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Wednesday, February 16, 2005

Legislating by sob story

USAction.org is committed to fighting malpractice lawsuit reform. They display stories of people who have suffered because of egregious doctor errors, such as "Ian's Story." I agree that it's terrible for someone like Ian to suffer.

However, let me put it bluntly. Legislating by sob story is a lousy idea.

Let's say that 0.5% of medical malpractice lawsuits are for legitimate claims, where the doctor clearly erred. Then, 99.5% of lawsuits are frivolous, "John Edwards specials" with lawyers trying to make a quick buck from a quick out-of-court settlement. If this is the true distribution, then though every Ian is a tragedy, the system is clearly broken.

Obviously, the percentages aren't like that, but it's clear that there are a significant number of lawsuits that shouldn't be filed, and a significant number of outrageous jury awards.

Let me throw out one compromise: Enact caps on jury awards for pain and suffering, but allow judges to override the limits in cases when larger awards are warranted.

Right now, some juries feel like they have to give something to the plaintiff, because the plaintiff is hurt, even if the defendant is not liable, or not liable to the tune of $4.3 million. They can rationalize it away, saying that insurance will pay for it. But that's a terrible way to run a legal system.

I'll toss out my other suggested reforms:
  • Punitive damages go to the government, not the plaintiff or his or her lawyer. These awards serve to punish the culprit, not enrich the victim, so the government should collect these fees.
  • Most importantly, have a loser's-lawyer-pays provision. Now, it is to someone's economic advantage to settle out of court, rather than face huge legal bills and the possibility of an adverse award from a big-hearted jury. If an innocent defendant could collect from the plaintiff's lawyers for his or her legal fees, then this economic disconnect would be corrected, and there would be reason to fight off frivolous claims.

Wouldn't that last provision hurt lawyers? Oh, no. Their insurance would pay. You see, actuaries would price malpractice insurance for lawyers. I'm sure they'd set fair prices. *evil grin*

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