Timeout in the Tort Reform Wars : A bit of calm analysis suggests the problems in civil lawsuit arena are being exaggerated

As 1995 began, Americans who wanted limits on monetary awards in civil liability cases and an overhaul of laws governing such litigation had high expectations. Public frustration over questionable class actions and frivolous lawsuits had hit a high point, particularly within the business community. Lawmakers in Sacramento and Washington, sensing the mood, introduced a wish list of bills to restrict the ability of plaintiffs to sue for damages and to limit monetary awards.

But as the year draws to a close, most of these tort reform measures have stalled, in large part because of intense opposition from consumer groups and some of the lawyers who make their livelihoods arguing civil cases.

With the heat growing on each side in this dispute, it is ever clearer to outside observers that solid analysis, not a political tug of war between lobbying factions, should drive tort reform. A group of studies by the National Center for State Courts, which does research for state courts on administration and caseloads, is just the sort of examination that should guide the debate. Its con- clusions--based on analysis of jury verdicts in 45 of the country’s largest urban areas, including nine in Cali- fornia--cast doubt on some of the claims made by tort reform advocates, particularly that runaway jury awards are common and that an explosion of injury litigation has oc- curred. These studies also raise sharp questions about proposals for caps on punitive damage awards and limits on the right to sue.

The researchers found that only 8% of tort awards exceed $1 million and only 6% of those awards include punitive damages. And in contrast to tales of multimillion-dollar windfalls, the median punitive damage award is just $50,000. And only a tiny portion--2%--of all tort cases analyzed are decided by jury verdict; most are settled or dismissed.

The research from the national center--which seems to have no ax to grind in the tort reform debate--underscores similar findings from RAND’s Institute for Civil Justice and other groups.

In California, unfortunately, uninformed generalizations are pushing the tort reform debate into overdrive. As many as nine tort reform initiatives could appear on state ballots next March and November, and some of them directly contradict others.

Lawmaking by initiative is expensive and no substitute for carefully crafted legislation. Many California voters understandably are bewildered by the hyperbole and conflicting claims that have substituted for serious scrutiny of the tort liability system’s strengths and weaknesses. Unfortunately, voters are likely to become even more confused in the months to come.