The bizarre liability stories are appearing more regularly now. Two years ago, the focus was mainly on doctors, and every month or so we'd hear about some strange jury verdict or be told that obstetricians were switching specialties because the cost of medical malpractice insurance had become prohibitive. Now the stories appear every couple of days and touch activities many of us didn't even realize had to be insured.
A few weeks ago the much publicized peace march across the country collapsed at the outset because -- among other things -- organizers said they were unable to obtain insurance. This week, a growing profession, nurse-midwives, was threatened because no company will sell the practitioners liability insurance, and their temporary, stopgap coverage has expired. The nursesare now scrambling to set up a self-insurance mechanism that will cost each insured about five times as much as commercial insurance did last year. And on Friday, a jury in Philadelphia came down with a corker: a woman who claimed that a hospital CAT scan had damaged her "psychic powers" was awarded a million dollars for her loss.
There's more than anecdotal evidence here, too. The statistics are startling. According to a report just issued by the Tort Policy Working Group, an interagency panel organized by the attorney general, both lawsuits and jury awards are rising steeply. Between 1979 and 1983, for example, the number of medical malpractice suits per hundred physicians doubled. Suits against obstetricians tripled in the same period. In Cook County, Illinois, the average punitive damage award, measured in constant dollars, rose from $40,000 in 1970-74 to $1,152,174 in 1980-84. And the number of awards over a million dollars in medical malpractice and product liability cases increased 1,200 percent in the past decade.
Eventually, we all bear the cost of high premiums and excessive jury awards both in terms of higher prices and the disappearance of products and services not offered because of insurance costs. What's to be done? The federal government is a secondary player, except in the field of product liability, where interstate commerce is a factor. Nevertheless, the Tort Policy Working Group has developed a set of sensible recommendations, which the president has endorsed, and some legislation will be sent to Congress. Most of the work, though, will fall to the states, where thousands of tort reform bills were considered and many were passed this year. Most reforms involve setting limits on awards for pain and suffering, capping attorneys' fees and protecting minimally responsible but wealthy defendants from bearing more than their fair share of the burden.
Tort reform is necessary, and it is coming. High- level commissions, thughtful judges and state legislators will help. But it is jury awards such as the one for the Philadelphia psychic that shock the public and aid the cause of the reformers.