WINTER 2003/2004

The Truth About "Tort Reform"

The rhetoric from tort reform advocates has been steadily increasing. Recently some Missouri legislators introduced a bill seeking almost every tort reform measure possible.

The "Big Lie" that is being perpetuated by tort reformers is that the tort reform will result in lower insurance premiums. The Center for Justice and Democracy (an independent, non­profit, non-partisan, consumer rights organization) has conducted a comprehensive study of tort reform measures and the resulting impact on insurance premiums. Their findings include the following:

In Mississippi, where a contentious medical malpractice "tort reform" battle was waged during the summer of 2002, Medial Assurance Co. of Mississippi notified doctors that it would raise its rates by 45 percent in 2003 "regardless of the special session outcome" since "tort reform" does not provide a magical "silver-bullet" that will immediately affect medical malpractice insurance rates.

In New Jersey, at a June 3, 2002, meeting of the New Jersey Assembly Joint Committees of Banking & Insurance and Health & Human Services on Medical Malpractice, Assemblyman Paul D'Amato asked Patricia Costanta, chairman and CEO of the MIIX Group of Insurance Companies, whether if the state passes caps on damages, he would promise not to raise premiums and will reduce them. Her response: "No we're not telling them [insureds] that."

In Nevada, lawmakers were subjected to a nasty campaign by insurers and organized medicine during the summer of 2002, including the deliberate closing of trauma centers, in order to strong-arm the legislature into enacting severe caps on medical malpractice compensation. Insurance groups fought any attempt to add a provision to guarantee lower rates should the legislation pass. Within weeks of the law's enactment, two major insurance companies proclaimed that they would not reduce insurance rates.

Insurers now say that they are "waiting to see" if the cap will be upheld constitutionally, as many state constitutions prohibit caps since they directly interfer[e] with the right to jury trial, the right to a remedy, equal protection and/or separation of powers.

Such excuses are nothing more than a convenient cover for one undeniable fact: Insurers have never lowered rates as a consequence of "tort reform" because such measures are based on an untrue premise: that the legal system, rather than the underwriting practices of the insurance industry, is responsible for gyrations in the cost and availability of insurance.

The Last Insurance Crisis - "Tort Reform" Had No Impact

As with every insurance cycle, eventually rates will stabilize and availability will improve around the country, irrespective of tort law restrictions enacted in particular states.

This is precisely what happened after the last insurance "crisis" of the mid-1980s. By the late 1980s, rates stabilized and stayed flat for 17 years in every state. In 1991, for example, Washington state's insurance commissioner Dick Marquardt concluded in a report that it was "impossible to at­tribute stable insurance rates to tort-law changes or the damages cap," since rates also improved in states that did not pass tort reform. "Health Care Reform" Bush's insurance cap plan a proven failure,- The Seattle Times, May 16, 1991.

Premium Deceit - the Failure of "Tort Reform" to Cut Insurance Prices found no correlation between "tort reform" and insurance rates. In 1999, The Center for Justice & Democracy released Premium Deceit - the Failure of "Tort Reform" to Cut Insurance Prices. This study was the first-ever, and remains the only, comprehensive look at property/casualty insurance price rates in every state in the nation since the mid-1980s. Its actuarial analysis was conducted by J. Robert Hunter, who discovered that "[d]espite years of claims by insurance companies that rates would go down following enactment of tort reform, we found that tort law limits enacted since the mid-1980s have not lowered insurance rates in the ensuing years."

"States with little or no tort law restrictions have experienced approximately the same changes in insurance rates at those states that have enacted severs restrictions on victims' rights." In other words, laws that restrict the rights of injured consumers to go to court do not produce lower insurance costs or rates and insurance companies that claim they do are severely misleading this country's lawmakers.

The American Tort Reform Associations and the American Insurance Association have supported Premium Deceit's conclusions. When commenting on Premium Deceit, spokespeople for national "tort reform" organizations, agreed with Premium Deceit's conclusions in the following published statements:

"Recent Investigative News Stories"

Charleston Gazette, September 18, 2002: "The more information that comes in the harder it seems to diagnose the cause of West Virginia's medical malpractice crisis. For one thing, there does not appear to be a malpractice crisis, but rather an insurance crisis." 'Malpractice state pay­outs are low' Charleston Gazette, September 18, 2002.

Charleston Daily Mail, September 13, 2002: West Virginia's settlements and verdicts averaged about $183,000 each, placing the state among the bottom half of the 50 states and the District of Columbia. State doctors also made smaller malpractice malpractice pay outs than their counter­parts in three of eight states the American Medical Association considers 'good' states, or those not experiencing a medical malpractice insurance crisis.

Daytona Daily News, September 17, 2002: "Only the figures from insurance companies themselves came close to justifying big in­creases in medical malpractice insurance that obstetricians, among others, say could force them out of business. There was no evidence that 'grasping attorneys and scheming patients,' as one doctor put it, were having much success. Instead, the numbers indicate that limit on non-economic damages sought by the doctors - and by businesses in general - would have little impact."

Sun Herald (Biloxi, Miss.) August 11, 2002: "Claims that doctors are leaving the state en masse aren't sup­ported by data from the state Board of Medical Licensure, or even information provided reluctantly by the state Medical Association"; "Mississippi's insurance rates are no higher than many other states, including some with caps on damages"; "Mississippi remains below the national average for personal injury awards, medical malpractice awards and claims per doctor"; and "Mississippi Medical Association could not provide specific data to support its claims against the legal system."

Los Angeles Times, August 3, 2002: “California’s law, and damage caps in particular, should not be viewed as a panacea for other states, says Cheye Calvo of the National Center for State Courts. Physicians in Massachusetts and Montana, which have damage caps, haven’t avoided large rate increases, he said. At the same time, doctors in Minnesota, which doesn't have a cap, aren't having problems.”

The “Big Lie” has come to Illinois and Missouri. Tort reformers are already at work in the legislature and in the media spreading their propaganda. We need to set the record straight. If an article or letter to the editor appears in your local newspaper calling for tort reform, respond to it and rebut the “Big Lie.”

Gavin Law Firm Welcomes New Attorney

We are pleased to announce the addition of a new attorney to our firm. Rachel Lewis recently graduated from Southern Illinois University - Carbondale School of Law. Ms. Lewis is licensed to practice in Illinois and is a welcome addition to our firm. She will be practicing in the areas of personal injury and workers' compensation.

U.S. Supreme Court gives Boost to Asbestos Claim

The U.S. Supreme Court ruled 5-4 that railway workers suffering from asbestosis should also be able to recover damages for fear of asbestos-related cancer. In a separate section of the ruling in Norfolk & Western Railway Co. v. Ayers, the court unanimously agreed that railroads can be held completely liable for work related asbestos claims even if other companies or causes contributed to the disease. (ATLA Law NEws Digest - March 13, 2003)

Some Experiencing Buckle Problems on Child Safety Seats

The National Highway Traffic Safety Administration, Washington, DC, recently warned consumers to watch for problems with child seats equipped with recessed buckles built into the seat between the child's legs.

The buckles in these seats can easily collect particles of food, drink, dirt, sand or other materials that may interfere with the buckle. Consumers may have difficulty latching and unlatching dirty buckles. In some cases the material may cause a "false latch" if the user mistakenly believes that the buckle is securely latched when it is not.

To ensure that the child is securely fastened in the car seat, the user should always check that the buckle is fully latched every time the seat is used. To do this, insert the latch plate fully into the buckle; listen for a click; tug firmly on the harness webbing to make sure the buckle is latched. For more information, visit www.nhtsa.dot.gov or call the Auto Safety Hotline at 888-327-4236. (Family Safety & Health, Summer 2003)

Ford Punished for Hiding Evidence/Settles Suit

Ford Motor Co. has settled a lawsuit, before going to trial, over the safety of its 15-passenger vans for an undisclosed amount. Last month, a federal judge ordered Ford Motor to turn over safety data on its 15-Passenger vans, information the company said doesn't exist. The court fined the automaker for concealing evidence. Ford is accused of hiding evidence in a a case involving the deaths of two passengers in one of the large vans when it flippeed on a Kentucky highway in 1996.

The Us. District Judge said he would inform the jury at trial that Ford's own records apparently showed the 15 passenger vans were not reasonably safe or stable and said Ford's condut in hiding evidence "almost borders on criminal." (Chicago Tribune - February 22, 2003)

NHTSA Chief Warns of SUV Safety

Jeffrey W. Runge, head of the National Highway Traffic Safety Ad­ministration, warned the auto industry that occupants of SUVs involved in a rollover accident are three times more likely to die than occupants of passenger vans. He said SUV rollover accidents account for only 3 percent of the nation's motor vehicle accident but cause nearly one-third of the nation's auto fatalities. Runge said the high center of gravity on SUVs makes them particularly susceptible to fatal rollovers and urged the manufactures to make them safer. (Liability & Insurance Week - January 20, 2003)

Government Report: Playsets Pose Cancer Risk

Scientists at the Consumer Product Safety Commission said that children playing on millions of outdoor wood playground sets face an increased risk of bladder and lung cancer from arsenic exposure. The report recommends that children wash their hands after playing on wooden playground sets and also not eat in the vicinity of the wood. The report is the first acknowledgment by the federal government that there are health risks associated with pesticide-treated wood that has been in wide use in residential settings such as playgrounds and decks since the 1970s. Since the 1930s, residential wood has commonly been treated with a pesticide, known as chromated copper arsenate, or C.C.A., to prevent rotting. This pesticide contains arsenic, a known car­cinogen, which bleeds from the wood. (ATLA Law News Digest © February 13, 2003)

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