When you weigh the accomplishments during Haley Barbour’s two terms in office as Mississippi’s governor, a few stand out.
First was his swift, organized and effective response to Hurricane Katrina, the worst natural disaster to ever hit the United States.
Right up there also have to be the reforms he persuaded lawmakers to enact during his first year in office to rein in lawsuit abuse.
This week, during an event in Jackson, congratulations will be passed around to Barbour, his allies in the Legislature and those from the business and medical communities on the 10th anniversary of the reforms’ enactment. This collaboration, despite the heavy influence of plaintiffs’ lawyers at the Capitol, put brakes on a tort system that had earned Mississippi the unflattering reputation as a “judicial hellhole.”
Before those sweeping civil justice reforms were enacted, Mississippi was a magnet for lawsuits, most of which were filed in a handful of counties where juries could be counted on to sock it to wealthy defendants with outrageous damage awards.
It wasn’t so much that there were a huge number of outlandish verdicts. But the threat of them petrified the insurance companies, compelling them to settle no matter how meritless — and sometimes fraudulent — the claims might be. It became a feeding frenzy, with plaintiffs’ lawyers ginning out lawsuits like they were operating a printing press, certain that many of the filings would extort a quick settlement offer from an insurer.
The result, besides making some lawyers mighty wealthy, was that insurance premiums soared, especially for physicians. For some higher-risk medical specialities, coverage at any price was hard to find. In some smaller communities, there were no doctors left willing to deliver a baby. Surgeons scaled back their practices to reduce their legal exposure.
It was a bad situation.
The 2004 reforms made several dramatic changes. The one talked about the most is the capping of noneconomic damages — those nebulous “pain and suffering” claims for which sympathetic juries could be manipulated to throw all reason out the door.
The 2004 Tort Reform Act set a $500,000 limit for noneconomic damages on medical malpractice claims and $1 million on all other civil cases. Those limits have been challenged as unconstitutional, but so far they’ve stood up in the courts. What the caps did, besides stop runaway verdicts, is bring some certainty to the process. Actuaries could better calculate the insurance companies’ maximum exposure, and thus be more precise on setting premiums.
Almost as soon as those caps were put into place, premiums began to come down. Malpractice insurance for a typical doctor, which had jumped from $4,000 annually in 1999 to $10,000 in 2004, came back down over the next five years to $4,000 and is even less now.
Just as significant is the end the legislation put to venue shopping and disproportionately awarding damages. A favorite ploy of trial lawyers before the 2004 reforms was to hunt out plaintiffs in those counties where the attorneys knew their cases would be in front of friendly judges and jury pools. They’d also lump deep-pocketed peripheral defendants into the lawsuit in hopes that these defendants could be forced to pay damages far in excess of their culpability.
Once these abuses were curbed, plaintiffs’ lawyers had to start thinking twice about the cases they took on. They could no longer be certain of easy-money settlements from insurers afraid to take their chances in court.
As a result, the number of damage suits filed has dropped precipitously — from 10,600 in 2002 to 3,500 in 2012, The Clarion-Ledger of Jackson reported last week. That’s a drop of two-thirds, showing just how out-of-balance the litigation landscape had become.
In all honesty, Barbour also had a political motivation for pushing for further tort reforms than his predecessor, Democrat Ronnie Musgrove, had initiated two years earlier. The drop in lawsuits has dried up a lot of the money that had been flowing to Democratic candidates. Plaintiffs’ lawyers were some of the Democrats’ biggest financial backers. While the reforms brought balance to the courtroom, they imbalanced the state’s political landscape, helping to further propel the GOP to its current dominance.
It was, all things considered, a worthwhile tradeoff.
