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last updated on March 13, 2008

LEGAL REFORM

THE ISSUE IS…reforming the nation’s legal system.

IT’S IMPORTANT BECAUSE…If anyone doubts U.S. litigation costs are the costliest in the world, they need only consider that:

  • A recent study found the annual cost of civil litigation has reached nearly $865 billion – or $9,827 for a family of four;
  • More than 8, 400 companies named in asbestos cases could ultimately cost the U.S. economy well over $200 billion; and
  • The average jury award in medical malpractice lawsuits has more than tripled to $3.5 million since 1994.

NAMIC POSITION…NAMIC fully recognizes the effect of skyrocketing litigation costs on U.S. businesses and especially the insurance industry. That is why NAMIC actively supports state and federal legislative proposals to reform the civil justice system. This includes proposals to enact meaningful asbestos and silica laws or to put reasonable caps on medical malpractice and product liability lawsuits.

NAMIC is working closely with several broad-based coalitions to bring about these much needed changes. At the federal level, we are a member of the Lawsuit Abuse Reduction Coalition, which has tried to persuade Congress during the past two different sessions of Congress to enact legislation that would impose sanctions on attorneys, law firms, or parties who file frivolous lawsuits.

NAMIC is also a member of the American Tort Reform Association which is dedicated to repairing our civil justice system. NAMIC, in collaboration with ATRA, continues to fight in Congress, in state legislatures, and in the courts to make the court system more fair.

Finally, NAMIC recognizes that part of any solution to reforming the civil justice system ultimately lies in electing state and federal lawmakers who are willing to step up and support legislation to limit run away legal costs. Through its PAC, NAMIC intends to become more involved in these races and, in particular, elections involving state Attorneys General and elected state judicial races.

Asbestos Litigation Reform

At the federal level, there have been several attempts over the last three years to address the asbestos litigation crisis. However, legislation creating a national asbestos trust fund was unacceptable and NAMIC opposed the bill.

However, state policymakers have taken action to reduce frivolous asbestos lawsuits in the states and have passed major reforms.

NAMIC will continue to work with the states to enact meaningful reforms. There are people that have been physically injured or have died from exposure to asbestos, and the legal system should fairly and adequately compensate these innocent victims. However, today’s system instead targets and punishes those companies who had only peripheral or no involvement with asbestos-containing materials, and it allows some individuals to sue and obtain compensation when they are not injured. Wrongly punishing innocent companies while awarding damages to unimpaired plaintiffs only serves to prevent the truly injured from obtaining just compensation.

Product Liability Reform

The current state of product liability law is such that the former fault-based system has been transformed into one of strict liability, which punishes manufacturers and their customers regardless of fault. This strict liability system has served to inhibit the development of new products and adversely impact the international competitiveness of products manufactured in this country.

The imbalance and uncertainty of evolving state tort law are major contributing factors to increasing product liability insurance costs. NAMIC endorses efforts to enact a federal product liability reform law that will restore fairness and predictability to the marketplace.

Medical Malpractice Liability Reform

Medical malpractice insurance serves to insure doctors and others in the medical field for liability claims arising from patient treatment. In the past few years, the cost of medical malpractice insurance has skyrocketed.

Due to these rising costs, there are nationwide examples of doctors refusing to take on new patients, having to quit their practices, or relocating to other states. Additionally, many insurance companies that once provided medical malpractice coverage have been forced to completely withdraw from the market, while others have had to stop selling such policies.

NAMIC believes that Congress must pass legislation to reform medical malpractice liability. While those who are truly harmed by medical malpractice should be justly compensated for their injuries, the current system is forcing many doctors to quit their practices or relocate because the rising costs are simply too much. If this trend continues, more and more doctors will be unable to practice, and as a result, more patients will have difficulty finding proper care. NAMIC is supportive of medical malpractice legislation that would limit the runaway jury awards of non-economic and punitive damages

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Legislative Action Network

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Benjamin Franklin Public Policy Award

Every two years, NAMIC presents their coveted Benjamin Franklin Public Policy Award© to lawmakers who have supported a stronger insurance market at least 75 percent of the time. This is demonstrated based on their support of NAMIC's position on certain roll call votes taken, or being a principal player/sponsor on legislation affected the property/casualty insurance industry, during the previous Congress.