Lawsuit Reform

Lawsuit Reform is a Key Free-Market Issue

For a marketplace to function properly, a legal system must incentivize good behavior and punish bad behavior. Lawsuits exist to make the wrongly injured financially whole by the injurer. If the wrong party is required to pay for an injury, justice is not served. Likewise, if an individual is awarded a windfall of overcompensation for an injury, justice is not served. These scenarios are just as problematic as if a defendant were to not compensate the injured for an injury they legitimately caused.

Lawsuit Reform for Competitive State Economies, a new report from the Task Force on Civil Justice, translates the ideal of fairer legal systems into achievable legislative solutions. The report includes 16 of the most effective lawsuit reforms around the country and gives legislators the keys to understand, work on and benefit from reform.

The Task Force on Civil Justice spent years focusing research on areas of abusive tort law, as well as trends in cases that show unmerited claims. With this research, seemingly complex legal reforms can be simply understood and comfortably approached to improve legal climates, and hence business climates, across the states. A properly functioning legal system is well within reach.

Research reports have shown time and again the positive impact that lawsuit reform can have on a state economy. A 2011 study completed by NERA Economic Consulting for the U.S. Chamber Institute for Legal Reform shows just how effective well-crafted reform can be. With meaningful reform, tort costs in a state can be fairly reduced by over 25 percent. That means 25 percent savings in such key areas as malpractice and business insurance rates, all monies that can then be pumped back into hiring, research and overall heightened economic activity. Lawsuit reform boosts fair market practices, innovation and economic health.


In Depth: Lawsuit Reform

State legal systems and the liability they exert on businesses and individuals are a disincentive to bad behavior and allow fair players to succeed in the marketplace. When lawsuits inappropriately punish good actors, resources are sucked out of the business economy, away from research & development and job creation. Lawsuit…

+ Lawsuit Reform In Depth