Early Offers Program Would Improve Tort System, According to New Book

August 22, 2008

An "early offers" program in which medical malpractice and product liability lawsuits could be quickly settled would improve a tort system that is often slow, expensive and unfair, according to a new book co-authored by Law School Professor Jeffrey O'Connell.

In "A Recipe for Balanced Tort Reform," published by Carolina Academic Press, O'Connell and Professor Christopher Robinette of the Widener Law School examine the shortcomings of personal injury litigation, especially as applied to medical malpractice and product liability cases, and propose reforms.

The early offers plan would reduce the time it takes to pay losses by at least two years, and also greatly reduce the costs of such claims. Claims for personal injury against businesses, including for product liability, would be cut by an average of approximately $114,000 per claim and by $670,000 per claim for severe injuries. The early offers plan is projected to save an average of approximately $32,000 in legal expenses in all such cases and about $211,000 in cases of severe injury. Similar but even greater savings result when the reforms are applied to medical malpractice claims.

"The savings come mainly from eliminating pain and suffering damages and reducing legal fees," O'Connell said. "Lawyers too often employ highly polished rhetorical tools to melodramatically frame cases as 'good guys' against 'bad guys.' This causes accident cases to be crudely and misleadingly presented as overly 'simplified, personalized, moralized and dichotomized.'"

Under the authors' early offer reform, a defendant facing a personal injury claim is given the option within 180 days after a claim is filed of offering to guarantee periodic payments for a claimant's medical expenses and wage loss beyond any other applicable coverage, plus 10 percent for attorneys' fees. There would be no compensation for pain and suffering. The claimant in return agrees to foreclose further pursuit of a normal tort claim for both economic and non-economic losses. Offers could be turned down by claimants, but only in cases where the defendant's injurious acts were the result of gross misconduct provable beyond a reasonable doubt.

"This helps retain a crucial element of the tort system's deterrence mechanism," O'Connell said. "Injured parties could still win suitably large monetary awards under the early offers model for both economic and pain and suffering damages in clear cases of aggravated error. But less than 5 percent of today's injury liability cases are even allegedly the result of any gross misconduct, he added.

"Such savings are accompanied by much prompter payment of injured parties' essential losses, which ought to be the aim of any insurance program," O'Connell said.

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