An executive of the Property Casualty Insurers Association of America (PCI) stressed that reform of the civil justice system is a priority for the insurance industry and should be for consumers across the nation.
Rita Nowak. PCI assistant vice president, commercial lines, participated as a panelist in a two-day “Access to Justice Symposium,” sponsored by Loyola Law School in Los Angeles. Renowned legal scholars, business leaders, journalists, practitioners and insurance experts discussed current issues such as the need for caps on non-economic damages as well as the crisis in medical liability insurance. Nowak was part of the roundtable that discussed “Damage Awards in Personal Injury Litigation.”
“A shocking statistic is that one of every 11 obstetricians nationwide have stopped delivering babies because of the cost of medical liability insurance,” said Nowak. “Unpredictable and excessive verdicts on non-economic damage awards, particularly in personal injury litigation, have driven up losses that eventually increase liability premiums as well as the cost of a host of consumer goods and services for everyone. Major reform of the justice system, particularly in the area of non-economic damages, must be a priority for all states and for Congress.”
The panelists also said that asbestos litigation was another area of great concern.
“Sixty-one companies have filed for bankruptcy due to asbestos litigation. These companies are spread across the nation with 47 states having at least one asbestos-related bankruptcy,” Nowak said. “The costs of these bankruptcies impact the workers and the economy.
Nowak added that since 1998, 35 companies have filed for bankruptcy protection because of asbestos-related claims, compared to only 26 failed companies over the previous 20 years.”
According to Nowak, abusive legislation forces every man, woman and child in the U.S. to pay a hidden “tort tax.” A Tillinghast-Towers Perrin report said that in 2002 the tort system cost each man, woman and child $809 annually which is quite a jump from1950, when the U.S. judicial tort system cost each citizen only $12 per year, Nowak said.
According to Nowak and PCI, reform is needed across the judicial system and caps for non-economic damages would be a first step in the overall reform effort.
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