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Do we need tort reform for auto safety?

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CarInsurance.com

Do we need tort reform for auto safety?

Europe has significant safety features for automobiles that are either standard or optional equipment for their vehicles. These features have not been introduced here in the US. Why?

Could a lack of tort reform be the culprit? It boggles the mind. This was a topic of discussion at an April 21, 2004, meeting of Advocates for Auto and Highway Safety.

What is tort reform and why does it affect car insurance? Tort reform is used by its advocates to describe a change in the United States civil justice system that will limit tort litigation and damages. By doing so, it will reduce litigation's adverse effects on the economy.

Michael Sanders is the global director for automotive safety for DuPont Performance Materials. Some of the new technologically advanced safety features he told the board about were side curtain airbags, laminated glass, radar-based rear obstacle detection, rear view camera systems, anti-trap technology for windows, an advanced rear seat belt reminder, and pretension seatbelts. Many of these features are standard or optional equipment in Europe. The significance of this is that the market penetration of these features in Europe is deep while they have had relatively no impression here at home.

What is keeping these potentially important safety features out of the grasp of American drivers? You may be surprised to learn that the group believes our litigious society, the contingency fee system, and our court system are reasons such safety equipment is not available in the US and why most of the suppliers are in Europe. What can be done to solve the problem? Unfortunately, it will require more regulation. This seems to be a never-ending spiral of deeper and deeper red tape in order to simplify and safeguard our driving risks. An example of this is to have carefully drawn regulatory standards so that consumers cannot sue auto companies for failure to use such equipment in the past. The group felt that availability of such equipment as standard equipment (OEM) on U.S. cars is probably dependent on tort reform.

We may see a change in this arena.

The U.S. Class Action Fairness Act of 2005 shifts many large class-action lawsuits involving parties from state to federal courts. This may or may not be a good thing. Erasing the needless burden of state litigation with more bureaucratic federal litigation may subvert the constitution's intent. This Act removes many class action lawsuits from the jurisdiction of state courts. Business groups had lobbied for the legislation, arguing that class-action lawsuits enriched trial lawyers.

The Act accomplished two key goals of tort reform advocates:

  1. Reduces the likelihood that out-of-state defendants will be subject to what proponents deem are excessive verdicts, by reducing settlements that may occur in plaintiff-friendly local venues.
  2. Enacts procedures for the review of coupon settlements, to reduce attorney's fees that are deemed "excessive" relative to the benefits actually afforded class members.

The Act gives federal courts sole jurisdiction to certain class actions in which the amount in controversy exceeds $5 million, and in which any of the members of a class of plaintiffs is a citizen of a state different from any defendant, unless at least two-thirds or more of the members of all proposed plaintiff classes in the aggregate and the primary defendants are citizens of the state in which the action was originally filed.

We will see if it leads to safer cars and lower insurance rates.

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