Wal-Mart announces reduction in medical coverage due to continuing rise of cost of coverage. Premiums continue to climb while benefits drop. Auto, Home and Business insurance premiums continue to rise. It must be those lawsuits right? What about those trial lawyers they must be the cause. All those frivolous lawsuits keep driving up the cost for everyone. Great tag lines but as the old commercial says “Where’s the Beef?” The insurance industry has done a great job of advertising and obfuscating. They have convinced people that if only tort reform was passed then everyone’s insurance rates would drop. Texas has had tort reform for almost a decade. Have any of your rates dropped? I didn’t think so. Every year it is the same story, well the reforms didn’t go far enough.
Over the next few weeks I will go through some of the different legislative and judicial edicts that form our current Texas law and much ballyhooed Tort Reform. Why don’t we start with the newest fair haired tort reform -known affectionately as loser pays (if you are the one who is injured that is) which allows the Courts to dismiss frivolous cases. That is a great idea. That is probably why we have had that procedure in place for pretty much since the inception of laws in Texas.
The Courts have always had the power to dismiss a frivolous case upon request by either party. So why the need for the new law and why is it that the loser only pays if it is the person bringing the case and not the person who caused the injury. Could it be that the insurance companies defending the person causing wrecks and injuries are trying to intimidate people into not making valid claims? What a strange idea. So here we are with a whole new set of laws designed to reduce the ability to recover for injuries caused by others actions.
Even if it is an unintended (:>)) result at least the overall benefit is for the good of us all — right. Let’s look at that starting with loser pays. Sounds great, but who is the loser who is going to pay? Suppose that a driver, Rich causes a wreck and Joan is injured. Joan is taken to hospital and gets treated. She doesn’t have health insurance so who is going to pay the hospital bills? Well if she doesn’t have health insurance she probably has Medicare or Medicaid maybe — maybe not. If she does then one of those entities pays and has a right to recover all their money. So why if there is a chance of having to pay the person who caused the wrecks attorney fees and expenses would you take the risk? I mean everyone knows juries are crazy right. That is what we always hear as a reason why they shouldn’t be allowed to determine damages in an injury case which could impact a person’s life (but they are great for deciding life in death in a criminal case – but I digress), so why would an attorney agree to represent Joan if he or she has to spend months fighting with Medicare/Medicaid just to get an answer as to how much is owed, invest significant time and money out of his/her own pocket to try and recover the damages for her. It may be that the determination is that it is not worth it so no lawyer, no lawsuit.
Great tort reform works. Oh Wait.
What about the hospital bills that Medicare/Medicaid paid on behalf of Joan. Well you and I paid those bills, after all isn’t Medicare/Medicaid essentially a tax funded insurance plan. But wait there’s more (I love infomercials) and since the hospital didn’t get the full value of their services they raise their charges to offset the loss which causes the cost to go up for everyone else. So now you and I are paying for the injuries caused by Rich. So when we hear loser pays we need to just admit that you and I are paying and Rich gets a free ride for his actions. Next time we will discuss the Court Decision I affectionately call Brainless.
The opinions in this blog, as always, are mine and not necessarily those of the firm.