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Q: alternatives to putting a cap on punishment in tort? ( Answered 5 out of 5 stars,   0 Comments )
Subject: alternatives to putting a cap on punishment in tort?
Category: Relationships and Society > Law
Asked by: adrianubc-ga
List Price: $5.00
Posted: 11 Nov 2004 13:22 PST
Expires: 11 Dec 2004 13:22 PST
Question ID: 427701
what are the alternatives to putting a cap on the amout of award in
tort (which is the tort reform that the US government and Canadian
goverments have been talking for a while)? If possible, can anyone
also provide some (unusual) advantages and disadvantages of putting a
cap? (Hope to get the answer today)
Subject: Re: alternatives to putting a cap on punishment in tort?
Answered By: expertlaw-ga on 11 Nov 2004 15:12 PST
Rated:5 out of 5 stars
Dear adrianubc,

Your first question, "what are the alternatives to putting a cap on
the amout of award in tort", covers a great deal of territory. There
are many other "reforms" which could be implemented, including:

* Loser Pays: The loser of the law firm pays part or all of the
prevailing party's legal fees and costs;

* Modified Loser Pays: Depending upon additional factors (e.g., the
result of a court ordered mediation or evaluation of the merits of the
case, or on the basis of a settlement offer), a party may have to pay
part or all of the other party's legal fees and costs;

* Reserving Damages Issues to the Judge: Rather than having a jury
assess damages, the damages award is determined by the judge. (This is
not always possible, particularly in the U.S. where certain jury trial
rights exist in the Federal Constitution and some state

* Elimination of the "Collateral Source Rule": Traditionally, a
defendant in a tort case is often prevented from getting a credit for
other monies the plaintiff receives as the result of an injury, for
example insurance benefits, on the basis that the defendant should not
benefit from the plaintiff's good planning and investment in
insurance. At the same time, if this credit is not given to the
defendant, the plaintiff may arguably be overcompensated for the
injury after collecting compensation from multiple sources. This rule
has been modified or eliminated in many contexts.

* Prescreening for Merit: Requiring cases to be reviewed for merit,
either by a private expert or by a publicly appointed expert or panel,
before they can proceed into litigation. Only a case deemed
potentially meritorious would be permitted to proceed.

Your second question asks about "(unusual) advantages and
disadvantages of putting a cap" into effect.

I am not sure if this is sufficiently unusual, but the most compelling
reason not to cap damages is that caps have their greatest effect on
the most meritorious cases, where damages are most severe. They have
absolutely no effect on "frivolous" cases, which will either be
dismissed or settled at a level far below the cap. The Foundation for
Taxpayer and Consumer Rights describes this effect in an article,
summarizing the findings of a Rand study on damages caps in

Rand Study: California Patients Killed or Maimed by Malpractice Lose
Most Under Damage Caps (July 13, 2004), The Foundation for Taxpayer
and Consumer Rights

The Association of Trial Lawyers of America puts this into personal
terms, providing some real life examples of how caps have affected
injured people:
Fact Sheet: Who Pays For Caps, Association of Trial Lawyers of America

The advantage of the cap, at least from an insurance company's
perspective, is that it is easier to create actuarial tables and
project potential future liabilities when any given potential
liability cannot exceed a fixed figure. That is, it makes life easier
for insurance companies. However, there is no indication that
insurance companies have any significant difficulty projecting
liability and assessing premiums even in the absence of caps.

The other advantage, from the perspective of the insured (e.g., a
doctor buying malpractice insurance) is that the caps will supposedly
make insurance more affordable and will reduce annual rate increases.
The actual figures, though, are mixed, with the experience in some
states (e.g., Michigan, which has had malpractice damages caps in
place for almost twenty years) having comparatively high insurance
rates for "high risk" medical specialties despite the existence of
caps. Similarly, some states where caps have recently been
implemented, such as Nevada, have seen little to no associated
decrease - or even an increase - in malpractice premiums.

Additional Links:

Association of Trial Lawyers of America: Advocating against damages caps.

American Medical Association: Advocating in favor of damages caps.

Congressional Budget Office, The Effects of Tort Reform: Evidence from
the States (June, 2004)

Search Strategy:

In addition to my personal familarity with these issues as a
practicing lawyer, I utilized the following searches:

Google Search: "tort reform"
Google Search: "congressional budget office" "tort reform"
Google Search: "collateral source rule" "tort reform"

I hope you find this information useful.

- expertlaw
adrianubc-ga rated this answer:5 out of 5 stars
wao, I am really impressed as this is my first time using google answer.
thanks a lot, it's extremely helpful.
thanks again!

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