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Study Shows Tort Reform Has No Correlation To Reduced Liability Costs

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The Insurance Journal carried an interesting article recently highlighting a new study on tort reform that was performed by a business-backed institute. What did this study show? According to our good friends at the American Association for Justice (AAJ), the study proves that tort reform simply does not work. AAJ’s CEO Jon Haber was quoted in the article saying that the state rankings recently released by the Pacific Research Institute (PRI) clearly show that there is no connection or correlation between tort reform and liability costs.

What is tort reform? In simple English, it refers to laws that are meant to reduce liability costs through limits on various kinds of damages awarded to plaintiffs. It is part of an effort by state lawmakers to change legal procedures to prevent lawsuit abuse and to make liability insurance more affordable. Tort reform includes revising the laws that determine responsibility for damages and reducing the amount of punitive damages that civil actions can seek.

Now, it is interesting that PRI, which calls itself as an outfit advancing “free market policy solutions” has found that Colorado, which ranks first in tort reforms laws, ranks eighth highest in terms of costs. On the other hand, New Mexico ranks 44th in tort reform laws, but it has the sixth lowest costs, the study shows.

Also, the states most hurt by these costs are the wealthiest, the PRI study states. Haber says, the big oil, pharmaceutical and tobacco companies – such as Exxon Mobil and Phillip Morris – “are corporate wrongdoers who have spent millions to destroy the civil justice system using groups such as Pacific Research Institute.” But the irony here is that PRI’s new study actually agrees with independent experts including our friends at AAJ – that tort reform does not work.

Haber points out that these results were unavoidable even if PRI’s methodology is probably flawed and its intent biased. Cited in the study’s footnotes are the American Tort Reform Association and itself, both funded by the culprit corporate giants who don’t want to stand by their products and want consumers to pay for mistakes manufacturers make. So-called tort reform benefits no one and hands the short end of the stick to the average, hard-working American. It is an excuse for these big guys to avoid accountability in the courtroom and hide the fact that they always put profits before people.

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  • Anthony Randall

    I was in an accident in Hawaii. I was awarded about 200,000 but only actuality received 35,000 in all because of tort reform. Here it is 2008 and after two spinal fusions and having to give up my career I still have pain everyday and cant live on the little bit of SSI I get.

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