Bush makes tort reform a priority
President Bush boosted hopes of US tort reform last week when he staged a series of events putting the case for limitations on lawsuits. He kicked off the week on 5 January when he visited southern Illinois' Madison County, dubbed by the American Tort Reform Association (ATRA) as the No 1 "judicial hellhole" in the US.
His target was the soaring cost of liability insurance, which, he said, is preventing doctors - especially those in high risk specialties, such as obstetrics – from working.
At an address at the Gateway Convention Center he said: “What I’m here to do is say as clearly as I can — the United States Congress needs to pass real medical liability reform this year.”
And he described how increased tort costs were hampering doctors in their work. “Many of the costs we are talking about don’t start in an examining room or an operating room, they start in a courtroom,” he said. “There is a constant risk of being hit by a massive jury award, so doctors end up paying tens of thousands or even hundreds of thousands to settle a medical claim out of court even when they know they have done nothing wrong.”
“Lawyers are filing baseless suits against hospitals and doctors, that’s just a plain fact. They are doing it for a simple reason — they know the medical liability system is tilted in their favour,” he added.
On 7 January, he increased the pressure with a visit to the town of Clinton in Michigan State, calling on Congress to pass legislation that would end litigation by asbestos victims that he said has bankrupted 70 US companies.
“We want a court system that's fair,'' Bush was quoted as saying at an event attended by small business owners and asbestos victims' families. “I intend to help by keeping this issue on the front burner.''
He said he wanted Congress to establish a $140bn trust fund to compensate victims of asbestos exposure. Companies and their insurers would donate the money. Under the measure, victims of cancer and other diseases caused by asbestos would be paid a set amount of money if they could prove their illness was caused by exposure to asbestos.
Critics, however, point out that such legislation would limit consumer protection.
The Senate Judiciary Committee is scheduled to hold a hearing on the measure tomorrow (11 January), with Senate Republicans attempting to overcome Democratic opposition to the measure.
Earlier in the month, Bush reaffirmed that reform of the civil justice system would be one of the top priorities of his second term. At a White House press conference he said that he expected Congress "to pass meaningful liability reform on asbestos, class action and medical liability" within the year.
Bush’s tort reform pitch:
Bush’s tort reform agenda has three main strands. First, he aims to limit the amount of money victims of medical malpractice can win for such "non-economic" damages as pain and suffering. A suggested cap is $250,000.
Second, he hopes to restrict the degree to which lawyers can corral large groups of people to sue a company over a harmful product in class action lawsuits. His solution is to move more cases into the federal court where rules are tighter and consolidation of claims is easier.
Third, he is pushing for curbs on lawsuits against makers and sellers of asbestos-filled products. The proposed alternative is for asbestos compensation to be handled not in litigation but through a trust fund established by Congress and funded by the industries facing lawsuits.
Tort reform has been on the agenda since President Bush won his first term in 2000. Since then, however, the momentum for change has faltered.
Earlier this year, analysts at Morgan Stanley said things may once more be on track – after Senate Majority Leader Bill Frist highlighted the need for class action reform in his opening remarks to the Senate for 2005.
This means a bill could be brought to the Senate floor in early February, said Morgan Stanley analysts.
“The likelihood of tort reform is already reflected in [insurance companies’] valuations – at least to some degree. It has been our view that federal class action reform and medical malpractice reform could be the ‘low hanging fruit’ that is actually passed in 2005,” they added.