NCPA - National Center for Policy Analysis

THE EFFECTS OF TORT REFORM

October 14, 2005

Between 1981 and 2000, state tort reform measures have resulted in 14,222 fewer accidental deaths, according to Paul Rubin, economics and law professor at Emory University.

Rubin and coauthor Joanna Shepherd examined 141 state tort reforms over time, comparing death rates before and after the measures took effect. They found:

  • Caps on noneconomic damages reduced the average annual death rate by 3.9 percent, saving about 5,349 lives.
  • Caps in product liability cases reduced the average annual death rate by 3.2 percent, saving 12,026 lives.
  • Laws requiring higher evidence for awarding punitive damages resulted in 2.5 percent fewer annual deaths, or 10,331 lives saved.
  • Limiting or capping prejudgment interest reduced the annual death rate by 4.8 percent, saving 7,471 lives.

Critics of tort reform say that damage caps and other measures would induce injurers to take fewer precautions. However, the expansion of tort law can increase the cost of goods and services, says Rubin. As a result, consumers may not purchase goods and services that actually help reduce risk.

Another explanation is that states with tort reform attract more emergency room physicians, hence potentially saving more lives.

Source: Paul H. Rubin, "Tort Reform Saves Lives," Wall Street Journal, October 8, 2005; Paul H. Rubin and Joanna M. Shepherd, "Tort Reform and Accidental Deaths," Emory Law and Economics Research Paper No. 05-17, August 10, 2005.

For WSJ text (subscription required):

http://online.wsj.com/article/SB112873085838663424.html

For study abstract:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=781424

 

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