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Ryan R. Bradley
Ryan R. Bradley
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Tort Reform Part Two: Who Really Wants It?


In Part One of our Tort Reform discussion we learned about the facts underlying tort reform.  Now that we have the basics, let’s dig into to who really wants Tort Reform, and why they want it.  Some of the parties involved might surprise you.

  1. Insurance Companies: Insurance companies make their profits off the investment of their premiums.  In other words, insurance companies can only satisfy their stakeholders and shareholders by collecting premiums, and not paying claims.  Consequently, it is in the best interest of the insurance industry to make it as difficult as possible for those who are actually insured to recovery money for their claims.  This makes sense because just like any business, insurance companies need to maintain high profits, and low expenses in order to survive.  Just like other investment operations, insurance companies bet on the market using the premium money that they collect.  Sometimes the insurance companies do well in their investments, sometimes they do not.  This behavior results in a sort of “cycle” between period of “feast” and “famine” for the insurance companies and directly impact the prices that doctors and other professionals and business pay for coverage.  Thus, Insurance company profits are to blame for the sharp ups and downs in insurance rates and not the jury verdicts which tort reformers are so quick to blame. The Congressional Budget Office found that even if extreme tort reforms were to be enacted, the savings would only be 0.5% of all health care costs–a fact that insurance company lobbyists are reluctant to admit.
  2. Lobbying Firms: Over the last thirty or so years, there has been a massive spike in insurance companies and other groups such as the Chamber of Commerce turning to lobbyists to promote their agenda.  In the case of tot reform, this fact is even more apparent.  Now that President Trump and the Republican-controlled Congress has set their sights on repealing and replacing Obamacare, insurance companies and other interest groups intent on snuffing out litigation are funneling huge amounts of money to lobbying firms.  It is not surprising then that the insurance industry spent a staggering $147 million on lobbying in 2016 alone with this number expected to rise in 2017.  Tort reform lobbying groups are big winners when it comes to this cyclical debate and have a vested interest in keeping the debate alive.  Additionally, lobbying groups that advocate for tort reform reach far beyond simply advocating for new legislation at the state and federal levels, they also have a hand in shifting the way American citizens vote.  In Texas for example, where tort reform has made significant strides particularly in the medical malpractice arena, emails that were uncovered from the powerful Texans for Lawsuit Reform show that the group was actually involved in the redistricting of voter districts thus not only influencing legislation, but how citizens vote.  When you follow the money, lobbying firms are the big winners when it comes to tort reform.
  3. The Uninformed: The group that throws the most support behind tort reform of all varieties is the uninformed.  Tort reform is a complicated issue that stretched far beyond simply “curbing lawsuit abuse.”  Yet, the insurance industry, political actions committees (PAC’s) and lobbying firms continually try to sway the American voter into believing that civil lawsuits in America are crippling doctor and business and that they must be stopped.  This is the classic “hot coffee” argument (although this case was actually far from frivolous)  which has become the drum upon which proponents of tort reform love to beat.  This is why a solid understanding of the facts is so important in the tort reform discussion.  It is vital for the American public to understand that our entire justice system is built upon the fact that the only way to recover from the negligence or irresponsible acts of others is through monetary compensation in the court system.  There is simply no other option.  This is especially true since forms of alternative dispute resolution such as mediation and arbitration are frequently applied in favor of the guilty party.

Now that we have discovered which players are truly behind the tort reform push, in Part Three of this series, let’s look at some resources and services which are available to all of us to take action against irresponsible tort reform while at the same time keeping the court system fair and just.

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