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For the past 15 years, Ohio lawmakers have wrestled with this question: How much is too much to award in personal-injury lawsuits? Last week, House Speaker Larry Householder wrongly sidetracked Senate Bill 80, the third and latest attempt to find a middle ground that would allow victims reasonable compensation for their injuries while preventing juries from awarding outlandish sums that impose an undue burden on businesses and individuals.
The process of setting limits on what victims can collect in economic, noneconomic and punitive damages and what lawyers can receive in fees is called tort reform . A tort is a harm suffered because of some form of negligence attributable to another person or entity. Torts come in many sizes and shapes.
For example, people injured in auto accidents can sue the negligent driver, but some of these lawsuits also target the auto manufacturer, claiming that deficiencies in vehicle design caused or contributed to injuries.
Householder, R-Glenford, said he had been alerted to problems in the tort- reform bill, including the likelihood that limits on jury awards could raise constitutional questions. The speaker was quoted as saying that the House preferred to deal only with the asbestos-liability portion of the bill, leaving its broader provisions for consideration at a later time in separate legislation.
This would be unfortunate and unnecessary.
Although the Ohio Supreme Court twice has ruled prior attempts at tort-reform unconstitutional, this legislation is different and so is the composition of the court. Some of the court's previous decisions on tort reform and other cases have been pointedly anti-business and legally unsound. One ruling on uninsured-motorist coverage, for example, effectively extended an employer's insurance coverage to children of employees who might be hit by uninsured drivers while riding their scooters. Was that really the legislative intent?
Many other states have enacted tort reform that passed constitutional muster and did not compromise victims' interests.
The bill, sponsored by Sen. Steve Stivers, R-Columbus, would place no limits on actual damages but would limit noneconomic damages, including pain and suffering, to between $250,000 and $1 million, depending on the severity of the case. It also would limit punitive damages (punishment to deter further negligence) to $100,000.
Contingency fees for lawyers would be capped at 35 percent of the first $100,000 of an award, 25 percent of the next $500,000 and 15 percent of any amount greater than $600,000.
A quick look at these numbers gives pause to the notion that attorneys or their clients somehow would be put upon by ruthless business interests if this legislation is enacted.
Insurance companies, which usually are left with the burden of paying out huge awards by juries, don't sulk; they increase premiums for everyone. The U.S. tort system is the most expensive in the world, according to Citizens for a Sound Economy, a conservative think tank, consuming 1.8 percent of gross domestic product, or twice that of any other industrialized nation.
Businesses facing unaffordable liability insurance costs are forced to cut jobs, relocate to a cheaper labor market or shut down. A 1995 study cited by the American Tort Reform Foundation showed that states enacting tort reform increase productivity between 7 percent and 8 percent and employment between 10 percent and 20 percent.
Few states score well in the job-creation category when the cost of doing business is not competitive. Ohio has prided itself on a ready, willing and able work force, but there won't be jobs enough to go around if the state can't control employers' costs, and a good place to start is at the courthouse.