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GAZETTE
MARCH 1988
Tort Reform in the U.S.A.
and Lessons for I reland
T h e r e c e n t c l a m o u r f o r r e f o r m i n t h e a r ea o f p e r s o n a l i n j u r y
l i t i g a t i on i n t h i s c o u n t r y h a d b e e n p r e c e d e d b y e v en m o r e
s t r i d e n t c a l l s f o r r e f o r m i n t h e U S A i n r e c e n t y e a r s w h e r e
p h r a s e s l i k e " i n s u r a n c e c r i s i s " a n d " l i t i g a t i o n e x p l o s i o n "
c h a r a c t e r i se t h e d e b a t e . T h e r e , l o b b i es w i t h v e s t ed i n t e r e s t s,
t r i a l l a w y e r s a n d t h e i n s u r a n c e i n d u s t r y , f o r e x a m p l e , l o c k
h o r n s i n s o m e t i m e s s t r i d e n t d e b a t e . T h e A m e r i c a n B a r
A s s o c i a t i on f o u n d i t s e lf i n t h e e m b a r r a s s i ng s i t u a t i on i n 1 9 8 5
w h e n i t d i d n o t h a ve a n a r t i c u l a t ed p o l i c y o n t h e i s s u es i n
q u e s t i o n . To r e m e d y t h i s t h e A s s o c i a t i on s e t u p a c o m m i t t e e
u n d e r t h e c h a i r m a n s h i p o f P r o f e s s o r B. M c K a y t o e x a m i n e
t h e m a t t e r a n d s u g g e s t r e f o r m s .
The Mc K ay Repo rt
A draft report was produced in
December 1986 wh i ch it was
hoped would be unanimous, but
just be f o re pub l i c a t i on, f our
members broke ranks and entered
a
m i n o r i ty r epo r t. Gene r a l ly
speaking, the minority felt that the
insurance dimension should be
t aken i n to a c c o u nt in any
examination of proposals for reform
in the tort system. The majority
claimed that the consideration of
the insurance aspects of the
Problem was outside its remit. After
some heated debate within the
Association itself, the report was
finally adopted at a full meeting of
the A.B.A. in February 1987.
The report itself was a thorough
one and the recommendations
were, in the words of the Chairman,
rather
mo d e s t.
Twen t y - one
Proposals
for
r e f o rm
we re
suggested and the major ones are
set out hereunder. At present 19 of
these have been adopted by the
A.B.A. and the other t wo are still
subject to discussion within the
Association itself. The principal
recommendations of the McKay
Committee for tort reform in the
U.S.A. were the following:
P&in and Su f f e r i ng Damages
There should be no ceilings on pain
and suffering damages, but instead
trial and appellate courts should
make greater use of the power of
remittitur
or
additur
w i th reference
to verdicts which are either so
excessive or inadequate as to be
clearly disproportionate to com-
munity expectations by setting
aside such verdicts unless the
affected parties agree to the
modification. One or more tort
award • commissions should be
established, wh i ch wou ld be
empowered to review tort awards
during the preceding year, publish
information on trends, and suggest
guidelines for future trial court
reference. Op t i ons should be
explored to provide more guidance
to the jury on the appropriate
range of damages to be awarded
for pain and suffering in a particular
case.
2. Pun i t i ve Damages
The scope' of punitive damages in
cases involving damage to person
or property should be narrowed.
3. Jo i n t - and -Seve r al Liability
The doctrine of joint-and-several
liability should be modified to
recognize that defendants whose
responsibility is substantially dis-
proportionate to liability for the
entire loss suffered by the plaintiff
are to be held liable for only their
equitable share of the plaintiff's full
economic loss. A defendant's
responsibility should be regarded as
' 'substantially disproportionate'',
when it is significantly less than
any of the other defendants; for
example, wh en one of t wo
defendants is determined to be less
than 2 5% responsible for the
plaintiff's injury.
4. A t t o r n e y s' Fees
Fee arrangements wi th each party
in tort cases should be set forth in
a written agreement that clearly
identifies the basis on which the
fee is to be calculated.
Cou r ts shou ld p r oh i b it t he
practice of taking a percentage fee
out of the
gross
amount of any
judgment or settlement. Contin-
gent fees should be based only on
the net amount recovered after
litigation disbursements such as
filing fees, deposition costs, trial
transcripts, travel, expert witness
fees, and other expenses necessary
to conduct the litigation. Whenever
judgment is entered in a tort case,
fee arrangements w i th each party
and the fee amount billed should be
submitted
in camera
to the court,
which should have the authority to
disallow, after a hearing, any
portion of a fee found to be "plainly
excessive" in the light of prevailing
rates and practices.
5. S t r e am l i n i ng t he L i t i ga t i on
Pr ocess: Frivolous C l a i ms a nd
Unneces sa ry Delay
A " f ast t r a c k" system should be
adopted for the trial of tort cases.
In recommending such a system,
the Committee endorsed a policy of
active judicial management of the
pre-trial phases of tort litigation. It
anticipated a system that sets up
a rigorous pre-trial schedule w i th a
series of deadlines intended to
ensure that tort cases are ready to
be placed on the trial calendar
within a specified time after filing
and tried promptly thereafter. The
Courts should enforce a firm policy
against continuances.
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