I don’t care that insurance execs get paid. Pay ’em more, I don’t care. Give ’em all a jet. But you damn well better let all of their policyholders and those impacted by their policyholders fight for the compensation they are entitled to. I’m not saying, “Pay the injured!” I’m saying, “Let the fight be fair.” Isn’t that what we all want out of life – a fair fight?
A tort action is a civil case in which an intentional or unintentional act caused a mental, physical, or monetary injury to another party. In such cases, the injured party has the right to sue the wrongdoer for damages. However, tort reform activists work to make it more difficult for injured people to file lawsuits and obtain jury trials. Tort reformers also strive to place limits on the amount of monetary compensation injured people receive from their lawsuits.
Tort reform disrupts an inherent right of citizens under the United States Constitution – the right to trial by jury. In a democratic court system, every person is held accountable for his or her actions under the same set of laws; it is where a citizen-plaintiff can prove all of the injuries that resulted from the act of a wrongdoer by presenting evidence of the accident, the physical, mental, and emotional injuries that he suffered, and how this injury will impact him for the remainder of his life.
The strongest proponents of tort reform are insurance companies. They claim that limits on tort lawsuit will reduce “frivolous lawsuits.” In reality, the main reason insurance companies support tort reform is to minimize the amount they must pay out for tort claims. Without the lost revenue of pay-outs, insurance companies can keep the full amount of their customers’ premium payments, adding to their fortune.
The Insurance Companies Aren’t Hurting
Insurance companies want you to believe that your premiums go up because of all the lawsuits. What about the insurance company’s need to turn a profit? Or fly their executives around in private jets? Those perks aren’t mentioned during the talks about tort reform. Is the insurance exec’s need to fly private more important than the injured party?
I’d argue it’s not. I don’t care that insurance executives fly in private jets or stay in $10,000 a night rooms or make an average of $13M a year. Like I said, give ’em all a jet. But not by compromising the judicial system and the citizens’ right to a trial by jury.
In 2013, Allstate obtained a gross profit of $3.4 billion. Their profit margin is 6.25%, return on equity is 10.16%, and their total cash was $3.74 billion. Last year, Allstate’s payout ratio was 22%. Nationwide Insurance grew its total operating revenue by 6% to $23.9 billion, and paid $13.9 billion in claims during the year of 2013. Their net operating income was $1.3 billion. Direct written premiums grew by more than 8%, to $17.6 billion during 2013. These staggering statistics show just how much money insurance companies collect from their customers each year. They are by no means enduring financial hardship. Yet, they push for tort reform that takes money out the pockets of deserving injured people.
Real People Suffer Because of the Tort Reform Debate
If someone is hit by a drunk driver on the job, and becomes paralyzed for the rest of his life, he will undoubtedly incur a great deal of medical bills, and endure serious pain and suffering. He will need to pay for surgeries, nurses and other home health aids to help him perform daily tasks for the rest of his life, and numerous other medically related financial obligations. He will never reclaim the quality of life enjoyed before the accident. Does he deserve less?
To be sure, an individual harmed by the recklessness and negligence of another certainly deserves to collect the appropriate amount of compensation to pay for his medical expenses as well as to cope with the pain and suffering caused by the injury. It is the job of a jury to hear the facts of a particular case and come up with compensation amount based on those facts. Because each situation is unique with distinct problems and solutions, it is unreasonable to create a standard monetary cap for each tort case. It is an American citizen’s right to be heard as an individual in the judicial system – to receive a fair trial and appropriate compensation package based on his specific circumstance.