Why Tort Reform is Needed
In legal terms, a "tort" is an unlawful causing of injury to another's person, reputation or property. The tort system is designed to compensate victims who suffer from accidental injuries caused by the carelessness of others.
Most tort cases are filed in state and county courthouses. As a result of legal loopholes and deficiencies in state laws, the number of tort liability lawsuits filed has grown significantly&EEMM;&EEMM;and so have the abuses.
For example, a jury awarded six retired railroad workers $5.8 million, not for physical injuries from asbestos, but for emotional distress based on the workers' fear of developing cancer from asbestos exposure.
The U.S. tort system is the most expensive in the world, which puts U.S. companies at a competitive disadvantage in an increasingly global economy. According to the Manufacturing Institute, tort costs reduce the cost competitiveness of American manufacturers by 3.2 percent.
A "Tort Tax" Affects Everyone
The inefficiencies and inequalities of the U.S. tort system have a high price tag. American consumers pay higher prices and investors earn lower returns on their investments. In 2002, the legal costs paid by U.S. companies totaled $233 billion, the equivalent of an $809 "tort tax" on every American.
A Nationwide Challenge
Many U.S. manufacturers have been the target of lawsuits related to the use of asbestos in brake pads and other products. But in just one year, the number of asbestos cases filed against Ford nearly doubled simply because so many of the other targeted companies filed for bankruptcy.
The rise in class action lawsuits also impacts Ford, as does the rise in medical malpractice litigation against doctors and hospitals, which adds to Ford's health care costs by increasing the cost of insurance.
Our Position on Legal Reform
We support the following positions on reforming the current tort system in the United States:
- Lawsuit and class action reform. We are working with legal reform coalitions to keep lawsuit and class action reform on the state and federal legislative agenda. We applaud the U.S. Congress for its passage of the Class Action Fairness Act, which protects both consumers and businesses from abuses in our class action system.
- Asbestos litigation reform. We support legislation that creates a negotiated closed-end trust fund to assure efficient compensation for truly sick claimants, and eliminates the abuses of the current asbestos litigation crisis.
- Medical liability reform. We advocate caps on non-economic/punitive damages to help reduce insurance costs and increase access to health care.
- Increased citizen participation in jury service. Ford supports public and private efforts to encourage jury pools that are more representative of the public at large.
More Information
For more information about tort reform, visit the following third-party websites
National Association of Manufacturers
U.S. Chamber Institute for Legal Reform
