10 years later, ‘tort reform’ has dramatic impact on suits, payouts

[TexasTowelie]

7. I agree with the first part of your statement;

however, read post #4 because the second part of your statement doesn't appear to be accurate (at least in medical professional liability).

Exemplary damages were rarely awarded against physicians, but on occasion they would be awarded against hospitals and clinics. It is the cap on non-economic damages and the caps on public liability (for hospitals) that resulted in the decline of claims and direct losses paid. Also note that the payments for excess coverage also declined which would be tied to tort reform caps. Here is the some information to consider:

Year |Direct Losses Paid |Losses Paid for Excess Coverage |Number of Claims Closed During Year| Notes
1997 |169,640,378 |5,391,530 |1,248
1998 |243,782,343 |17,788,957 |1,155
1999 |280,307,255 |9,321,542 |1,249
2000 |392,591,136 |18,537,071 |1,325
2001 |290,813,265 |10,558,242 |1,210
2002 |277,477,224 |7,642,000 |1,181
2003 |224,981,129 |5,957,863 |1,275 Enactment of tort reform for losses occurring on or after 9/1/2003.
2004 |239,527,333 |5,214,827 |1,260
2005 |162,936,557 |80,904 |1,144
2006 |110,961,262 |1,837,081 |895
2007 | 85,377,705 |1,885,065 |750
2008 | 79,098,216 |59,712 |629
2009 | 70,845,465 |456,850 |577 Change of reporting threshold requirements occurred on 9/1/2009.
2010 | 66,092,190 |151,946 |508
2011 | 48,059,023 |157,898 |450

Source: http://www.tdi.texas.gov/reports/report4.html#closed_a
Closed Claim Annual Reports

Additional Notes:
The direct loss paid and losses paid for excess coverage come from the annual reconciliation report which is near the of each annual report.
There is usually about a 3.5 to 4 year lag time from when the between the date of the incident and the date of claim closing for medical malpractice claims.
The number of claims closed comes from Figure 28 of the Closed Claim Annual Reports.

The change of reporting requirements on 9/1/2009 would have a small effect on the number of claims reported since the threshold rose from $10K to $25K.
There usually weren't many medical malpractice losses that occurred in that range though.

There may have also been some decline in premiums that resulted from decreases in reinsurance premiums because of the caps, but I'm unaware of any sources that capture that information.