NCPA - National Center for Policy Analysis

Tort Reform Would Make a Difference

December 18, 2003

Congress has left town for the year, its unfinished business most conspicuous in the Senate, where tort reform legislation has been tangled up, says Investor's Business Daily (IBD).

According to President Bush in his news conference Monday, the senators failed to pass "good tort reform."

The benefits of tort reform legislation, Bush added, "would have made a difference in terms of a pro-growth environment."

Indeed it would. Tort costs are staggering:

  • They surged from $205 billion in 2001, according to the American Tort Reform Association, to $233 billion last year, an increase of nearly 14 percent.
  • The actuarial firm of Tillinghast-Towers Perrin reports in a new study that tort costs hit each American for $809 a year; by 2005, the report projects that the cost could exceed $1,000 per person.

The Senate could have put some sane limits on medical liability lawsuits that are sending the cost of health care ever higher. It could have done something about the contingency fees that give plaintiffs incentive to sue and tie up courts and drain private- and public-sector resources for every conceivable harm, no matter how trivial, notes IBD.

Congress' upper chamber could have even put some reasonable limits on class-action suits, as the House did, to relieve the system of some of the abuse it endures. But it didn't, says IBD.

Meanwhile, tort costs have grown over three decades at an average rate of more than 9 percent annually -- faster than the U.S. population ( 1.1 percent a year), the consumer price index (5 percent a year) and the economy over that period, says IBD.

Source: Editorial, "Any Tort In A Storm," Investor's Business Daily, December 18, 2003.


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