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Tort Reform

 What is a Tort?

A tort is an act or omission (breach of duty), whether intentional or accidental, which gives rise to an injury or harm to another. The injured party can recover economic and non-economic damages in a lawsuit against the person (tortfeasor) who caused the harm or loss.  Torts include, among other things, motor vehicle crashes, slip and falls, product liability, medical malpractice, and wrongful death.

It is important to understand the distinction between the types of damages you can recover in a tort claim.  Economic Damages are compensation for quantitative monetary losses such as, among other things, past and future medical expenses, past and future lost wages, and loss of employment opportunities.  Economic damages include any verifiable monetary loss.  Non-economic damages are compensation for pain and suffering, inconvenience, physical impairment, loss of consortium, and other non-monetary losses.  Unlike, economic and non-economic damages, punitive damages are awarded as a punishment to the defendant for outrageous conduct or acts and to deter the tortfeasor, as well as others, from such bad acts in the future.

What is Tort Reform?

Tort reform is a movement aimed at reducing tort litigation and putting a ceiling on the amount of money a plaintiff can be awarded by the court without it being excessive in nature.  The concept of limiting monetary awards originated with insurance companies and large corporations born from the perception that there was as an insurance crisis because of the excessive number of awards for non-monetary damages.

Tort reform can be traced back to the 1950s, if not earlier, but tort reform as we know it today did not gain traction until the 1980s.  By 1986, tort reform legislation was enacted in 60% of the states and by 2016, 33 states had statutorily imposed caps on damages in medical malpractice claims (malpractice center.com). Some of those states limit non-economic damages only, while other states limit the combined total of economic and non-economic damages, also known as umbrella caps.

The amounts of caps vary significantly among the states.  For instance, non-economic damages in California has a cap of $250,000 as does Montana and Idaho; however, Idaho’s cap is variable and can be increased or decreased with the living wage.  California’s cap has remained at $250,000 since it was enacted in 1975.  Conversely, Maryland’s non-economic cap increases annually by $15,000, and as of January 1, 2018, the cap is $800,000.

Colorado limits non-economic caps to $300,000 but the total amount of compensation cannot exceed $1,000,000.  Unlike the other states, Virginia’s total cap will max out.  It currently is $2.3 million with an annual increase of $50,000 until 2031, when it reaches its max at $3 million.  The next increase will occur July 1, 2018.  Other states, like Maryland have separate caps for medical malpractice and non-medical malpractice claims.

Effects of Tort Reform at a Glance

Tort reform has not only imposed limits on the amount of damages that can be awarded, but it has also imposed strict time limitations in which a claim can be filed.  Some states limit the timeframe to bring an action to one (1) year for some torts, while others may impose a three (3) year limitation.  Other states have a range of time, such as 3-5 years, or more, to bring an action against a tortfeasor.  Various factors come into play such as when you knew or should have known about the injury, or when the injury was discovered.  This puts injured parties at a huge disadvantage because in some cases, such as toxic exposure, the adverse effects may not manifest for years after the exposure.

Where is the incentive for big business to manufacture and sell safe products when the legal penalties are offset by limiting the compensation it must pay for injuries sustained because of the defective product?

Tort Reform in North Carolina

In North Carolina, the cap in medical malpractice cases is $500,000. The cap applies even if there are multiple defendants in a lawsuit. However, the cap will not apply in cases where the injured party suffered certain kinds of disfiguring or permanent injury AND the defendant's malpractice arose from reckless disregard.

Another reform has affected expert witness testimony. The injured person must employ the services of at least one expert medical witness.  The expert, in a sworn affidavit filed with the court, must swear that he/she has reviewed the injured person’s medical records and is prepared to testify that the medical care the injured person received was below the standard of care and was medical negligence.  Additionally, expert testimony must be based on sufficient facts or data, and is based on reliable principles and methods and the witness has applied the principles and methods reliably to the facts of the case

In cases involving an Emergency Room malpractice, the standard to prove negligence must be “clear and convincing” unlike the standard of “preponderance of the evidence” for other types of medical malpractice cases.

A defendant can now request that the court bifurcate the trial.  The first trial will determine liability and the second will determine damages.  This is particularly burdensome on the Plaintiff because of the added expense of two trials.

Additionally, tort reform has changed the admission of evidence of medical expenses to the amounts which were paid, or that must be paid to satisfy medical bills, regardless of the source of payment.  Plaintiffs will no longer be allowed to introduce evidence of the gross amount of medical bills without evidence of the contractually allowed amount of the payment.

The statute of limitations in North Carolina is complicated to navigate post tort reform, but generally, an injured person has three years from the date of the injury to file suit.  There are, like most things in the law, exceptions to the three (3) year statute.

One Tort Reform change which has produced arguably the largest effect in North Carolina is Rule 414 or Billed Versus Paid.  This Rule effectively reduced the value of almost ever claim in North Carolina.  The Rule limits the dollar amount of medical bills that can be considered by a jury, in every case.  The amount considered is the amount necessary to pay off the bill. The Rule does not take into account the dollar amount paid by the injured party for the health insurance they used to pay the bills.

Conclusion

Tort Reform legislation is typically sold as a way to control costs or reduce lawsuits.  In practice, Tort Reform has been shown as a legislative maneuver to limit financial exposure of insurance companies.  Typically, the injured parties are victimized a second time when it is time to adjudicate their claim.

Our personal injury attorneys have won millions of dollars for clients all over North Carolina. Whether you were injured in a car accident or through the negligence of a hospital, doctor, nurse, or other medical professional it is our job is to attain the best result possible for each individual client. Please call 704-714-1450 to speak with one of our lawyers today.

 

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