This report offers a framework for assessing the effects of tort reforms. It attempts to provide a coherent structure for systematically thinking about how research can contribute to the policy debate over tort reform. It identifies four basic policy issues critical to assessing the effects of tort reforms on the tort system: (1) how soon we can expect to see effects of reforms; (2) whether reforms have affected the outcomes of disputes; (3) who won, who lost, and how much; and (4) whether reforms have affected economic behavior. The author points out that the kinds of data needed to assess the effects of reform are generally not available, and suggests that three types of new data collection systems need to be considered: (1) systematic efforts to obtain data from insurers and self-insured defendants on the aggregate outcomes of liability claims; (2) special surveys of claimants, the bar, and insurers to obtain the detailed individual claim information needed to identify the winners and losers in the reformed system; and (3) systems for collecting information both on the other factors that affect the behavior of participants in the tort system, and on economic outcomes and injuries.

Whereas the literature evaluating the effect of tort reforms has focused on reported incurred losses, this paper examines the long run effects using a comprehensive sample by state of individual firms writing medical malpractice insurance from 1984-2003. The long run effects of reforms are greater than insurers' expected effects, as five year developed losses and ten year developed losses are below the initially reported incurred losses for those years following reform measures. The quantile regressions show the greatest effects of joint and several liability limits, noneconomic damages caps, and punitive damages reforms for the firms that are at the high end of the loss distribution. These quantile regression results show stronger, more concentrated effects of the reforms than do the OLS and fixed effects estimates for the entire sample.

Whereas the literature evaluating the effect of tort reforms has focused on reported incurred losses, this paper examines the long run effects using a comprehensive sample by state of individual firms writing medical malpractice insurance from 1984-2003. The long run effects of reforms are greater than insurers' expected effects, as five year developed losses and ten year developed losses are below the initially reported incurred losses for those years following reform measures. The quantile regressions show the greatest effects of joint and several liability limits, noneconomic damages caps, and punitive damages reforms for the firms that are at the high end of the loss distribution. These quantile regression results show stronger, more concentrated effects of the reforms than do the OLS and fixed effects estimates for the entire sample.

This study evaluates the impact of tort reform on private health insurance coverage using the Current Population Survey's March Demographic Files. Proponents of tort reform argue that reform will reduce medical malpractice insurance costs, damage awards, and costs associated with defensive medicine. If proponents are correct, these cost reductions should increase health insurance coverage. On the other hand, if the prior tort law was functioning well, reform may increase medical costs by reducing doctors' care-taking or increasing of the use of aggressive treatments. In this case, tort reform could actually decrease insurance coverage by raising healthcare costs. We evaluate the effect of eight common tort reforms on private health insurance coverage between 1981 and 2007. We find that damage caps, collateral source reform, and joint and several liability reform increased health insurance coverage for the most price-sensitive groups (the single-young and the self-employed) between one-half and one percentage point each. Accordingly, we conclude that tort reform may increase insurance coverage rates for price-sensitive groups, but its overall effect on coverage will be small.

We evaluate the effect of tort reform on employer-sponsored health insurance premiums by exploiting state-level variation in the timing of reforms. Using a dataset of healthplans representing over 10 million Americans annually between 1998 and 2006, we find that caps on non-economic damages, collateral source reform, and joint and several liability reform reduce premiums by 1 to 2 percent each. These reductions are concentrated in PPOs rather than HMOs, suggesting that can HMOs can reduce "defensive" healthcare costs even absent tort reform. The results are the first direct evidence that tort reform reduces healthcare costs in aggregate; prior research has focused on particular medical conditions.

Tort reform is a favorite cause for many business leaders and right-leaning politicians, who contend that out-of-control lawsuits throttle growth and inflate costs, particularly in healthcare. Less is said about how such reforms might affect the ability of individuals to recover damages for injuries suffered through another party's negligence. On that count, Texas--where efforts at tort reform have been energetic and successful--provides an opportunity to appraise the outcome for plaintiffs and their lawyers, an opportunity that Stephen Daniels and Joanne Martin take full advantage of in this timely and provocative work. Because much of the action on tort reform takes place on the state level, a look at the experience of Texas, a large and important state with a very active plaintiff's bar, is especially instructive. Plaintiffs' lawyers work on a contingency fee basis, collecting compensation for themselves as a percentage only if they win. Reduce lawyers' ability to use contingency fees as compensation, as tort reform inevitably does, and you reduce their economic incentive to do this work. Daniels and Martin’s study bears this out. Drawing on over 20 years of research, extensive surveys and interviews, the authors explore the impact the tort reform movement in Texas has had on the ability of plaintiffs to obtain judgments--in short on private citizens' meaningful access to the full power of the law. In the course of their analysis, the authors explain the history and economics behind the workings of the plaintiffs’ bar. They explore how lawyers select cases and clients, as well as the referral process that moves cases among lawyers and allows for specialization. They also examine the effects of medical malpractice reforms on plaintiffs' lawyers--reforms that often close the courthouse doors to certain types of people--tort reform's "hidden victims." Plaintiffs' lawyers are the civil justice system's gatekeepers, providing meaningful access to the rights the law provides. Daniels and Martin’s thorough and fair-minded work offers a unique and sobering perspective on how tort reform can curtail this access--and thus, the legal rights of American citizens.