The Tort Crisis is Overblown and Bears Little Resemblance to Actual Research

In the May 17, 2005 issue of the Insurance Journal, the authors report that

"there is no credible evidence to link the tort system to the economic ills its critics claim or to the benefits they argue would be produced by altering it."
In support of this statement, IJ cites a new study conducted by the Economic Policy Institute (EPI), called "The Frivolous Case for Tort Law Change." According to the EPI report, the cost estimates supporting the claims used by proponents of tort reform are "wildly overstated", and "completely inconsistent with the claim that higher legal costs have hurt the economy."


Major supporters of tort reform, including President Bush, frequently rely upon reports prepared by Tillinghast-Towers Perrin, a consulting firm for the insurance industry, to argue in favor of limiting lawsuits. One author of the EPI report, Lawrence Chimerine refutes the validity of the Tillinghast reports:

"The insurance consultants have spun a few high-profile but unrepresentative incidents into a horror story that is almost entirely unsupported by the facts. It is cobbled together out of gross exaggerations, shreds of fact plucked out of context and 'secret' data that cannot be examined by anyone but them. The result is a mishmash that bears little resemblance to actual research."

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Congressional Budget Office Report Says Tort Reform Does Little to Decrease Healthcare Costs

On January 8, 2004, the Congressional Budget Office, the CBO, issued a report relating to the limitation of tort liability for medical malpractice. In this report, the CBO establishes that tort reform will do little to decrease overall healthcare costs.

The CBO report notes that cyclical patterns in the insurance market and lower investment income have played major roles in the recent rise in malpractice insurance premiums. "Insurance companies' investment yields have been lower for the past few years, putting pressure on premiums to make up the difference. According to the General Accounting Office (GAO), annual investment returns for the nation's 15 largest malpractice insurers dropped by an average of 1.6 percentage points from 2000-2002."

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Medical Malpractice is Not a Factor in High U.S. Healthcare Costs

According to a study published in the July/August edition of the magazine "Health Affairs," Americans pay more for healthcare than people in other countries. The study reports that for the year 2002, patients in America paid an average of $5,267 per person for healthcare. This staggering number was more than 52% higher than any other industrialized country.

The study further reports that contrary to political rhetoric and popular belief, malpractice lawsuits have very little impact on the costs Americans pay for their healthcare. In fact, the costs associated with medical malpractice account for less than 1% of the spending on healthcare. Even so called "defensive" medicine, where doctors run more tests to avoid the possiblity of being sued accounted for no more than 9% of the spending.

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