We kinda feel like Eliza Doolittle today. (The character - not the pop singer.) Who knew that one day, our scrappy little blog would blossom into a source for a new, impeccably researched academic study called “The empirical effects of tort reform,” written by Cornell Law School Professor Theodore Eisenberg, one of the “foremost authorities on the use of empirical analysis in legal scholarship.” (The article will soon make it into the Research Handbook On The Economics Of Torts (Jennifer Arlen, ed.))
The article focuses on “three central objects of tort reform: punitive damages, medical malpractice, and products liability.” There’s so much good and useful stuff in here that we’ve decided to go a little long with our post today. Here goes (and see if you can find us!):
The Business Community Promotes Myths about the Tort System.
“Through advertising and propagation of incomplete or distorted information, interest groups such as the U.S. Chamber of Commerce and the American Medical Association obscure the status of both the legal system and primary actors’ behavior.”
A Good Example of this Distortion Concerns Punitive Damages.
Business groups often mention punitive damages as an area of concern (e.g., U.S. Chamber of Commerce 2008) and punitive damages have been perceived as so problematical as to lead the Supreme Court to impose constitutional limits, using controversial substantive due process principles, as well as federal statutory limits (BMW of North America, Inc. v. Gore; State Farm Mut. Auto. Ins. Co. v. Campbell; Exxon Shipping Co. v. Baker).
But, “[t]he attention punitive damages receives is disproportionate to their real world impact.” Specifically, “[t]he rate at which punitive damages are awarded has been stable over time… No study shows punitive damages being systematically awarded in inappropriate cases.” Also, “[a] central question is whether caps on punitive damages or Supreme Court decisions have affected the punitive-compensatory relation.” The available evidence says “no.”
And here’s where we come in – we’ll just give you the whole, fascinating paragraph:
The absence of change in the punitive-compensatory relation is consistent with a punitive damages crisis having been largely a social construct of entities like the U.S. Chamber of Commerce. The construct was reinforced by understandable media emphasis on large awards and further fueled by experimental research, never reconciled with realworld data (Eisenberg et al. 2002), funded by ExxonMobil Corporation (Sunstein et al. 2002) to mitigate Exxon’s liability related to the 1989 Exxon Valdez oil spill. It is consistent with the U.S. Supreme Court’s recognition that claims of out-of-control punitive damages have been exaggerated (Exxon Shipping Co. v. Baker 2008). And it is consistent with the reaction of the U.S. Chamber of Commerce when its survey of state court systems was shown to be inaccurate with respect to punitive damages (Eisenberg 2009). Rather than fix its survey, or admit that prior results were misleading, the Chamber stopped asking its respondents about punitive damages (U.S. Chamber of Commerce 2010). The Chamber’s questionable behavior prompted the extraordinary response of a judiciary defending itself against unsupported characterizations (PRNewswire 2010; The Pop Tort 2010).
Moving onto medical malpractice. There’s a lot here, but we’ll just pull out a few interesting tidbits:
Patient Safety is Already Suffering Because Too Few Patients Sue.
One possible factor contributing to the continued high rate of errors is that doctors do not expect to bear the full cost of harms caused by their negligence. Studies of medical error consistently find that the vast majority of patients injured by medical error do not file a claim (Weiler et al. 1993; Sloan et al. 1995; Andrews, 2006). Those that do sue often do not recover. Beyond this, hospitals do not bear the full costs of the harms caused in them even though hospitals directly and indirectly influence patients’ risk of medical error (Mello et al. (2007)).
There Ain’t No “Lawsuit Lottery” in Medical Malpractice Cases. Actually, this is really no surprise. As we have noted, even Victor Schwartz, General Counsel of the American Tort Reform Association, admits this. But the empirical studies also show, “[t]he overwhelming evidence is that the legal system’s disposition of medical malpractice claims is strongly associated with the quality of medical care. Claims of a lawsuit lottery are unsupported.”
Also noted is how those who argue that the system is flooded with frivolous lawsuits deceptively interchange the terms “claims” and “lawsuits” to try to make their case:
Thus, misleading impressions about the medical malpractice system, such as the AMA’s statement that “75 percent of medical liability claims are closed without a payment to the plaintiff” (AMA 2006) depend wholly on failing to distinguish between weak cases, which tend not receive payment, and strong cases, which every study shows to receive payment at a higher rate than that suggested by the AMA. Distinguishing between the two groups of studies is important because a claim presented to an insurer is not the same as a lawsuit. And claims against multiple defendants may lead to recovery from only one, leaving three claims without a payment but an incident with evidence of negligence.
Business and Medical Lobbies Could Care Less About the Continuing Drop in Med Mal Lawsuits.
Yet campaigns for medical malpractice reform persist in states with declining filings (e.g., New York Senate Bill 2011). And the Pacific Research Institute, a freemarket group, ranks Connecticut as 38th in a medical-tort index ranking states, New York as 43rd, Oregon as 39th, and Rhode Island as 49th (Graham 2010). As noted, however, NCSC data show a decade-long decline in malpractice filings in each of these states. Connecticut filings declined by 30 percent, New York filings by 1 percent, Oregon filings by 42 percent, and Rhode Island filings by 34 percent.
“Tort Reform” Interferes With Patient Safety Incentives.
Evidence suggests that greater savings to hospitals and insurers can be achieved not at the expense of patient victims. … Caps that reduce premiums by brute force likely discourage more painstaking but socially desirable efforts to improve safety.
“Tort Reforms” Actually Lead to An Increase in Claims “Severity.”
The effect of caps and other reforms may help explain increasing awards in medical malpractice cases that reach trial. The number of lawsuits decreases, as suggested by NCSC filing data, but caps require attorneys to be more selective about the cases they accept. …This greater selectivity and need for greater damages to accept a case likely contribute to the increasing observed mean and median medical malpractice awards in cases that do reach trial. Garber et al. (2009) used a survey of 965 plaintiffs’ attorneys to assess whether noneconomic damages caps and attorney fee limits affected access to justice for medical malpractice victims. They concluded that caps and fee limits make it harder to retain counsel.
“Tort Reform” Provides Little in the Way of Health Care Savings.
One recent summary concludes that the “accumulation of recent evidence finding zero or small effects suggests that it is time for policymakers to abandon the hope that tort reform can be a major element in healthcare cost control” (Paik 2012, 175).
There is No Link Between C-Sections and Liability.
On balance, the available evidence does not support a consistent association between liability pressure and increased cesarean rates. Increased cesarean rates can be attributable to factors other than liability pressure and studies with reasonable control groups of physicians without liability pressure tend not to find an association.
There is No Link Between Liability Premiums and Access to Care.
If increasing premiums drive exit decisions, then programs alleviating premiums should have effects. But Smits et al. (2009) surveyed all obstetrical care providers in Oregon in 2002 and 2006. Cost of malpractice premiums was the most frequently cited reason for stopping maternity care. An Oregon subsidy program for rural physicians pays 80 percent of the professional liability premium for an ob/gyn and 60 percent of the premium for a family or general practitioner. Receiving a malpractice subsidy was not associated with continuing maternity services by rural physicians. Subsidized physicians were as likely as nonsubsidized physicians to report plans to stop providing maternity care services. And physician concerns in Oregon should be interpreted in light of the NCSC finding, described above, that this was a period of substantial decline of Oregon medical malpractice lawsuit filings.
Medical Education Must Address the Brainwashing of Doctors. (This is truly of my favorite findings.)
A bizarre aspect of the medical malpractice reform debate is the recognition that doctors grossly misperceive the system, accompanied by recommendations to change the system to cater to their misimpressions. Rather than educate doctors about reality, one reads of proposals to change the system to cater to physicians’ misperceptions (Hermer and Brody 2010). It seems preferable to include a reasonable medical education requirement focusing on how the legal system operates in medical malpractice cases rather than to curtail the current liability system that is widely recognized as underenforcing standard-of-care norms.
Business Group Propaganda is Polluting the Product Liability Issue. Some fascinating findings here.
Some branches of science are so distorted by interest-group research and socially constructed knowledge that the actual safety and efficacy of products can be difficult to prove, hampering objective assessment of both the products liability system and of changes in it. While misuse of scientific evidence by plaintiffs can occur in product liability cases (In re Silica Products Liability Litigation 2005), the pharmaceutical (DeAngelis 2000; Drummond 1999), energy (Sunstein et al. 2002), asbestos (Egilman et al. 2003), tobacco (Glantz et al. 1996), welding rod (Morris 2008), and other industries suppress some research and fund other research, sometimes without attribution of funding, that can be misleading or incomplete....
Both states that enacted reforms during 1979-1989 and states that enacted no reform during that period had significant declines in plaintiff success rates during the period. Tort reform efforts, including social construction of knowledge, likely adversely affected plaintiffs even in states that did not enact reforms (Eisenberg and Henderson 1992, 776). Tort reform efforts, such as anti-liability publicity campaigns, thus may be more important than reforms themselves.
There’s Little Question that Product Liability Promotes Deterrence of Unsafe Products.
Non-experimental evidence relating to corporate behavior reasonably consistently suggests that products liability law deters. … Qualitative assessment of individual industries also suggests that products liability promotes safety. Although fear of market reaction to poor products likely dominates liability pressure, liability risk often is cited as enhancing safety.
Finally, Read This:
Liability considerations were a sufficient condition or a contributing factor to at least fourteen important auto safety improvements, including inadvertent vehicle movement, fuel tank design, occupant restraints, and all-terrain vehicle restrictions. The chemical industry is reported to have made significant safety improvements as a result of liability exposure. Ashford and Stone (1991) found that liability pressure stimulated the development of safer products and processes and spurred technological innovations that reduced chemical hazard risks (367-68). They conclude that tort reforms are misplaced because significant under deterrence existed. Johnson (1991, 452) concludes, “The claim that the product liability system unduly compromises the chemical industry is not well supported by the evidence.” Pharmaceutical company attorneys credit liability pressure for safety improvements. One company attorney regarded the liability crisis as largely a myth. “I believe––though it’s heretical––that the liability crisis is largely a myth when one looks at the available information such as the actual number of cases” (Swazey 1991, 297). This industry attorney concluded that tort reform proposals exceed what may be needed to address flaws in the system.
I think we rest our case. Have a happy holiday weekend!