Tort Reform

Tort reform refers to proposed changes to legal rules of civil justice with the objective of reducing litigation suits.

It is mostly mentioned with regards to the governance of medical malpractices which can result in lawsuits filed by patients who felt that they have been wronged against medical practitioners.

This has always been a professional and financial risk that physicians undertake.

Depending on the type of loss a victim has suffered, damages awarded by the courts can often be quite considerable.

The huge financial threat of these lawsuits is also a big reason why medical professionals such as doctors purchase professional indemnity insurance or other types of liability insurance.

It would be unwise not to.

It is also a cause in the increasing practice of defensive medicine.

Due to the perceived liability risks, some might even choose to leave the industry as soon as an alternative profession becomes viable.

Tort reform is thus, sometimes necessary to protect doctors, which is a profession that plays in important role in society, from the threat of litigation actions filed against them motivated by financial gains.

For example, a minor injury that has fully recovered can be framed by lawyers, hired by a patient solely seeking financial gain, to be a tragic life-altering event that resulted in perpetual emotional and psychological damage.

While it is fair that those who suffer due to malpractices to receive compensation, if litigation is positioned as a way for people to make money, then it can change the whole landscape of the medical industry.

The last thing we want when seeing a doctor is to have his or her consultation directed by the fear of liability lawsuits, even if it’s just a remote possibility.

This does not put them in the best mental state to consult, diagnose, prescribe and treat patients.

Professional indemnity insurance

Tort reform has often been discussed with regards to indemnity insurance policies catered to professionals.

Medical indemnity insurance for example, can be broadly classified into two categories:

  • Occurrence-based
  • Claims-based

Occurrence-based cover provides coverage for events that occurred when the policy was active. This means that if a suit arises 5 years after when the event happened, the insured would still be protected with liability coverage even though he or she might no longer paying the premium.

Claims-based cover provides coverage only when the policy is active at the time of litigation.

This means that a doctor who is on a claims-based indemnity policy would not be protected by insurers should a claim arise even though it was active during the incident, but inactive during the time of suit.

This also means that a former surgeon might have to purchase indemnity insurance policies for the rest of his life, even well into retirement just to be safe and have peace of mind.

Tort reforms has been observed in other nations to address this very problem as the risks with claims-based indemnity policies can convince medical practitioners to leave the industry altogether or relocate to a country with regulations that offer more protection for their profession.

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