The Reality of Tort Reform

The Reality of Tort Reform:  Insurance Industry's Effort to Bail Itself Out

By: John A. Houghton

Tort reform is a constant reality for victim’s lawyers practicing in jurisdictions where these draconian measures have been passed.


The most frequent ‘tort reform’ effort by the business lobby is state legislation intended to ‘cap’ or put a ceiling on the amount of damages a claimant can recover.  Caps on damages do not prevent lawsuits, and the vast majority of civil filings are actually commercial business disputes.  Interestingly, most lobbying efforts target only caps on non-economic damages in tort cases (quality of life, pain and suffering, punitive damages). Notably, the lobby does not pursue similar caps in the context of business or contract dispute litigation, which makes up the majority of civil filings in every jurisdiction in this country.


‘Tort/negligence’ lawsuits account for only 6% of all civil filings since 1991. (Rand Institute study)  Personal injury lawsuits account for only 1.3% of all civil dispositions.  Only 2 out of 10 injury claims nationwide actually file a lawsuit.

Tort reform is a chamber of commerce scheme supported by billions of dollars from the insurance industry to effectively skirt it’s legal obligation to pay claims and protect their policyholders.  Lawsuits are driven by the insurance industry’s refusal to pay pre-litigation claims and actually protect their policyholder’s assets.  Instead, insurers frequently put substandard offers on the table in response to demands, and roll the dice with their policyholder’s assets by inviting litigation. Reasonable pre-suit negotiations and demand acceptance prevent lawsuits. 


So-called ‘frivolous lawsuits’ are not economical, as every jurisdiction in this country already has innumerable costly requirements for a plaintiff to file a lawsuit, get service on the defendant, prove liability and prove damages or risk getting their case dismissed.  Actual cases with no basis in fact or law are subject to dismissal with attorney’s fees and litigation costs assessed against the party bringing the action.


Be vigilant in opposing these ‘tort reform’ efforts, and contact your state representative to let them know you want the corridors of civil justice to remain open for all.