The political arena has made the issue of tort reform a front and center issue. Over the past few years we have heard President Bush utter on several occasions how trial lawyers prevent doctors from practicing in this country and thus tort reform is needed. However, what we don’t hear is that several states have caps on damages in Medical Malpractice cases and the same do not lower the insurance premiums charged by the insurance companies. Therefore, the insurance carriers simply make more money and the public is left with little proptection against incompetent physicians.
In addition, the issue that is never broguht up regarding reform is the issue of bad faith on the part of insurance companies. It has become common practice in this state for insurance companies to refuse to settle claims regardless of the injuries or the liability. The insurance comapnies can do this without penalty due to the fact that the bad faith law in this state is so poor. Several states allow bad faith claims against carriers that refuse to make reasonable offers balancing the value of the case and liability. However, in New York to bring such a claim the Plaintiff must show that the carrier had no basis to refuse to settle. As carriers can almost always set forth “a” basis the issue of reasonableness is not at issue.
If the legislature is going to consider caps on lawsuits they must also consider reforming the bad faith law which will require insurance companies to act reasonably. Currently in many cases people pay there premiums for years without a claim and then when it is needed the carrier refuses to pay. Reforming the bad faith law will encourage reasonable negotiation and protect the interest of the paying public.