Tort reform has recently become a controversial issue in the legal arena. Tort reform commonly refers to laws passed on a state-by-state basis which place limits or caps on the type or amount of damages that may be awarded in personal injury lawsuits. Those who advocate tort reform argue that limitations or caps need to be placed on damages able to be recovered in lawsuits because excessive damage awards create an oppressive tax on the cost of doing business. Advocates of tort reform attribute high costs of certain products or services to be due in part to litigation costs. Those opposed to tort reform argue that such cap or limits on damages are arbitrary and that damages need to be assessed on a case-by case basis because a blanket approach is unfair to severely injured plaintiffs. Opponents also argue that tort reform measures won't prevent insurance rate hikes. Other issues raided in tort reform legislation include contingent fees, venue-shopping, certification of class actions, and other areas viewed as subject to abuses in the legal process.
In February 2005 Congress approved a class action reform measure. The legislation authorizes federal courts to hear class-action suits involving over $5 million and involving persons or companies from different states. The aim of the legislation is to make it more difficult for the lawsuits to be approved. The bill would also seeks to end settlements" in which plaintiffs get little but their lawyers get big fees. It would link lawyers' fees to the amount of recovered by plaintiffs.
The following is an example of a state tort reform statute:
- " In any action for injury whether in contract or in tort against a health care provider based on a breach of the standard of care, the injured plaintiff and spouse upon proper proof may be entitled to recover noneconomic losses to compensate for pain, suffering, inconvenience, physical impairment, disfigurement, loss of consortium, and other nonpecuniary damage.
- In no action shall the amount of recovery for noneconomic losses, including punitive damages, either to the injured plaintiff, the plaintiff's spouse, or other lawful dependents or any of them together exceed the sum of $400,000. Plaintiff shall not seek recovery in any amount greater than the amounts described herein for noneconomic losses. During the trial of any action neither the court nor any party shall advise or infer to the jury that it may not return an award for noneconomic losses in excess of an amount specified herein; in the event the jury is so advised or such inference is made, the trial court, upon motion of an opposing party, shall immediately declare a mistrial. Any verdict returned which includes an award for noneconomic losses in an amount greater than that permitted herein shall be reduced by the trial court to an amount which will include an award of noneconomic losses no greater than that permitted herein or to such lesser sums as the trial court deems appropriate in accordance with prevailing standards for reducing excessive verdicts."