Medical Malpractice Reform: Ten Principles of a Rational Tort System

The medical malpractice system in the United States has a poor track record and imposes heavy social costs—up to $2,500 per household, including defensive medicine. In a recent blog post, I proposed a voluntary, contractual, no-fault alternative to the current system.

Here, I name some of the principles that should guide tort reform.

Principle #1: Victims of torts should be fully compensated—no more, and no less.

Principle #2: Those who commit torts should pay the full cost of their harmful acts—no more, no less.

Principle #3: Whenever possible, damages should be determined in the marketplace (e.g., the market price to repair the damage).

Principle #4: Structured awards are generally preferable to lump sum awards.

Principle #5: Parties should always be free to alter by contract a court- determined award.

Principle #6: Reasonable limits should be set on damages for pain and suffering, subject to market-based rebuttable evidence.

Principle #7: Punitive damages are justified only if there are social costs over and above the victim’s private costs.

Principle #8: Contingency fees should be paid entirely by the defendants, with meritorious exceptions.

Principle #9: Attorney’s fees should be awarded in cases of bad faith.

Principle #10: The first nine principles do not apply to settlements.

Source: Priceless: Curing the Healthcare Crisis, by John C. Goodman (Oakland, Calif.: The Independent Institute), p. 191.

[Cross-posted at Psychology Today]

John C. Goodman is a Research Fellow at the Independent Institute, President of the Goodman Institute for Public Policy Research, and author of the Independent books, Priceless: Curing the Healthcare Crisis and A Better Choice: Healthcare Solutions for America.
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