What Is Tort Reform, Anyway? A User-Friendly Guide.

Collateral Source Rule

Definition:

The quickest way to get a mistrial in a civil case is for a plaintiff to mention or imply that an insurance policy will cover a verdict against the defendant.  Whether or not a defendant is insured has no bearing upon whether the defendant is "guilty," and if so, how much the defendant should pay.  Therefore, evidence of a defendant's insurance status is inadmissible except in very limited circumstances.

In many states, the reverse is true: Whether insurance (or any other source) has paid or will pay for any of the plaintiff's compensatory damages is inadmissible under the collateral source rule.  However, some states have repealed or modified the collateral source rule to do one or both of the following:

1. Require that a verdict against a defendant be reduced by whatever amount that other sources have compensated the plaintiff.
2. Allow the defendant to present evidence to the jury that the plaintiff has been compensated by another source.

The Controversy:

Those who want the collateral source rule modified or repealed claim that plaintiffs get a "double recovery" if the plaintiff's health insurance company and the defendant pay for the same medical bill.  Supporters of the collateral source rule point out that a defendant shouldn't get "let off the hook" because a plaintiff was lucky enough to have insurance. 

Additionally, most insurance companies are subrogated, meaning that the plaintiff will have to reimburse them for their expenses.

For More Information:

The Collateral Source Rule: Helping to Balance the Scales of Justice

The Collateral Source Rule as a Rule of Evidence

Damages

Economic Damages:

Economic damages are damages that you can put a fixed price on.  In car accident cases, economic damages would include such things as: The cost to repair or replace the vehicle, the cost of a rental car, reimbursement for lost wages, and the cost of medical bills.

Noneconomic Damages:

Noneconomic damages are damages you cannot put a fixed price on.  Those include compensation for pain and suffering, paralysis, loss of life, and other physical injuries. 

Compensatory Damages:

Compensatory damages are those designed to compensate a victim for his or her loss.  As such, compensatory damages include both economic and noneconomic damages.  Compensatory damages are the civil law equivalent of restitution to a crime victim.

Punitive or Exemplary Damages:

While compensatory damages are designed to compensate a victim, punitive damages (sometimes called exemplary damages) are designed to punish the defendant.  Punitive damages are the civil law equivalent of a criminal fine.  Juries can only award punitive damages in special cases - they aren't very common.

The Controversy:

The single biggest goal of tort reform  is to put limits on the amount of noneconomic and punitive damages that juries may award.

Tortfeasor

A tortfeasor is one who commits a tort.

Plaintiffs & Defendants

A plaintiff is the person or entity that files a lawsuit.  A defendant is the person or entity being sued.

Statute of Limitations

Definition:

One of the principles our legal system was founded upon was that if an individual wants the court's help, that individual should seek it in a timely manner.  To make sure that people do seek the court's help in a timely manner, laws called statutes of limitation have been enacted.  They limit the amount of time in which an individual may file a lawsuit.

In many states, personal injury lawsuits have a two-year statute of limitations.  That means that if you were injured in a car accident on 01/01/2005, you would have to sue on or before 01/01/2007.  If you didn't sue by that date, you wouldn't be able to sue.  Or, as lawyers say, your suit would be barred by the statute of limitations.

In the case of a car accident, it's easy to determine when a person was injured - the date of the accident.  But sometimes, like medical malpractice cases, a plaintiff doesn't know they were injured until a later date.  A good example would be if a doctor left a surgical instrument inside a patient, and the patient didn't discover it until months or years later.  In cases like that, the statute of limitations is "tolled" by something called "the discovery rule."  In our fictional case, the statute of limitations would most likely begin to run on the date that the patient discovered the doctor left a surgical instrument inside of them.  But even then, there are limits - some states won't let you sue for malpractice after 3 years from the date of the malpractice, no matter when you found the surgical instrument.

Don't rely upon anything on the Internet - including this site - in determining when your own statute of limitations is up.  Contact a lawyer.

Pros:

Statutes of limitations encourage people to sue when memories are fresh and prevent doctors from worrying about being sued for procedures they may have performed 10 years ago.

Cons:

Some people, such as those who are misdiagnosed, may not learn of malpractice until it's too late for them to sue.  Crooked defendants may try and negotiate with a plaintiff until the statute of limitations has expired and the plaintiff can no longer sue.  When a suit is barred by the statute of limitations, some sarcastic lawyers say the plaintiff is "SOL," Statute Of Limitations'ed.

Controversy:

Statutes of limitations from state to state range from 1 to 10 years.  Consumer advocates argue that 1 year is too short, while tort reformers feel that the shorter a statute of limitations is, the better. 

For More Information:

Statutes of Limitations By State

Statutes of Limitations at Wikipedia

Contingency Fees / Contingent Fees

Definition:

Plaintiffs usually can't afford to hire lawyers on an hourly-basis, so they enter into a contingency-fee agreement.  What that means is that instead of a set fee, the plaintiff's lawyer will receive a percentage of whatever money he or she is able to obtain for the plaintiff. 

In almost all contingency-fee agreements, the lawyer will pay for all case expenses from his or her own pocket.  If the lawyer loses the case, the plaintiff doesn't owe the attorney these expenses. 

Common contingency fees are anywhere from 25% to 50%, depending upon the complexity of the case.  Lawyers may not legally charge contingency fees in criminal cases, and are discouraged from charging them in family law cases.

Pros:

Contingency fee agreements allow plaintiffs with no money to hire a lawyer they wouldn't otherwise be able to afford.  With contingency fee agreements, lawyers are motivated to get their client's as much money as possible, in as little time as possible.

Cons:

Sometimes, a lawyer will receive a large fee for a case in which he or she performed very little work.  Conversely, lawyers will often invest a great deal of time and their own money into a case, only to lose and not get paid anything.

Controversy:

Some tort reformers want to eliminate contingency fees entirely, while others want to reduce the percentage that lawyers may charge.  Supporters of contingency fees argue that if contingency fees were reduced or eliminated, lawyers wouldn't take on complicated cases.

For More Information:

The Myth of the Frivolous Lawsuit

Contingent Fees and Tort Reform: A Reassessment And Reality Check

A Plaintiff Lawyer's Perspective On Contingency Fees

Quick Facts About The Contingent Fee System

Structured Settlements (Periodic Payments)

Definition:

Normally, a plaintiff that wins a monetary award is entitled to collect the entire amount awarded as a lump sum.  Some states, however, permit or require structured settlements; Instead of receiving one lump-sum payment, the award is paid out over many years.  This is a similar concept to state lotteries that allow you to choose a cash option or get yearly payments.

Pros:

Smaller defendants won't have to sell off their assets to pay a large jury award in one lump sum.  Plaintiffs can't squander their entire award, leaving them unable to pay for future medical expenses.

Cons:

Plaintiffs with a great deal of immediate expenses, like medical bills, may be unable to pay them in a timely manner.  In some cases, if the plaintiff dies before the payments end, the defendant gets to pocket the money instead of paying it to the plaintiff's family.

Controversy:

Tort reform advocates claim that structured settlements will keep small businesses from going under if they're hit with a large jury verdict.  Others point out that lengthy structured settlement plans are inherently unfair to people with short or diminished life expectancies.

For More Information:

Have It Your Way (PDF File)

Structured Settlements: What Attorneys Need To Learn...

Statute of Repose

Definition:

Statutes of repose are most commonly enacted to protect manufacturers of products, engineers, and architects.  They set fixed limits for how long certain parties may be held liable for defects in something they designed, built, manufactured, or sold. 

If a state enacted a 10 year statute of repose for architects, that would mean that the architect couldn't be sued for designing a dangerous building more than 10 years after it was built - even if it collapsed and killed people due to the architect's error.

Pros:

Statutes of repose prevent manufactuers and others from being sued for something that was built, designed, or manufactured many years ago.

Cons:

Statutes of repose are often used to protect manufacturers of products that can fail catastrophically, such as aircraft components, nuclear reactor components, and dangerous industrial machinery.

Controversy:

Most manufacturers support shortening existing statutes of repose, and creating new ones for new products.  Some asbestos-related lawsuits have been barred by statutes of repose, even though the victim didn't develop cancer until years after the statute of repose expired. 

See Also:

Statute of Limitations

For More Information:

Statutes of Repose: Eroding Protection Against Older Products

In a Word: Define With Care (PDF File)

Intentional Tort

Definition:

Most tort cases involve negligence, that is, that a defendant unintentionally did something that hurt a plaintiff.  An intentional tort, as you may surmise, is when the defendant purposely hurt a plaintiff.  The best example of an intentional tort is battery.

The Controversy:

Few insurance policies cover intentional torts such as battery.  Here's a real-life example: A 90-year-old woman was forcibly restrained in a wheelchair at a nursing home, and an orderly punched the woman several times in the face, breaking several bones and putting her in the hospital. 

The only way the nursing home's insurance policy would cover this incident is if the plaintiff proved that the nursing home was negligent in hiring, supervising, or retaining this orderly.  Otherwise, the insurance policy wouldn't cover a jury verdict, and for all practical intents and purposes, that meant the family would get little or no money because nursing homes generally don't have many assets.

For More Information:

University of Miami Law School Torts Outline

Negligence

Definition:

In short, negligence is the basis of almost all personal injury lawsuits, (But see Strict Liability and Intentional Tort) including medical malpractice, automobile accidents, and defective products.  In each of those cases, a plaintiff needs to prove (among other things) that the defendant either did something a "reasonable person" wouldn't do, or didn't do something a reasonable person would do in similar circumstances.

The definition and application of negligence and the reasonable person standard varies from state to state, but one thing that doesn't vary is the fact that a plaintiff has to prove a defendant was negligent before he or she can win any money.  The negligence standard takes into consideration that sometimes bad things just happen.

In a product liabilty case, for example, it could be undisputed that the plaintiff used a product and was severely injured by the product.  But if the jury doesn't believe the defendant was negligent in designing, building, or selling the product, the defendant wouldn't owe the plaintiff any money - no matter how badly the plaintiff was hurt by the defendant's product.

Pros:

The negligence standard means that in most cases, a defendant has to have done something "wrong" in order to owe a plaintiff any money.

Cons:

Sometimes, plaintiffs who are injured through no fault of their own aren't entitled to even get their medical bills paid, because the defendant didn't do anything wrong, either.

The Controversy:

The controversy over the negligence standard isn't fought in the political arena, but in the courthouses of America every day.  Most injury cases aren't decided upon whether or how badly the plaintiff was hurt, but whether the plaintiff's injuries were caused by the defendant's negligence.  Only if the defendant's negligence was the cause of the plaintiff's injuries do juries determine how much money, if any, to award the plaintiff.

For More Information:

Alternative Rules of Determining Tort Liability: Negligence

Prudence, Benevolence, and Negligence: Virtue Ethics and Tort Law