TORT reform has followed a difficult path in Ohio. Lawsuit limits were enacted by the General Assembly in 1996, then ruled unconstitutional in 1999 by a rogue majority of the Ohio Supreme Court that was subsequently sent packing by voters. Now, the legislature has acted again and we can only hope that this latest attempt at diminishing the lawsuit lottery will stand its legal ground.
The tort reform measure, which Governor Taft has pledged to sign, is a somewhat watered-down version from what was previously proposed.
One glaring shortcoming is that the measure fails to include a British-style "loser pays" provision, which would dramatically discourage frivolous lawsuits. Another drawback is that a limit on attorney fees was dropped from the bill, a move cheered by the Ohio Academy of Trial Lawyers.
Most personal injury, product liability, and similar civil cases that now cross the courthouse threshold will face limits on awards for non-economic damages - pain, suffering, mental anguish, and loss of consortium. Compensation for these so-called non-catastrophic injuries - whiplash in a car crash, for example - will be capped at a reasonable $500,000 per incident and $350,000 per person.
However, the bill contains no damage caps in catastrophic cases - those involving loss of limb or permanent disfigurement. And injured parties would still be able to sue for economic damages, which would include compensation for loss of income, medical expenses, long-term care, and the like.
In regard to punitive damages, smaller businesses get a break, with awards capped at $350,000 for an individual or business with 100 or fewer employees or a manufacturing concern with 500 or fewer workers. Again, there will be no cap on awards against larger businesses unless fraud or felony misconduct can be proven, but judges are required to review damage awards and reduce them if they are excessive.
It's not perfect, but the legislation could at least help end the concept of "deep-pocket justice," in which juries punish businesses of all sizes with monetary awards grossly out of proportion to the harm done. The practice has become a destructive force in American society.
While we do not want to abrogate an individual's right to sue for real damages inflicted intentionally or negligently, we - and most reasonable Americans, we believe - cannot countenance a system in which trial lawyers get rich off excessive awards and the injured plaintiff often comes out on the short end of the stick.
Juries in some locales have become famous for handing out absurdly large awards, apparently on the theory that, hey, it's only some rich business' insurance company that has to pay, so what's the harm?
The truth is that everyone pays for such shortsightedness, in the form of higher liability insurance premiums for businesses that are passed on to consumers in the form of higher prices for products.
With a more conservative majority in place on the state Supreme Court, the new lawsuit limits are unlikely to be challenged successfully. That's good for business and good for Ohio in general.