Tort Reform

Wednesday, December 18, 2002

I’m listening to another report about the tort reform bill that will be brought up in the Texas State Legislature. Both the Texas House and Texas Senate are now dominated by the Republican party — for the first time in quite a while. Anyway, the tort reform would, amongst other things, limit the amount that could be awarded in a personal injury lawsuit to… $250,000. Please correct me if I’m wrong, but as I understand it, under this new law: If you eat a tainted Tylenol that makes you go blind, the most you could receive from the company is $250,000 — even if the company knew of the problem in advance and could have prevented it. Or, if your tires come apart and your truck flips, severing your spinal cord at the third vertebra, the most you could receive from the company is $250,000 — even if they knew of the problem in advance and could have prevented it.

Please, let me know if I’ve got this totally wrong. I couldn’t find a news article about this on the web — I’m reporting from an NPR article that aired a couple of minutes ago. (And from information that’s been in my mind from various sources.) Sounds like the law would also limit the amount trial lawyers could receive for their services in such a case.

Anyway. Before having any opinion about tort reform, read this. It’s a link to information about the McDonald’s coffee-scalding case, in which a woman was awarded $640,000 for spilling coffee on herself. You’ve heard of it, no doubt. The case seems to always come up as an example of why tort reform is necessary, usually with several million reported as the amount of money awarded. But when you have a few more of the facts, it seems much more rational.

What this info about the McDonald’s coffee case — which I have read about in greater depth before — hints at, is that when a jury gives someone hundreds of thousands of dollars (or millions) for some (seemingly) minor transgression on the part of a company, the larger part of that amount is punative. (Compensatory = Compensation for injury, like hospital care, restitution for lost work, et al. Punative = Penalty money. Since you can’t jail a company, you hit them where it hurts — the ledger.) The company knew of a problem and had a chance ot fix it, but didn’t. Someone got injured. Now the company must pay much more for negligence to (hopefully) persuade them (and other organizations) from hurting people in the future. It’s the same reason you jail someone for robbing a store. If I had to offer a change, it would be to require a portion of any punative settlement to go into public coffers. That would, I think, offset some of the (seemingly valid) complaints that such expensive lawsuits force us all to pay more money in taxes and for goods.

There will always be problems with our judicial system. Frivolous lawsuits will sometimes occur just as egregious miscarriages of justice passed in favor of large corporations will sometimes occur. And while improvements should be made, the government should always err on the side of the less powerful party — the individual, in the case of tort reform. In my experience, those with more powerful tend to screw over those with less power more often than the other way around. The less powerful are the ones more likely to require the assistance of the courts to attain justice.

Anyway. Remember this?

Here is another good link from the Association of Trial Lawyers of America site.

And this site, despite the charged title, has some interesting resources. It’s clearly looking at the issue from one side, though.