increased, hitting its high of 30% in 2014, and the percentage of non-jury trials decreased accordingly, hitting its low of 70%.

Figure 5B presents the data for auto cases in the county courts. Again, both forms of trial stay within a fairly narrow range: between 76% and 89% for non-jury trials, and between 11% and 24% for jury trials. Noticeably, in the most recent years, the percentage of jury trials increased, hitting its high of 30% in 2014, and non-jury trials decreased accordingly, reaching its low of 70%.

In our earlier article, we argued that the general patterns in dispositions suggest a shift in the informal processes that characterize the handling of most auto cases, with the key factors being a decline in settlements and plaintiffs’ lawyers deciding to drop out of the formal system rather than to go to trial—unless the case is seen as a particularly good one. Jury trials are not vanishing. The interesting question is what might explain such patterns and whether tort reform and its attendant public relations campaigns might help in providing an answer. To find out, we turned to our research on plaintiffs’ lawyers and their perceptions of tort reform and its effects on their practices. We pay particular attention to auto accident cases.

III. Texas Plaintiffs’ Lawyers and Tort Reform: When Will We Ever Learn?

A. One Obvious Factor: The Raw Material—Accidents

Clearly, as we noted in the earlier article, the question is not about an explosion of auto tort litigation in Texas—far from it. The question, rather, is what factors might foster a very real decline—at least through 2008. Before turning to plaintiffs’ lawyers and their views, we must address one obvious answer—a decline in the raw material. Perhaps the decline is a function of fewer accidents, especially those with injuries or deaths. Figure 6 extends a similar figure from the earlier article and addresses this possibility. It uses a filing rate, but one different than the one calculated using population in Figure 1B. It is a statewide filing rate for auto cases (district and county courts combined) per 1,000 injuries or deaths in auto accidents. As we did before, we took this rate for 1985, the first year in our series, and set it to zero. Then we subtracted the original 1985 rate (103.5 filings per 1,000 injuries and deaths) from the rates of each succeeding year. Where the data in the figure in the earlier article ended in 2000, Figure 6 goes through 2014.

If changes in filings were driven largely by changes in injuries and deaths, then we would expect to see little movement from the zero-line after 1985, but Figure 6 shows substantial movement from that line. During the long decline in auto filings, the bars in Figure 6 noticeably grow downward, meaning fewer filings than what might be expected from any declines in the raw material alone. The bars increase starting in 2010, more than what might be expected from the rise in injuries and deaths. The downward movement of the bars roughly mirrors the major rounds of tort reform in Texas through the mid 2000s—although auto accident cases were never a direct target of tort reform legislation. The upward movement in the most recent years came as tort reform fervor waned and accidents increased.

Our last round of Texas plaintiffs’ lawyers research ended before the upturn after 2008, but preliminary work in 2015 found plaintiffs’ lawyers suggesting a variety of possibilities in combination with the possible waning of tort reform. One was an increase in the minimum liability coverage for Texas automobile owners that took effect in 2011. This increase was the second step in a planned program of increasing the required minimum coverage. The first step took effect in 2008. Another possibility points to the economic recovery and higher speed limits. A more specific one points to the oil and gas boom in Texas and its impact on highway safety, and the sense by plaintiffs’ lawyers that juries will side with their clients and award substantial verdicts. Only additional research can sort out these—and other—possibilities.

B. More than Law on the Books: “We Work to Change the Way People Think About Personal Responsibility and Civil Litigation”

In the earlier article we speculated that something else might be affecting auto filings—specifically, the potential influence of an important side of tort reform: the broad political campaign aimed at altering the environment in which civil litigation takes place. Tort reform has always been about more than changing the law on the books. One need only look to the mission statement of the American Tort Reform Association (ATRA): “ATRA’s goal is not just to pass laws. We work to change the way people think about personal responsibility and civil litigation.”

In the words of political scientists William Haltom and Michael McCann, in addition to ATRA’s conventional politicking, its “most central role may be to formulate and reformulate ‘common sense’ regarding torts in particular and civil justice in general. . . . Its mastery of the arts of perception and persuasion has augmented ATRA’s success at conventional politicking by publicizing and popularizing tort reform messages.” ATRA is by no means alone in an effort that goes back at least sixty years. Thomas Burke has observed that “tort reformers have helped to reshape public discourse about litigation, undermining the heroic view of lawyers and lawsuits that has always competed in the American mind with more unsavory images of the legal profession.”

We, and others, have written extensively about the politics of such efforts, and there is no need to repeat our comments here. A few matters, however, are relevant to the discussion in this Article. There is a key, consistent theme—the all too familiar vision of a civil justice system run amok for which “we all pay the price” and in which juries play a major role. For instance, a full-page advertisement titled “Me? I’m Paying for Excessive Jury Awards?” appeared in the March 9, 1953, issue of Life (a mass-circulation magazine). It showed a woman standing at a grocery store checkout, about to take money out of her purse to pay for her purchase. The surprised look on the woman’s face reflects the question in the ad’s title, which is a reminder that the prices paid for goods and services depend on the decisions civil juries make. This ad was part of a series of ads that appeared in the Saturday Evening Post and Life magazine in 1953.

Tort reform refers to proposed changes in the civil justice system that aim to reduce the ability of victims to bring tort litigation or to reduce damages they can receive.

Tort actions are civil common law claims first created in the English commonwealth system as a non-legislative means for compensating wrongs and harm done by one party to another person, property or other protected interests (e.g. physical injury or reputation, under libel and slander laws). Tort reform advocates focus on personal injury common law rules in particular.

In the United States, tort reform is a contentious political issue. US tort reform advocates propose, among other things, procedural limits on the ability to file claims, and capping the awards of damages. Supporters of the existing tort system, including consumer advocates, argue that reformers have misstated the existence of any real factual issue and criticize tort reform as disguised corporate welfare.[1][2]

In Commonwealth countries as well as U.S. states including Texas, Georgia, and California, the losing party must pay court costs of the opposing party.[3]

Some legal scholars propose to replace tort compensation with a social security framework that serves victims without respect to cause or fault. In 1972, New Zealand introduced the first universal no-fault insurance scheme for all accident victims, which provides benefit from the government-run Accident Compensation Corporation without respect to negligence. Its goal is to achieve equality of compensation, while reducing costs of litigation. In the 1970s, Australia[4] and the United Kingdom drew up proposals for similar no-fault schemes[5] but they were later abandoned.

The tort system[edit]

Tort requires those responsible (or "at fault") for harming others to compensate the victims, usually in money.[6] Typical harms can include loss of income (while the person recovers); medical expenses; payment for pain, suffering, or even loss of a body part; or loss of future income (assuming that said loss can be proven to be reasonably likely to occur. See speculative damages).[7]

The classical purpose of tort is to provide full compensation for proved harm. This is known under the Latin phrase restitutio in integrum (restoration to original state). In other words, the idea underpinning the law of tort is that if someone harms someone else, they should make up for it. Compensation should be, in the words of Lord Blackburn in Livingstone v Rawyards Coal Co,

"that sum of money which will put the party who has been injured in the same position as he would have been if he had not sustained the wrong for which he is now getting his compensation or reparation."[8]

Themes of the tort reform debates[edit]

A number of recurrent issues can be identified in the debates about tort reform.

Economic effects[edit]

See also: Insurance, Medical malpractice, and Product liability

The primary criticism of the tort system is economic. Critics decry the cost of compensation payments themselves, especially when they are out of proportion to the damage. Even if it is held that extreme compensation is a worthy goal — litigation is arguably an inefficient method of giving compensation. In Britain, for instance, it has been argued that 85p is spent on litigation for every £1 of compensation paid. In contrast, the social security system costs 8p or 12p for every £1 delivered. This figure is disputed, because there is no easy method for accounting for transaction costs particularly when pre-litigation settlements are considered.[9][10]

Three particular charges are levelled at the tort system, for having distorting economic effects. First, the costs of litigation and compensation payouts raise the cost of insurance. Because most tort claims will be paid from the pockets of insurance, and because the public generally pays into insurance schemes of all kinds, tort reform proponents assert that reducing tort litigation and payouts will benefit everyone who pays for insurance.[11]

Secondly, and related to insurance in countries which do not have universal health care (i.e., national health insurance), the costs of the tort system, and in particular medical malpractice suits, raise the costs of health care. The difficulty in this area is to distinguish between public and private health care providers. In the UK, the cost was £1.6B a year as for 2014, increasing at 10%+ yearly [12] Rising from £446m a year a decade earlier. The UK, however, has exceptionally low claims, as tort claims have been restricted, for instance in disallowing loss of chance cases. The Medical Defence Union actively combats, and attempts to settle all cases where potential negligence claims are at stake. While successful, the costs of litigation to the health system are steadily growing,.[13][14] In the United States, it is easier for victims of medical malpractice to seek compensation through the tort system. The American medical record in hospitals is poor, with around 195,000 deaths due to negligence per year, which itself leads to a higher number of claims.[15] It is open to debate as to whether a change in the law of tort either way would lead to significant reductions in cost or changes in practice. According to Bloomberg Businessweek, "Study after study shows that costs associated with malpractice lawsuits make up 1% to 2% of the nation's $2.5 trillion annual health-care bill and that tort reform would barely make a dent in the total."[16]

Third, there is an argument that tort liability could stunt innovation. This argument usually comes in connection with product liability, which in every developed country is strict liability, subject to a "state of science" defence. If a product is faulty, and injures somebody who has come across it (whether they are the buyer or not) then the manufacturer will be responsible for compensating the victim regardless of whether it can be shown that the manufacturer was at fault. The standard is lower in other injury cases, so that a victim would have to prove that a tortfeasor had been negligent. It can be argued that strict liability deters innovation, because manufacturers could be reluctant to test out new products for fear that they could be subjecting themselves to massive tort claims.[17] This argument is characteristic of the law and economics movement. It may be somewhat confused about the relevant law because it misses the state of science defence. This defence means that a manufacturer can always say "there was no warning or evidence in the scientific literature that this new product could be dangerous."[this quote needs a citation]

Equality in treatment[edit]

See also: Distributive justice and Equality of outcome

Equality of treatment is the central issue for reforms in New Zealand and in the Commonwealth more generally. If someone has an accident then they have a statistical 8% chance of finding a tortfeasor responsible for their injury. If they are lucky enough to have been injured by someone else's fault, then they can get full compensation (if the tortfeaser is not judgment proof). For others—for those injured by natural accidents, by themselves, by disease or by environmental factors; no compensation is available, and the most that can be gained for their losses will be meager state benefits for incapacity.

This was the basis for much of Professor Patrick Atiyah's scholarship as articulated in Accidents, Compensation and the Law (1970). Originally his proposal was the gradual abolition of tort actions, and its replacement with schemes like those for industrial injuries to cover for all illness, disability and disease, whether caused by people or nature. Such a system was developed in New Zealand following recommendations from the Royal Commission in 1967 for 'no fault' compensation scheme (see The Woodhouse Report). Over the 1980s Atiyah's views shifted. He still argued that the tort system should be scrapped. But instead of relying on the state, he argued people should have to take out compulsory first party insurance, like that available for cars, and this model should be spread progressively.[18]

Limits on noneconomic damages[edit]

Main article: Non-economic damages caps

Other tort reform proposals, some of which have been enacted in various states, include placing limits on noneconomic damages and collecting lawsuit claim data from malpractice insurance companies and courts in order to assess any connection between malpractice settlements and premium rates.[19]

Reduction in the statute of limitations of action[edit]

A different reform is not to limit the amount of legitimate recovery, but to reduce the time to sue—the statute of limitations of actions. New York law now requires that:

An action for medical, dental or podiatric malpractice must be commenced within two years and six months of the act, omission or failure complained of or last treatment where there is continuous treatment for the same illness, injury or condition which gave rise to the said act, omission or failure; provided, however, that where the action is based upon the discovery of a foreign object in the body of the patient, the action may be commenced within one year of the date of such discovery or of the date of discovery of facts which would reasonably lead to such discovery, whichever is earlier....

— N.Y. Civil Practice Law and Rules (CPLR) § 214-a.[20]

Punitive awards and juries[edit]

See also: Punitive damages and Jury

Another head of damages that can be awarded is called "punitive damages", or sometimes "exemplary damages". The word "punitive" means punishment and the word "exemplary" implies that damages should "make an example" of the wrongdoer. The purpose of such damages are twofold: to deter wrongful conduct by other actors, and to serve a normative function of expressing social shock or outrage at the defendant's actions.

In most jurisdictions, punitive damages are not available. They are considered contrary to public policy, because the civil justice system in many countries does not have the same procedural protections as the comparable criminal justice system. Therefore, allowing punitive damages would have the effect of punishing actors for wrongful conduct without allowing them the ordinary procedural protections that are present in a criminal trial. The fear is that punitive damages encourage a vindictive, revenge seeking state of mind in the claimant and society more generally. In the UK, Rookes v Barnard[21] limited the situations in which punitive damages can be won in tort actions to where they are expressly authorised by a statute, where a defendant's action is calculated to make profit, or where an official of the state has acted arbitrarily, oppressively or unconstitutionally. In the United States, though rarely awarded in tort cases, punitive damages are available, and are sometimes quite staggering when awarded. For example, in 1999, a Los Angeles County jury awarded $4.8 billion in punitive damages against General Motors to a group of six burn victims whose 1979 Chevrolet Malibu was rear-ended by a drunk driver, causing it to catch fire.[22] That was later reduced to $1.2 billion by the judge.[23]

It is argued by some[who?] that extraordinary damage awards in the United States are a result of the jury system. In federal courts in the United States, the right to a jury trial in most civil cases is entrenched in the Seventh Amendment of the United States Constitution. Many state constitutions have similar clauses to protect the right to a jury trial in state court proceedings. In many countries, particularly in continental Europe, juries are not used at all even in criminal cases due to the cost of protracted trials necessitated with a jury present and confidence in judicial impartiality. In the United Kingdom, juries are available in criminal cases and for tort cases involving defamation, false imprisonment and malicious prosecution. Even in these limited areas of tort there have been growing concerns about the juries' role. In particular, the disparity between awards in defamation cases (which invariably concern celebrities, politicians and the rich) and awards for personal injuries has been growing. Inevitably, the awards rose in a way that a fixed system of damages under judicial scrutiny does not allow. Juries are unseasoned with a daily exposure to tragic accidents in tort litigation. When confronted with their first case they may be shocked and outraged, which inspires a willingness to teach the wrongdoer by a big damages award that "tort does not pay".[24]

Awards for pain and suffering[edit]

Tort compensation easily applies to property damage, where the replacement value is a market price (plus interest), but it is difficult to quantify the injuries to a person's body and mind. There is no market for severed legs or sanity of mind, and so there is no price which a court can readily apply in compensation for the wrong. Some courts have developed scales of damages awards, benchmarks for compensation, which relate to the severity of the injury. For instance, in the United Kingdom, the loss of a thumb is compensated at £18,000, for an arm £72,000, for two arms £150,000, and so on.[25]

Even more difficult to reckon are damages for the pain and suffering of an injury. But while a scale may be consistent, the award itself is arbitrary. Patrick Atiyah has written that one could halve, or double, or triple all the awards and it would still make just as much sense as it does now.[26]

Another likely factor driving up punitive damages are quota litis agreements between lawyers and clients, in which a share of the awarded punitive damage is awarded to the lawyer recovering it, giving the trial lawyer a direct economic incentive in high damages. Such a quota would usually amount to 25% to 30%. Such agreements, while lawful in the US, are considered unethical in the European Union.

Class action lawsuits in the United States[edit]

Mass actions are lawsuits where a group of claimants band together to bring similar claims all at once. Class actions are lawsuits where counsel for one or more claimants bring claims on behalf of similarly situated claimants. These do not exist in most countries, and what will usually happen is that one case will be funded as a "test case", and if judgment falls in the claimants' favour the tortfeasor will settle remaining claims. Class actions are justified on the basis that they ensure equal treatment of similarly situated victims, avoid the risk of conflicting judgments on similar issues, and allow an efficient resolution of a large number of claims. In the US, class actions have been used (and by some views abused) in order to overcome the differences applicable in different jurisdictions, including the perceived predispositions of judges, juries, and differences in substantive or procedural law. So if one claimant lives in State X, where courts and laws are unfavourable to their claim, but another claimant lives in the more favorable jurisdiction of State Y, they may bring a class action together in State Y. Strictly speaking, State Y must not adjudicate the claim unless it is found that the applicable law is similar or identical in both states, but as a practical matter this rule is often disregarded in favor of efficient resolution of claims.[27][dubious– discuss] Another measure particular to the U.S. is the introduction of "proportionate liability", in place of joint and several liability.

Claimed inefficiency of legal system[edit]

According to economist Reed Neil Olsen, "...tort law generally and medical malpractice specifically serve two legitimate purposes. First, the law serves to compensate victims for their losses. Second, the threat of liability serves to deter future accidents." [28] Tort reformers maintain that the present tort system is an expensive and inefficient way to compensate those injured.

According to a 2004 study of medical malpractice costs, "program administration—defense and underwriting costs—accounts for approximately 60 percent of total malpractice costs, and only 50 percent of total malpractice costs are returned to patients. These costs are high even when compared with other tort-based systems, such as automobile litigation or airplane crashes, that determine fault and compensate victims. Moreover, most patients that receive negligent care never receive any compensation. The Harvard Medical Practice Study found that only one malpractice claim was filed for every eight negligent medical injuries." Of the legal changes proposed by tort reformers, this study found that states capping payouts and restricting non-economic damages saw an average decrease of 17.1% in malpractice insurance premiums.[29] However, more recent research provided by the insurance industry to the publication Medical Liability Monitor indicated that medical malpractice insurance rates had declined for four straight years. The decrease was seen in both states that had enacted tort reform and in states that had not, leading actuaries familiar with the data to suggest that patient safety and risk management campaigns had had a more significant effect.[30] Similarly, Klick/Stratman (2005) found that capping economic damages saw an increase in doctors per capita.[31]

There is no guarantee, however, that any savings from tort reform would be efficiently distributed. Tort reform in Texas during the 1990s created $600 million in savings for insurance companies while the fraction of policy dollars needed to cover losses fell from 70.1 cents in losses in 1993 to 58.2 cents in 1998.[32]

Opponents of these liability-limiting measures contend that insurance premiums are only nominally reduced, if at all, in comparison to savings for insurance companies. Further, opponents claim that parties are still being injured at similar or higher rates, due to malpractice not being deterred by tort claims and the attraction of lower quality physicians to "tort reformed" states.

Special medical malpractice courts[edit]

Tort reform advocate Common Good has proposed creating specialized medical courts (similar to distinct tax courts) where medically trained judges would evaluate cases and subsequently render precedent-setting decisions. Proponents believe that giving up jury trials and scheduling noneconomic damages such as pain and suffering would lead to more people being compensated, and to their receiving their money sooner. Critics of the health courts concept contend that it is ill-conceived, that it would be unfair to patients, that it would be unlikely to achieve its objectives, and that much of its goals as are reasonable can be achieved more fairly and with greater efficiency under the existing civil justice system.[33] In addition, experts have suggested that health courts would be inevitably biased towards physicians, and that the bureaucracy needed to introduce safeguards against such bias would negate any cost savings.[34] Still, a number of groups and individuals have supported this proposal.[35]

United States[edit]

In general, tort reform advocates contend that too many of the over 15 million lawsuits filed in the United States each year are "frivolous" lawsuits.[36]

The term "frivolous lawsuit" has acquired a broader rhetorical definition in political debates about tort reform, where it is sometimes used by reform advocates to describe legally non-frivolous tort lawsuits that critics believe are without merit, or award high damage awards relative to actual damages.

Tort reform advocates argue that the present tort system is too expensive, that meritless lawsuits clog up the courts, that per capita tort costs vary significantly from state to state, and that trial attorneys too often receive an overly large percentage of the punitive damages awarded to plaintiffs in tort cases. (The typical contingent fee arrangement provides for the lawyer to retain one-third of any recovery.)[37] A Towers Perrin report indicates that U. S. tort costs were up slightly in 2007, are expected to significantly increase in 2008, and shows trends dating back as far as 1950.[38] More recent research from the same source has found that tort costs as a percentage of GDP dropped between 2001 and 2009, and are now at their lowest level since 1984.[39] High-profile tort cases are often portrayed by the media as the legal system's version of a lottery, where trial lawyers actively seek the magic combination of plaintiff, defendant, judge, and jury. Advocates of tort reform complain of unconstitutional regulation caused by litigation, and that litigation is used to circumvent the legislative process by achieving regulation that Congress is unwilling or unable to pass.

Tort reform is also proposed as one solution to rapidly increasing health care costs in the United States. In a study published in 2005 in the Journal of the American Medical Association, 93% of physicians surveyed reported practicing defensive medicine, or "[altering] clinical behavior because of the threat of malpractice liability." [40] Of physicians surveyed, 43% reported using digital imaging technology in clinically unnecessary circumstances, which includes costly MRIs and CAT scans.[40] Forty-two percent of respondents reported that they had taken steps to restrict their practice in the previous 3 years, including eliminating procedures prone to complications, such as trauma surgery, and avoiding patients who had complex medical problems or were perceived as litigious.[40]

A few of the changes frequently advocated include limits on punitive damages, limits on non-economic damages, limiting the collateral source doctrine, use of court-appointed expert witnesses, elimination of elections for judges, reducing appeal bond requirements for defendants faced with bankruptcy, "venue reform", which limits the jurisdictions within which one can file a lawsuit, limits on contingency fees, the adoption of the English Rule of "loser pays" (the defeated party must pay both the plaintiff's and the defendant's expenses), and requiring that class action lawsuits with nationwide plaintiffs be tried in federal courts, eliminating awards for pre-judgment interest. Many of these measures tend to benefit defendants; others, such as the English rule, sanctions for delay, and early-offer settlement requirements, could have benefits to plaintiffs in some cases.

Not all tort reform supporters support all proposed tort reforms. For example, there is a split over whether the collateral source doctrine should be abolished, and there is a healthy debate over whether it would be beneficial to further restrict the ability of attorneys to charge contingent fees.[41]

Disputed issues[edit]

Critics of tort reform contend that real purpose of the proposed changes is to shield businesses, especially large corporations, from having to pay just compensation to consumers, patients and clients for damages incurred from fraud, negligence, medical malpractice or other legitimate tort claims. They contend that limitations on punitive damages and other restrictions on plaintiff's traditional rights will reduce corporate accountability. Because corporations typically engage in a cost-benefit analysis before considering whether to stop a wrongful action (such as polluting or not enacting proper measures for safety), they contend that corporations will decide that the cost of changing a wrongful practice would be greater than the cost of continuing it, unless there is the chance that the cost of continuing will be made greater by a successful lawsuit. In this view, the prospect of paying a small damage award would have little or no effect in correcting the wrongdoing, and would essentially allow the corporation to continue an unsafe practice unless state or federal regulators interceded.

Tort reform supporters argue that this precisely describes the problem: lawsuits over socially beneficial practices increase the costs of those practices, and thus improperly deter innovation and other economically desirable activity. They further suggest that small businesses are hurt worse by the threat of litigation than large corporations are, because the legal expenses from a single lawsuit can bankrupt a small businessperson.

How would tort reform affect safety?[edit]

Proponents of the existing tort system contend that tort reform advocates exaggerate the costs and ignore the benefits of the current tort system.[42] For example, consumer advocates and legal scholars contend that lawsuits encourage corporations to produce safer products, discourage them from selling dangerous products such as asbestos, and encourage more safe and effective medical practices.[43] Beginning in the early 1980s, Professor Stephen Teret and other faculty at The Johns Hopkins University School of Public Health argued that tort litigation was an important tool for the prevention of injuries.[44] While Teret acknowledged that the primary purpose of tort lawsuits usually is to recover money damages for the injured persons, as compensation for their medical and other costs, he identified several ways that litigation can also enhance safety for everyone, including:

(1) to avoid paying future damages, the creators of dangerous products or conditions may voluntarily make them safer; (2) where conduct is particularly egregious, courts may award punitive damages to deter that conduct in the future; (3) the process of gathering information prior to trial – called 'discovery' – can bring information to light that can be used by policy-makers to create new laws or regulations.

In contrast, a 2006 study by Emory University professors Paul Rubin and Joanna Shepherd argued that tort reform actually saved tens of thousands of lives because "lower expected liability costs result in lower prices, enabling consumers to buy more risk-reducing products such as medicines, safety equipment, and medical services, and as consumers take additional precautions to avoid accidents." They also concluded that "caps on noneconomic damages, a higher evidence standard for punitive damages, product liability reform, and prejudgment interest reform lead to fewer accidental deaths, while reforms to the collateral source rule lead to increased deaths." [45]

Tort reform advocates cite a 1990 study of auto safety improvements by Harvard University professor John D. Graham for a conference at the Brookings Institution found that

The case studies provide little evidence that expanded product liability risk was necessary to achieve the safety improvements that have been made. In the absence of liability risk, the combined effects of consumer demand, regulation, and professional responsibility would have been sufficient to achieve improved safety. In some cases, however, liability seemed to cause safety improvements to occur more quickly than they would have in the absence of liability.

Graham further notes that

there is no evidence that expanded liability for design choices has been a significant cause of the passenger safety improvements witnessed since World War II. Graham concludes by endorsing reform, noting that case studies of the current product liability system "suggest that manufacturers may be inclined to delay design improvements when they fear that improvements will be used against them [in court].[46]

However, design improvements to increase safety cannot be used against manufacturers in court to show that the product was unsafe. Rule 407 of the Federal Rule of Evidence specifically states, "evidence of the subsequent measures is not admissible to prove: negligence; culpable conduct; a defect in a product or its design; or a need for a warning or instruction."[47] This means that evidence of changing the design of a product after an accident cannot be used in court against the manufacturer to prove it is liable for the damage.

It is true, however, that the evidence could be introduced to prove "ownership, control, or the feasibility of precautionary measures." But, a lawyer representing the manufacturer could concede ownership and control, and thus prevent the evidence from being introduced for that purpose. And a lawyer for the manufacturer could seek to prevent the introduction of the evidence to show feasibility of precautionary measures if he/she argued such evidence would violate Rule 403 of the Federal Rules of evidence. Rule 403 bars evidence that is relevant, but overly prejudicial.[48]

Another presenter at the same Brooking Institution conference, Murray Mackay of the University of Birmingham, claimed safety (and other) innovations were inhibited by fear of lawsuits:

[S]trict liability has had a negative influence on innovation. It has held back new designs, consumed resources that might otherwise have been directed at design improvement, and added on costs to the consumer. ... [I]n Western European countries ... liability risks are low and the marketplace pays a premium for innovative technology in safety as well as other areas. As a result, most safety-related advances in recent years have come from European manufacturers and, more recently, from the Japanese. ...[49]

The effect of tort reform on medical outcomes has been studied with mixed results. A 2008 study found worse childbirth outcomes for mothers and infants in states with caps on non-economic damages.[50] The Klick/Stratman paper cited above found several effects of specific tort reforms on infant mortality that lost statistical significance when looked at more closely—that is, correlation with other state-specific factors wiped out apparent increases in mortality from joint and several liability reform but also wiped out apparent decreases in mortality from capping economic damages and restrictions on contingency fees. The only tort reform effect that proved robust was a negative effect of collateral source reform on black infant mortality.[31]

Proponents of tort reform counter by pointing to data from New Zealand, which has abolished its medical tort system but has medical error rates close to those in the United States.[51] Tort reform advocates, including Paul Offit, also argue that litigation has driven from the U.S. marketplace many useful and safe medical advances, including Bendectin (the withdrawal of which has led to a doubling of hospital admissions for morning sickness) and vaccines for Lyme disease and Group B Streptococcal disease, which kills one hundred infants per year.[52]

Frivolous lawsuits[edit]

Under some interpretations of the law, a frivolous lawsuit is one that cannot reasonably be supported under existing legal precedent or under a good-faith argument for a change in the law. However, the term has a broader rhetorical definition; in political debates, "frivolous" is also used to describe tort lawsuits where there is only a remote link between the conduct of the defendant and the injuries alleged by the plaintiff or where the damages sought by the injured plaintiff are perceived to be too high for the injuries sustained. Tort reform advocates also complain about lawsuits that are brought based on purely hypothetical damages where the plaintiffs have suffered no tangible harm whatsoever, or where the harm caused could be traced to elements of excessive negligence or irresponsibility on the part of the claimant.[citation needed] Real or fictional frivolous lawsuits are a popular target of American humor.[53][54] Proponents of tort reform claim that frivolous lawsuits are common, costly, and based on the contingent-fee system of paying lawyers, while critics point out that summary judgments address those issues.[55]

Existing rules, however, regulate the prosecution of "frivolous" lawsuits. Under already existing law in every U.S. jurisdiction, if a defendant or the judge believes that a plaintiff has misrepresented the facts or the law or has brought a “frivolous” pleading, the defendant, or the court on its own initiative, may ask for the action to be thrown out and for the attorney bringing the action to be penalized with a variety of sanctions. For example, Rule 11 of the Federal Rules of Civil Procedure provide in part: "By presenting to the court a pleading, written motion, or other paper--whether by signing, filing, submitting, or later advocating it--an attorney or unrepresented party certifies that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances: . . . (2) the claims, defenses, and other legal contentions are warranted by existing law or by a non-frivolous argument for extending, modifying, or reversing existing law or for establishing new law; [and] (3) the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery." [56][57] If the court decides that the plaintiff has violated this rule, it has wide discretion to sanction the offending party, the party’s attorney or both, including the discretion to dismiss the plaintiff’s claim or claims, order the plaintiff, the plaintiff’s attorney or both to pay money, reprimand the attorney and/or refer the offending attorney to the applicable disciplinary authorities, among other things. Ethical rules also forbid attorneys from filing "frivolous" lawsuits.[58] State courts and bar associations typically publish sanctions imposed on attorneys for violations of these rules. A simple review of these published opinions demonstrates that courts take violations of their pleading and ethical rules seriously.[59][60]

Tort reform in Texas has imposed a requirement in medical malpractice cases that only a physician practicing or teaching in the same specialty as the defendant can serve as an expert witness in the matter. Additionally, a report from that witness showing evidence of negligence must be filed with the court within 120 days of the filing of the case. Failure to do so results in liability for the defendant's legal fees. Filing an action but failing to find a suitable expert or failure to file adequate reports within the time frame provided can result in hardship for a plaintiff who may already be crippled by physical injuries and bankrupted by medical fees.[61]

Regulation through litigation[edit]

Advocates of tort reform also complain of regulation through litigation, the idea that litigation is being used to achieve regulatory ends that advocates would not be able to achieve through the democratic process. For example, Rep. Rick Boucher (D-VA) argued in support of a 2005 federal tort reform that gave immunity to gun manufacturers in certain lawsuits because such lawsuits were "nothing more than thinly veiled attempts to circumvent the legislative process and achieve gun control through litigation"; reform supporters complained that (and the Pentagon supported the bill on the grounds that) the plaintiffs were trying to "sue [gun manufacturers] out of existence" by forcing them to incur $250 million in legal defense expenses, while gun control supporters argued that the legislation took "away the right of victims to be able to have their day in court," that the bill gave unprecedented immunity to a single industry, and claimed that the law was unconstitutional.[62]

Healthcare industry[edit]

Tort reform advocates argue that by limiting the threat of frivolous lawsuits, the medical industry would migrate away from practicing defensive medicine. This would reduce the number of unnecessary tests and procedures, typically performed under patient request, thereby reducing the costs of medical care in general. As an argument against the current system, tort reformers link the rising costs of premiums for physicians' medical malpractice insurance[63] to the rising cost of personal and group policy health insurance coverage. California's Medical Injury Compensation Reform Act has been cited as a model for tort reform in health care.

Others deny that medical malpractice suits play a significant role in the cost of health care. Including legal fees, insurance costs, and payouts, the cost of all US malpractice suits comes to less than one-half of 1 percent of health-care spending.[64] Other recent research suggests that malpractice pressure makes hospitals more efficient, not less so: "The recent focus by the American Medical Association and physicians about the dramatic increases in medical malpractice insurance premiums, and their suggestion of a cap on non-economic damages, deserves a closer look. According to Baicker and Chandra (2004), increases in premiums are not affected by past or present malpractice payments, but may increase due to other unrelated factors. Chandra, Nundy, and Seabury (2005) find that the rising cost of medical services may explain the bulk of the growth of “compensatory awards”. They also find that the greatest ten percent of the malpractice payments have grown at a smaller pace than the average payment for the years 1991 and 2003. This means that the “medical malpractice crisis” is not necessarily fueled by the growth in malpractice payments. Furthermore, malpractice pressure actually forces our hospitals to be technically more efficient. This implies that existence of the medical malpractice system is beneficial, and its strength should not be diluted by either putting caps on non-economic damages or by decreasing the statute of limitations."[65]

There has been a noticeable drop in medical malpractice insurance premiums for physicians in states that have enacted Tort Reform.[citation needed] Particularly ones that capped non-economic damages such as Texas did in 2003. For example, The Doctors Company, a physician-owned medical liability insurer, was insuring OB/GYNs at a mature claims-made rate of $131,601, which was a 20% increase from the previous year. As of 2008, the most an OB/GYN was paying for a liability insurance policy with The Doctors Company was $64,714. States that have not enacted Tort Reform legislation tend to have a higher cost of professional medical liability insurance than states that do.[citation needed]

Opponents of tort reform legislation often reference the story of Frank Cornelius, whose New York Times op-ed piece, “Crushed by My Own Reform,” told of allegedly negligent procedures performed by his physicians. In 1975, Cornelius had fought for damage caps, but he later came to repent of his role in that campaign.

Some say that federal licensing is a better approach and a strong central regulatory body is the answer to deal with negligent physicians who cross state lines.[66]

Controversy over the impact on business[edit]

Some supporters of tort reform posit that reforms can significantly reduce the costs of doing business, thus benefiting consumers and the public in the long run.[citation needed]Harvard Business School professor Michael E. Porter stated: "product liability is so extreme and uncertain as to retard innovation. The legal and regulatory climate places firms in constant jeopardy of costly and ... lengthy product suits. The existing approach goes beyond any reasonable need to protect consumers, as other nations have demonstrated through more pragmatic approaches."[67] A commission by the American Insurance Association and co-authored by Nobel Prize winner Joseph Stiglitz to look at the effects of bankruptcies from asbestos litigation on workers in the asbestos industry; the study estimated that 52,000 jobs were lost.[68]

Critics of the tort reform movement dispute the claim that the current tort system has a significant impact on national or global economies.[citation needed] The Economic Policy Institute wrote that the effect on the economy of job loss resulting from lawsuits is negligible:[69]

In an April 2002 paper, the CEA (President Bush's Council of Economic Advisors) examined the economic impacts of the tort system in somewhat greater depth. But that paper, too, failed to demonstrate any employment effects of the tort system and made no prediction about the impact of tort law change. Even if we assume that asbestos liability legislation could somehow have prevented the loss of 2,500 jobs per year resulting from asbestos-related bankruptcies (by, for example, limiting compensation for non-economic damages to the victims or their survivors, or by denying awards of punitive damages), the effect on overall employment and the national unemployment rate in an economy with more than 130 million payroll jobs would have been imperceptible (a change of less than two-thousandths of 1%).

Critics of tort reform also contend that the real purpose of the proposed changes is to shield businesses, especially large corporations, from having to pay just compensation to consumers, patients and clients for the harm incurred from fraud, negligence, medical malpractice, product liability or other legitimate tort claims.[70]

Specific industry protections[edit]

In response to lawsuits filed against gun manufacturers by several municipalities, a bill was proposed by the U.S. Congress in 2005 that would provide immunity to gun manufacturers for most negligence and product liability actions (and prohibit the Bureau of Alcohol, Tobacco, Firearms, and Explosives from revoking a dealer's license, even in cases where a dealer has been identified as selling a relatively high number of guns subsequently used in violent crimes).[citation needed]

Organizations such as the United States Conference of Mayors oppose gun manufacturer immunity legislation.[71] Others have argued that the legislation took "away the right of victims to be able to have their day in court," that the bill gave unprecedented immunity to a single industry, and that the law was unconstitutional to the extent that it conflicted with the Separation of powers.[72]

Dispute over "litigation explosion" claims[edit]

The American Tort Reform Association (ATRA) claims that "The cost of the U.S. tort system for 2003 was $246 billion, or $845 per citizen or $3,380 for a family of four" and "The Growth of U.S. tort costs have exceeded the Gross Domestic Product (GDP) by 2-3 percentage points in the past 50 years".[73] This claim is based on a 2002 study by Tillinghast-Towers Perrin.[74]

Opponents of tort reform deny that there has been a "litigation explosion" or "liability crisis", and contend that the changes proposed by tort reform advocates are unjustified. Records maintained by the National Center for State Courts show that population-adjusted tort filings declined from 1992 to 2001. The average change in tort filings was a 15% decrease.[75] The Bureau of Justice Statistics, a division of the Department of Justice (DOJ), found that the number of civil trials dropped by 47% between 1992 and 2001.[76] The DOJ also found that the median inflation-adjusted award in all tort cases dropped 56.3% between 1992 and 2001 to $28,000.

Tort reform advocates allege that these numbers are misleading. They claim that most liability costs come from pre-trial settlements, so the number of trials is irrelevant.[citation needed] Supporters further note that the number of "filings" is a misleading statistic, because modern filings are much more likely to be class actions with many more joined claims than the cases of decades ago. They also note that the choice of the 1992 start date is misleading, because the largest increase in the number of tort cases occurred between 1970 and 1992. They also argue that the use of the median, rather than the mean, is a misleading statistic for measuring the magnitude of the litigation problem.[citation needed]

Supporters frequently base their claims of an "explosion" in the costs of tort litigation based on annual studies by Tillinghast/Towers Perrin,[77] a major consultant to the insurance industry. In 2008, Towers Perrin reported that the cost of liability litigation has outpaced the growth of the GDP growth of 9% in estimated annual tort costs between 1951 and 2007 as opposed to a 7% average annual growth in GDP—representing 2.2% of GDP in 2004 vs. just 0.6% in 1950 and 1.3% in 1970.[78][79] More recent research from the same source has found that tort costs as a percentage of GDP dropped between 2001 and 2009, and are now at their lowest level since 1984.[39] The Tillinghast/Towers Perrin study has been criticized by the Economic Policy Institute, a progressive think tank:[69][citation needed] "Although TTP's estimate is widely cited by journalists, politicians, and business lobbyists, it is impossible to know what the company is actually measuring in its calculation of tort costs, and impossible to verify its figures, because TTP will not share its data or its methodology, which it claims are 'proprietary.'" Tort reform supporters claim that the Towers Perrin numbers are underestimates in many ways.[80][81]

Corporate lawsuit abuse[edit]

Tort reform opponents argue that corporations and insurance companies are the worst abusers of the litigation system.[citation needed] In particular, they contend, corporations often use their enormous resources to unfairly delay trial, pursue frivolous appeals, and contest claims in which liability is clear.[citation needed] In response, a number of tort reform supporters argue that that criticism is not a reason to oppose tort reform; such abuse would be deterred by proposed tort reforms such as "loser pays," which would prevent large corporations from using litigation as a cudgel against individuals and small businesses who cannot afford to defend themselves in court by providing an incentive for law firms to provide contingent defense.[citation needed] Opponents of tort reform contend that most private citizens would be afraid to sue wealthy corporations or insurers if they could be bankrupted by an award of the defendant's legal fees if they lost.[citation needed] This would limit legitimate claims, and effectively deny many citizens a forum to redress the harm caused them.[citation needed]

Changing definitions of torts[edit]

Tort reform in Texas changed the definition of negligence in the context of emergency room treatment to include only “willful and wanton” acts. This has been interpreted as including only acts intended to harm the patient.[61]

Hailstorm litigation reform[edit]

In March and April 2012, the Lower Rio Grande Valley in Texas was hit with two severe hailstorms. Texas Monthly wrote, “Windows were shattered. Hail knocked holes in rooftops. Unfortunate animals were beaten to death.” Insurers paid out $556 million in claims to homeowners and $47 million to car owners. After the storms, thousands of lawsuits were filed against insurers and adjusters. The lawsuits were based on allegations of “low-ball payments on claims.” As a reaction, a state senator introduced legislation (Senate Bill 1628) to reform hailstorm litigation.[82]

The bill represented “an almost visceral fight between the insurance industry, Texans for Lawsuit Reform and trial lawyers whose symbolic leader in storm-damage claims in Steve Mostyn of Houston.”[82] By 2014, there had been 2,000 lawsuits filed in Hidalgo County, Texas. “One local attorney had erected a billboard ‘evoking fire and brimstone’ to remind homeowners that they had to file a claim within two years.” According to Texas Monthly, “By May [of 2014], there had been 5,972 lawsuits filed, with Mostyn and members of his firm filing 1,612 of them.”[82] Mostyn “had pioneered” lawsuits for storm damage after Hurricane Ike. He made over $86 million in legal fees.[82]

In February 2017, a bill was introduced in the Texas state Senate that would aim “at ending hailstorm lawsuit abuse.” Texas Lt. Gov. Dan Patrick supported the bill (Senate Bill 10) and said during his State of the State address, “Hailstorm litigation is the newest form of lawsuit abuse.” Patrick said that storm litigation rates had risen dramatically, causing insurance companies to increase premiums and reduce coverage. The bill would still allow hailstorm insurance claimants to sue their insurance company. It would allow plaintiffs to sue for either deceptive trade practices or unfair settlement, but not both. According to SE Texas Record, “The bill also seeks to end barratry in hail litigation, as reports of lawyers employing contractors and insurance adjusters to drum up clients have continued to surface the past several years.” The bill would also prevent plaintiffs from suing their individual insurance agent. An identical bill (HB 1774) was introduced in the Texas House of Representatives.[83]

Debates over individual reforms in the United States[edit]

A number of proposals have been made by advocates of tort reform, although these proposals are not agreed on by all 'tort reformers' and are considered by many opponents a roll-back of the reforms of the twentieth century.[citation needed] The collateral source rule, for example, dates back to 1854.[84]

Non-economic damages caps[edit]

Main article: Non-economic damages caps

Non-economic damages caps place limits on a jury's ability to award damages to victims for pain and suffering and loss of enjoyment of life as well as punitive damages. The purpose of these reforms is to allow for fair compensation for victims while preventing excessive, emotionally driven jury awards from bankrupting entire organizations and leading to job losses and cost increases for consumers.[citation needed]

Proposals to cap non-economic damages are one of the most frequently proposed tort reforms, and have generated controversy over their fairness, efficacy, and constitutionality.[citation needed] Critics complain that limitations on punitive damages and other restrictions on plaintiff's traditional rights will reduce corporate accountability.[citation needed] Because corporations engage in a cost-benefit analysis before considering whether to stop a wrongful action (such as polluting or not enacting proper measures for safety), caps on damages may well encourage corporate malfeasance.[citation needed] They contend that the prospect of paying a small damage award provides too little incentive to correct the wrongdoing, and would allow the corporation to profitably continue an unsafe practice.[citation needed]

For example, tort reform critics point to the story surrounding the Ford Pinto,[85] where accountants determined that the expected payout in wrongful death suits would be less than making a design change to prevent the gas tanks from blowing up on minimum impact. "This cost-benefit analysis" that Ford completed found "that Ford should not make an $11-per-car improvement that would prevent 180 fiery deaths a year," because doing so would be a net cost. (This analysis valued human lives at $200,725 each.)[85] In other words, it was cheaper for Ford to fend off wrongful death lawsuits than to implement the safety improvement. For tort reform critics, the prospect of unpredictably large damage awards would reduce the incentive that companies have to behave in this manner.

Joint and several liability[edit]

Main article: Joint and several liability

Tort reformers have had the most legislative success in limiting the common law rule of joint and several liability, often replacing it with a rule of proportionate liability. Of the forty-six states that had a joint and several liability rule, thirty-three states have abolished or limited the rule.[86] Opponents of tort reform contend that the elimination of the rule would under-compensate people who had the misfortune to be hurt by more than one person, if at least one of the defendants does not have the financial means to pay his or her share of proportionate liability.[citation needed]

Loser pays[edit]

Nearly every Western democracy follows the "English rule," which requires the loser of a civil suit to compensate the winner for his or her attorney's fees.[87] For example, after authors Michael Baigent and Richard Leigh lost their plagiarism litigation over The Da Vinci Code in a British court, they were ordered to pay the defendants' $1.75 million in attorneys' fees.[citation needed]

The "American rule" differs; in most cases, each party bears its own expense of litigation. Supporters of tort reform argue that loser-pays rules are fairer, would compensate winners of lawsuits against the costs of litigation, would deter marginal lawsuits and tactical litigation, and would create proper incentives for litigation, and argue for reforms that would require compensation of winning defendants some or all the time.[88] In federal courts, debate has focused on the scope of Federal Rule of Civil Procedure Rule 11, which sanctions attorneys in some situations for making frivolous filings.[citation needed]

Opponents argue that such rules would have had a chilling effect on civil rights litigation. Proposals to limit frivolous lawsuits have been criticized on the grounds that the restrictions could be used to impede individuals attempting to enforce civil rights laws, according to The Federal Judicial Center's Study of Rule 11.Robert L. Carter, United States District Court Judge for the Southern District of New York, and Rep. Sheila Jackson Lee have both argued that Brown v. Board of Education would have been called frivolous.[89] In response, reform supporters note that victorious civil rights litigation could hardly be deemed "frivolous"; that desegregation was accomplished through legislative, rather than judicial action; and that reform opponents overstate the importance of litigation in the civil rights movement.[90]

Tort reform in US politics[edit]

Tort reform is controversial. George W. Bush made tort reform a centerpiece of his successful run for Texas governor and of his second-term domestic policy agenda. In the 2004 presidential election, Democratic vice presidential nominee John Edwards, a successful trial attorney, was criticized by tort reform advocates for lawsuits that he brought against obstetricians on behalf of children who suffered severe birth injuries; reformers criticized the suits as relying on "junk science", while Edwards denied the allegation.[91]

Republican lobbyist Grover Norquist points out possible political motivations for tort reform, writing in American Spectator

Lawyer jokes from 1900. Top-hatted lawyer to workman falling off scaffolding: "Take this card, my man, and if you're not killed call on me and I'll recover big damages for you."
A trial by jury is unusual in almost all countries for non-criminal cases

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