Tort reform legislation developed as a response to a series of insurance crises and reactions that blamed the personal injury compensation system for those problems. Since measures of tort reform have been adopted, many researchers have analyzed their effects within and beyond the legal system, assessing how they affect damages, insurance claims, health costs, and physician supply.
Our study analyzes an underdeveloped area of research: the effect of tort reform on the filing of cases in court. Using two databases of state court filing data over 12 years, we examine how a damages cap for medical negligence claims affects case filings in the years immediately after its adoption. With several test states, we find that when a state adopts med mal damages caps, there is a statistically significant drop of 23 percent in med mal filings. We confirm this effect by also measuring the effect of a cap's nullification, and find that in the aftermath of a cap's removal case filings increase by 29 percent. Our work can therefore confirm and quantify the effect of damages caps on case filing.
Yet the finding is much more salient when we consider it in the context of a new and interesting study published in the Journal of Empirical Legal Studies. In their 2013 study, Myungho Paik, Bernard Black, and David Hyman found that filings of med mal torts have decreased in the last decade, not only in tort reform states but also in states without it! If so, our finding of a statistically significant drop in med mal filings in response to tort reform has a "doubling-down" effect: there is one reduction in filings due to tort reform, and also a background reduction in filings based on larger, non-statutory changes.
We believe that our findings regarding the effect of tort reform on med mal filings and the "doubling-down" effect significantly modify the cost-benefit analysis of tort reform. The positive impacts of tort reform have been significantly oversold, and the effects of tort reform disproportionately impact certain vulnerable citizens. If so, we believe that claimants are being doubly squeezed without significant public benefit. We therefore suggest that state legislators reconsider these efforts, or risk court intervention due to equal protection challenges.
Scott DeVito & Andrew W. Jurs,
"Doubling-Down" for Defendants: The Pernicious Effects of Tort Reform,
Dick. L. Rev.
Available at: https://ideas.dickinsonlaw.psu.edu/dlra/vol118/iss3/3