(Legal) Climate Change
By INVESTOR'S BUSINESS DAILY | Posted Tuesday, May 13, 2008 4:20 PM PT
Tort Reform: Three years ago, Missouri capped the damages a jury can award in a malpractice suit. The result has been a significant decrease in claims against doctors — and fewer of them leaving the state.
Read More: Judges & Courts
Before the legislation, Missouri was considered by the American Medical Association a malpractice crisis state. Its litigious climate caused insurers to increase malpractice premiums. Many doctors, fed up with the climbing costs of doing business, left the state to practice elsewhere.
If not for the farsighted leadership of some of the state's elected officials, that would likely still be the case today.
But in 2005, Republican Gov. Matt Blunt signed a bill that capped punitive damages in liability cases to either $500,000 or five times the net amount of the judgment awarded to the plaintiff, whichever is greater. Noneconomic damages are limited to $350,000.
While doctors' insurance premiums have not decreased as fast as they rose, malpractice claims against them fell immediately. From 2005 to 2006 (data from 2007 is not yet available), they decreased 61%. It seems a lot of trial lawyers and potential plaintiffs looking for an easy payout decided that their allegations weren't meritorious enough to take to court.
Before the system was reformed, Missouri was a target-rich environment for trial lawyers filing medical malpractice suits. Insane though it might seem, they could literally sue anyone on the plaintiff's hospital floor, from doctors to therapists to assistants, who came into contact with the plaintiff. Now liability can be assigned only to defendants who are 51% or more at fault.
Personal injury lawyers are, of course, critical of the caps. They say they cheat those who are genuine victims of medical malpractice.
Yet they are universally unable to see the harm their industry has done to patients through abusive suits and the pursuit of colossal jury awards. The exodus of doctors due to soaring malpractice premiums is not unique to Missouri. New York, West Virginia, New Jersey, Pennsylvania and North Carolina have all seen doctors leave for more agreeable legal climates. The beneficiaries are the patients in states — such as Texas, which took in 3,000 new doctors last year — where policymakers have clamped down on runaway damages and consequently provided their constituents greater choice in health care.
The trial bar has only itself to blame for the trend of states placing caps on damages. If it had disciplined the lawyers who abused the system rather than encouraged them, there might have never been a need for lawmakers to limit damages.
