Tort Reform legislation is an attempt by Congress to modify and supplant an individual's rights and recoveries under tort law. Legislators want to control aggregate costs of tort liability for certain industries, professions, and activities by imposing new statutes of limitations, imposing caps on damages awards and modifying the rules of evidence.
The challenge of Tort Reform is on Constitutional grounds. Tort Reform exceeds the scope of Congress' enumerated powers. Tort Reform is a direct attack on the Due Process Clause of the 5th Amendment, the Equal Protection Clause of the 14th Amendment and the jury trial guarantees of the 7th Amendment of the United States Constitution. Further, it directly violates the State Constitution's "Right to Remedy" provisions.
The rationale for Tort Reform has been the notion that by reducing the aggregate levels of liability attaching to a particular activity, profession or industry will make these things more profitable and will thereby contribute to overall economic soundness and social welfare. There is no evidence to support the theory that reducing aggregate liability payouts will in any way improve the state of affairs of the nation or the economy.
Tort Reform is a reactionary pathology affecting interest group lobbyists and politicians in favor of big business. However, Tort Reform fails to recognize the rights and welfare of the victims of torts. The victims of civil torts are injured, disabled, disfigured and sometimes killed as a result of the negligence of another person or company. Tort Reformers propose that victims and their families are not or should not be entitled to compensation for their injuries because it causes some economic crisis. Insurance companies claim that for every liability payout they are forced to increase their premiums thereby affecting the overall economy.
The insurance industry is a big business with a huge profit margin. The insurance industry reports income of $61 Million dollars in a single year. Insurance companies profit by investing your premiums for their own profit. Since, with various types of insurance premiums are usually charged many years before they have to pay out any claims, the insurance company has ample time to make significant investment returns on your premiums. Insurance companies want to collect your high premiums and keep them for their own profits. Insurance companies propose to profit from your premiums and their investment of those premiums by suggesting and supporting Tort Reform. The truth is, if Tort Reform were to go into effect the insurance industry will not decrease your premiums. These premiums bolster their bottom line. In essence, Tort Reform would amount to paying for a service, such as insurance coverage, without ever being allowed to use the service.
Tort Reform is not about cutting costs, improving the economy or increasing overall social welfare, it is about making big business big money by blocking the victims of negligence from recovering under tort law.