In addition to the comprehensive federal and state legislative tracking, the Legislative Liaison Subcommittee for the Young Lawyer's Group publishes monthly articles in The Whisper. The following is an example of an article that the legislative liaison subcommittee provides:

Current Projected Economical Impact of Medical Malpractice Tort Reform

In his recent State of the State address, California Governor Arnold Schwarzenegger laid out an aggressive agenda covering his final year in office. Along with the typical goals of creating jobs and protecting education, Gov. Schwarzenegger listed tort reform near the top of his to-do list.

Tort reform can be pursued under many divergent theories, and many states have enacted some type of reform in efforts to regulate the otherwise unbridled arena of tort litigation. In an October 9, 2009 letter to Senator Orrin G. Hatch, the Congressional Budget Office (CBO) estimated that one-third of the states have implemented caps on non-economic damages, such as pain and suffering, in tort litigation and two-thirds of the states have enacted rules regarding joint-and-several liability. California, for example, has enacted the Medical Injury Compensation Reform Act, which limits non-economic damages to $250,000. The Governor, however, believes that more reform can and should happen.

In its October 9, 2009 letter to Sen. Hatch and follow-up December 10, 2009 letter to Senator John D. Rockefeller IV, the COB projected the potential impact that national medical tort reform could have on the nation’s budget. In creating its projections, the COB acknowledged legislation currently enacted by certain states, but premised its estimations on what it considered typical tort reform proposals:

• A cap of $250,000 on awards for noneconomic damages;

• A cap on awards for punitive damages of $500,000 or two times the award for economic damages, whichever is greater;

• Modification of the “collateral source” rule to allow evidence of income from such sources as health and life insurance, workers’ compensation, and automobile insurance to be introduced at trials or to require that such income be subtracted from awards decided by juries;

• A statute of limitations – one year for adults and three years for children – from the date of discovery of an injury; and

• Replacement of joint-and-several liability with a fair-share rule, under which a defendant in a lawsuit would be liable only for the percentage of the final award that was equal to his or her share of responsibility for the injury.

Assuming uniform national tort reform to include the above-factors, the COB projected that there would be direct and indirect benefits to the total amount spent on health care and reductions to the federal budget. COB calculations based on historical and current data suggest a reduction in total national health care spending by about 0.5 percent. This reduction contemplates lower medical liability premiums and less utilization of certain health care services.

This total overall tort reform would reduce spending of certain federal agencies by an estimated $41 billion from 2010 – 2019. The COB additionally estimates that lower premiums will allow employers to pass along the savings in the form of higher wages to its employees. The wages are taxable whereas much of the private sector employee health insurance benefits are non-taxable. These higher wages are expected to increase the federal tax revenues by $13 billion over the same ten-year period. The bottom-line is that the COB estimates that if a medical tort reform package was adopted as stated above, the net result would reduce the federal budget deficits by roughly $54 billion over the next 10-years.

With most state budgets struggling to make ends meet, look for tort reform, especially medical tort reform, to be an area where some state legislators attempt to propose new legislation in 2010 to not only assist the medical profession but also reduce overall medical spending.

Joseph W. Ballard is an attorney with the law firm of Lewis, King, Krieg & Waldrop, P.C. in Knoxville, Tennessee. Joseph focuses his practice in the areas of insurance defense, products liability, and education. Joseph is currently vice-chair for the Young Lawyers Legislative Liaison Sub-Committee.

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