Bush s agenda on tort reform

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Bush’s Agenda on Tort Reform

Sonia Ramos González Álvaro Luna Yerga
Facultad de Derecho Universitat Pompeu Fabra

266

CORNELL LAW SCHOOL, ITHACA, NEW YORK, FEBRUARY 2005

InDret 01/05

Sonia Ramos y Álvaro Luna

Abstract

According to the Bush Administration (www.whitehouse.gov), the U.S. tort system isexpensive (the U.S. spends over $230 billions a year on tort lawsuits), economically distorting (the costs of litigation per person in the U.S. are far higher than in any other major industrialized nation in the world; litigation costs small businesses, on average, about $150,000 per year) and inefficient (over half of the compensation is eaten up by litigation costs). President Bush supports enactmentof medical liability reform, class action liability reform, and asbestos litigation reform to curb the costs of lawsuits in the American legal system.

Summary

1. Medical Liability 2. Class Action Lawsuits 3. Asbestos Litigation

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InDret 01/05

Sonia Ramos y Álvaro Luna

Tort reform is a priority issue in the second term of the Bush Administration, as he remarked at the 2004Republican National Convention on September 2, 2004. Bush’s agenda on tort reform focuses on three major issues: 1. Medical Liability Medical liability reform has motivated a sharp division between several groups of interest. On one hand, doctors, health care providers and insurance companies support Bush’s agenda on tort reform, whereas, on the other hand, victims and trial lawyers are against it. 2.Class Action Lawsuits The same sharp division can be seen on class action lawsuit reform, where corporations support it and victims, trial lawyers, public interest organizations, and even state and federal judges are against it. 3. Asbestos Litigation Similarly, asbestos litigation reform is strongly supported by asbestos-related companies and insurance companies, while trial lawyers and victims arethe leading opponents. Bush proposals, as well as its advantages and objections, can only be explained in the context of the current U.S. tort system. Many tort cases are decided by juries which tend to grant larger awards than courts do. Furthermore, punitive damages can be imposed under proper circumstances to punish defendants for wilfully malicious wrongful acts that go beyond merenegligence, thus resulting in even larger awards. Trial lawyers are paid on a contingency fee basis. The judiciary system is decentralized and divided into state and federal courts, which may lead parties to abuse the rules of jurisdiction and forum shopping. The insurance industry is a powerful agent in the U.S. health care system. Patients can only access health care by buying health insurance (accordingto the American Trial Lawyers Association, ATLA, 43 million Americans do not have any health insurance); doctors and health care providers buy malpractice insurance to face their eventual liabilities. Therefore, insurers decide whether patients get the tests and treatment they need, how doctors practice medicine, how much doctors are paid for their services, and decide how much doctors pay formedical malpractice insurance.

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InDret 01/05

Sonia Ramos y Álvaro Luna

1. Medical Liability
«There is too many lawsuits around this country that are driving too many good doctors out of practice, that are driving up the cost of medicine. The cost of practicing defensive medicine in order to stay out of the courthouse or to defend -- to provide the defense necessary in case of afrivolous lawsuit is costing you $28 billion a year at the federal level. And it's a problem. And I look forward to working with Congress to solve this medical liability issue.» George W. Bush, Clinton (Michigan), January 7, 2004.

Bush links medical liability reform to the improvement of the quality of health care. To that end, medical malpractice liability reform seeks increasing access to health...
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