Illinois Tort Reform Efforts Struck Down

If anyone is betting on what organization is running the show in Illinois, my money is on the Illinois Trial Bar Association. Put a check mark in the “win” column recently for the Trial Bar as the 2005 tort reform law has been declared unconstitutional in a Cook County Circuit Court. No surprise really. As soon as the law passed, the Trial Bar said it would challenge the constitutionality of the law that would put caps on non-economic damages in medical malpractice lawsuits.

They Did So … And Won

This in spite of the fact that every insurance and medical organization is crying “foul” and saying that impact on Illinois will be less doctors practicing in the state, a reduction in the quality of medical care and fewer medical malpractice insurers willing to enter the Illinois market. (See full story on pages 144 and 145, “Proponents ring alarm after court ruling strikes down Ill. tort reform law.”)

Steve Schneider, vice president, Midwest Region of the American Insurance Association, summed it up pretty well.

“The business of insurance operates best when there is a stable, predictable tort climate. Illinois already has a poor liability climate by most measures and this ruling will do nothing to help that fact,” Schneider said.

State Success Stories

Are other states able to pass tort reform and realize the benefits?

Well, neighboring state Michigan’s 1993 tort reforms are clearly working when you see that the state’s largest physician medical malpractice insurer is cutting its premiums by 12 to 25 percent for Wayne County physicians, the Michigan State Medical Society (MSMS) said recently. The average decrease for all physicians in Wayne County will be 13 percent beginning Jan. 1, according to American Physicians Assurance Corp., a medical liability insurer based in East Lansing and a wholly-owned subsidiary of American Physicians Capital Inc. Statewide, American Physicians’ malpractice insurance rates will be reduced by an average of 6.5 percent in 2008.

In fact according the Michigan State Medical Society since the tort reforms went into effect in 1994, each component of the legislation has withstood constitutional challenges from the trial bar. Physicians who practiced in high-risk specialties such as obstetrics, neurosurgery, and orthopedic surgery often left Michigan for states where lawsuits were not as frequent and jury awards were not as high. Michigan now is a more favorable place to practice than many neighboring states. In fact a neurosurgeon in Detroit pays an annual rate of $201,512 for a $1 million/$3 million policy, while a colleague in Chicago pays $256,404 — a difference of $54,892.

Michigan and other states such as California and Texas — all large states — have successfully passed tort reform legislation and their laws have survived the constitutional challenges. Can Illinois successfully challenge this ruling in the Supreme Court? Let’s hope so. It is time consumers in Illinois have a check mark in their “win” column rather than the Trial Bar lobby.