The National Implications of Liability Reforms for General Liability and Medical Malpractice Insurance

Abstract

The stabilization of the insurance market may lead to lower prices for products and for medical care, but will also generally lead to lower values of tort awards as well. If the social objective was simply to reduce losses, then that objective could be achieved by abolishing tort liability altogether. Our societal concerns are clearly much broader. In the absence of a more detailed assessment of the desirability of the reforms and their effect on injured parties, it would be premature to conclude that reform efforts that were successful in enhancing insurance market profitability should be judged a success from the standpoint of advancing social welfare. Instead, any pronouncements of success must be more limited to whether these efforts accomplished the avowed objectives of the tort reform efforts.