For Immediate Release
Office of the Press Secretary
January 5, 2005
Legal Reform: The High Costs of Lawsuit Abuse
Today's Presidential Action
- Today, President Bush highlighted the need for common-sense medical liability reform to protect patients, to stop the sky-rocketing
costs associated with frivolous lawsuits, to make health care more affordable and accessible for all Americans, and to keep necessary services in
communities that need them most.
- The President's plan will help reduce the rising cost of health care while improving quality and safety. President Bush's framework for
addressing the medical liability crisis in America seeks to make health care more affordable and accessible for all Americans by making the
medical liability system more stable and predictable, and to protect patients by reducing the disincentives for reporting medical errors and complications.
- The President also stressed the need for class action lawsuit reform and asbestos litigation reform, and
he urged Congress to enact proposed reforms. Class action lawsuits are an important part of the U.S. legal system.
However, when the ability to bring a class action lawsuit is abused, it truly harms injured parties and
undermines the American judicial system. The growing problem of asbestos litigation is
similarly hurting workers, bankrupting businesses, and delaying relief for the truly sick claimants.
Background on Today's Presidential Action
The costs of litigation per person in the United States are far
higher than in any other major industrialized nation in the world.
Lawsuit costs have risen substantially over the past several decades,
and a significant part of the costs from lawsuits goes to paying
lawyers' fees and transaction costs -- not to the injured parties.
This explosion in litigation is creating a logjam in America's civil
courts and threatening jobs across America. Small businesses spend, on
average, about $150,000 per year on litigation expenses. The President
is urging Congress to pass legislation that reduces the burden of
frivolous lawsuits on our economy. President Bush supports enactment
of medical liability reform, class action lawsuit reform, and asbestos
litigation reform to expedite resolutions and curb the costs of
lawsuits for all Americans.
Curbing Lawsuit Abuse with Needed Medical Liability Reform
- Frivolous lawsuits and excessive jury awards are driving many
health care providers out of communities and forcing doctors to
practice overly defensive medicine. This reduces access to medically
necessary services and raises the costs of health care for all. The President has proposed proven
reforms, such as common-sense limits on non-economic damages, to make the medical liability system more fair, predictable, and timely.
- The President's framework for addressing the medical liability crisis includes:
- Securing the ability of injured patients to get quick,
unlimited compensation for their "economic losses," including the loss of ability to provide
unpaid services like care for children or parents;
- Ensuring recoveries for non-economic damages do not exceed a reasonable amount ($250,000);
- Reserving punitive damages for egregious cases where they are justified, and limiting damages to reasonable amounts;
- Providing for payments of judgments over time rather than in a single lump sum, to ensure that appropriate payments are made when patients need them;
- Ensuring that old cases cannot be brought to court years after an event; and
- Providing that defendants pay judgments in proportion to their fault.
Returning Justice to the Truly Injured with Class Action Reform
- The President supports class action reforms to limit the abuse of large, nationwide class
action cases and return justice to the truly injured parties. Class action lawsuits are an important part of the
U.S. legal system. However, the class action system is heavily abused, which in turn does not benefit injured
parties and undermines the American judicial system. In particular, injured parties often
receive awards of little or no value while lawyers receive large fees. The proposed class action reform
legislation recognizes that large interstate class action lawsuits deserve Federal court access
because they typically affect more citizens, involve more money, and implicate more interstate commerce
issues than any other types of lawsuits. These reforms do not alter the right of a plaintiff to
bring a legitimate claim, or change controlling substantive law, but they do provide additional protection and information to class members.
Aiding Asbestos Victims with a Fair System and Long-Term Solution
- Victims of asbestos-related diseases deserve a fair system and a
long-term solution. The current system may leave little or no funds to pay current and future asbestos
victims; is costly to administer (future transaction costs are estimated at between $145 and $210 billion);
will impose large, indirect costs on the economy; and has driven exposed defendants,
including small businesses, into bankruptcy. Asbestos, as the longest-running mass tort litigation
in U.S. history, has led to the bankruptcies of at least 74
companies. Within the past few years, there have been sharp increases in the number of asbestos claims filed annually. The President has
stressed the need for reform and commended Congress for aggressively working on this problem, but more work needs to be done to pass legislation
for the President to sign that provides a fair and permanent solution.