I just read a New York Times editorial about George Bush's proposal for "tort reform" in the United States and two issues of deception aimed at swaying people to a position stood out. First of all, the Times is guilty of portraying the president's proposal as an attempt to deny compensation to those deserving of it and the President is guilty of conflating dissatisfaction with the political implications of court decisions (e.g. striking down Ten Commandments in public places, etc) with malpractice suits and reform. He fans the flames of American dissatisfaction with the Constitution (his sneering use of "activist judges") to get people hot on the idea of reforming the courts and then suggests that we start with tort reform, which doesn't really address the activist judges issue but gives the impression that something was done just the same. I don't know if its done intentionally or not, but it's pretty despicable to manipulate people's perceptions like that. Make the case cleanly or don't make it at all.
But back to the Times. The editor writes that the President's proposal would limit "non-economic damages" $250,00 and that this would deny deserved compensation to those who truly deserved it after a doctor's negligence leaves them blind or brain dead or whatever. The Times then adds that oh yeah, that amount is hardly punishment either.
But what I think is wrong with this representation of the issue (I'm the first to point out that I could be wrong here) is that I think the President is seeking to limit punitive damages to a quarter million, not actual damages. There are two aspects of a financial decision in a malpractice or negligence (perhaps in a civil suit [or is that all these malpractice and negligence suits are?]), the actual damages and the punitive damages.
Actual damages are awarded to compensate a victim for losses they've suffered. Perhaps they cannot work any longer and actual damages will compensate them for future earnings. Depending on the injury, this can be very very high or comparatively low. The issue of punitive damages was developed to provide an avenue of punishing the guilty party when the actual damages are small enough that the guilty party can afford to pay them easily. The theory goes that without a punitive damages system, deep-pocketed companies can afford to be willfully negligent and just pay the meager actual damages.
The tobacco industry is a good example of this. Many people tried to sue them for damages and most were unsuccessful. Even those that were successful in receiving a damages award were only give a few million dollars at most in actual damages (as most damages were calculated as lost future revenue, I think, and most of these people would only gross a couple million at most in their middle class or manual labor jobs). The tobacco industry can afford to pay this every few years when a case slips through their defense, so there were given massive punitive damages (I think on plaintiff was awarded a few billion dollars, but I might be confusing the industry settlement with a specific case).
The point is that punitive damages have to be punitive, that's the whole point. Whenever we hear about the huge payouts that people win in these suits, those are punitive damages we are reading about. The President (and his lobbyists) argue that these are out of control and are driving malpractice insurance rates up and in turn driving doctor's out of business which then has the unfortunate consequence of depriving people of health care. Even when doctor's stay in business, the inflated insurance premiums raise the costs for the patient. Tort reform is the way to fix this, he suggests.
The Times is opposed to this suggestion and understandably so for the reasons I just laid out. However, it is unacceptable for the Times to present the President's proposal in a way that makes it look like he is suggesting that the maximum amount of damages anyone can ever recoup for any injury is merely $250,000. Perhaps that is true and I'm running off in the wrong direction here, but I don't think so. The president likely supports the idea that if you make $100,000 a year and have 15 wage earning years left until retirement, if a drunk doctor amputates your legs instead of removing the ingrown toenail, you deserve 1.5 million in inflation adjusted wage compensation. But the President seems to be saying that he thinks the doctor would only be liable for a $250,000 levy as punishment.
This clearly isn't the correct answer either. Punitive damages shouldn't be limited as a dollar amount. If a limit on damages is the goal, a percentage of gross income would be a better indicator, as a $250,000 payout by a tobacco company is chump change but would destroy an independent practitioner. The goal of punitive damages shouldn't be to put people out of business but it should punish them for their mistakes in an manner reflective of the degree of the mistake made.
Perhaps a different solution would be to create a patient's fund for punitive damages that all awards for punitive damages are paid into. The goal of punitive damages is to punish the offending party as opposed to compensate the victim, so nothing is "denied" to victims under this system. The fund could be used to fund research into medicines that don't have the financial incentive needed for big pharmaceuticals to get interested. Cures for diseases that have only a few sufferers or are primarily problems in developing countries (i.e. those that can't pay for medicines) would benefit from this.
Knowing that victims aren't going to be receiving the money would help delineate the conceptual confusion between actual and punitive damages, perhaps reducing punitive damages to a level more in tune with the intent rather than as influence by the emotional impact of a severely disabled person waiting for a judgement.
Please post comments here.
Posted by Nutrimentia at January 23, 2005 10:57 AM | TrackBack