Liability Insurance Reform

THE PROBLEM:

Physicians in New Jersey (and many other states) are being crushed by huge increases in malpractice insurance premiums. Many OB/GYNs have given up obstetrics. Twenty-five percent of neurosurgeons have left the state or retired. Many other surgeons have curtailed or are considering curtailing their practices to reduce their insurance costs.

WHY ARE WE HERE?

Insurance companies have been forced to raise their premiums primarily for two reasons. The increasing number and size of jury awards, and stock market losses on their investments. None of us can do much about the stock market, but we believe that we can change the court system. We are out-spent by the trial lawyers, who lobby the legislature aggressively to preserve the status quo. Thus, we are fighting an up-hill battle, but we must fight it to preserve our ability to continue to practice and care for our patients.

SO WHAT IS THE SOLUTION?

There are really several parts to the solution. The first part is to prevent groundless (frivolous) lawsuits from being brought. Even though most of these never get to court, our insurers spend tens of thousands of dollars on each one preparing the case to defend the physician. Once the plaintiff's lawyer realizes that he will not get a settlement, and does not believe that his case is strong enough to take to court, it is dropped. But costs are incurred that can not be recouped from the plaintiff or their attorney. We need to eliminate these.

Second, we need a cap on "pain and suffering" awards. This will have no impact on the economic damages awarded. If you are injured and can not work, you can still recover all of the money you might have earned if you kept working, as well as medical costs and other direct expenses. However, you would not be able to recover expenses that were paid by other insurance, such as medical insurance. You would be limited to $250,000 in punitive or "pain and suffering" damages, which are intangible, arbitrary, and outrageous in many cases. Juries have come to think of this as a "winning lottery ticket" for the plaintiff. This must stop.

Third, large awards, such as for lifetime income, would be paid over time rather than as a lump sum. After all, if it is meant to replace your lifetime income, why should you get it all at once, be able to squander it, and then be left with nothing (this happens more often than you would think). Annuity type payments would prevent this.

Finally, attorney fees would be limited. Why should a jury have to award two million dollars in order for the plaintiff to receive one million? Why should an attorney be able to retire off the fee on a single case? This needs to change.

For the record, California passed a liability reform package ten years ago, very similar to what we are asking. It works very well, and liability insurance rates in California have increased at less than one third the rate of the rest of the country since then.

WHAT CAN YOU DO?

We have prepared a sample letter which you can sign and send to your elected officials. We recommend that you send this to your state senator and assemblymember. Please also send a copy to our governor. You may send it as well to your federal contressman/woman and senators. President Bush has expressed a desire to see a federal solution to this problem. Feel free to send him a copy as well.

If you do not know your elected officials or their addresses, I have provided a list of the more common addresses below. If you do this, please send us an email, letting us know who you are and to whom you have sent your letters. This will help us understand our chances of success.

To print the address list or the letter, in Internet Explorer, RIGHT click the link below and choose Print Target. With either IE or Netscape, LEFT click the link to go to the page, then, in IE, RIGHT click over the letter text and chose PRINT, or in Netscape, click on the letter and then from the FILE menu, chose PRINT FRAME. You can also copy and paste the text into your word processor and modify it as you see fit (type your name and address, change the content, etc.).

List of Mailing Addresses -- this includes both state and federal levels.