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Removing tort protections a dangerous game

A year ago, during the Democratic primaries, all the candidates debated tort reform without once letting that phrase pass their lips.

They talked instead about “Medicare for All.” But if Medicare for All were enacted, it would profoundly change the tort system.

Health care in America can be staggeringly expensive, as anyone who’s ever received a hospital bill for even routine day surgery can attest. Some among us are compelled to spend weeks in the hospital or face a lifetime of ongoing treatment as a result of someone else’s negligence. For anyone that unlucky, medical bills can add a second life-altering disaster to the first.

This artwork by M. Ryder relates to the broken healthcare system in the U.S.

If health care were to become free at the point of service, which is how Sen. Bernie Sanders’ website describes Medicare for All, injured people wouldn’t need to sue to recover medical costs from the person responsible for their injury. The amount of money paid out by defendants and their insurance companies would be greatly reduced.

But that’s not how Medicare for All is promoted in progressive circles. And it’s not at all what conservatives such as Senate Minority Leader Mitch McConnell mean when they talk about tort reform.

A much different version of tort reform was enacted in New York last year, passed by the Democratic-controlled Legislature and signed into law by Democratic Gov. Andrew Cuomo.

The bill was enacted in April, as residents of New York City isolated in their apartments, listening to the eerie echo of ambulance sirens in empty streets. It granted nursing homes broad immunity from tort liability for their negligent acts.

A nursing home has a legal duty to ensure the safety of its residents. In normal times, it can be sued for negligence if it fails to discharge that duty, such as by failing to take reasonable steps to prevent a foreseeable injury.

In its current form, the New York law, which expires at the end of the COVID-19 emergency, gives nursing homes total immunity for most harms resulting from their response to COVID-19.

New York nursing homes can be sued for COVID-related harm only if their acts or omissions constitute “willful or intentional criminal misconduct, gross negligence, reckless misconduct, or intentional infliction of harm.” Gross negligence, as used in New York law, means “intentional wrongdoing or … a reckless indifference to the rights of others.”

The statute puts a stop to all lawsuits except those alleging the most outlandish misconduct.

It’s natural to think of tort law in terms of the dramatic confrontation between plaintiff and defendant. But in one sense lawsuits occur only when the system breaks down. Ideally, the mere threat of being found negligent would inspire companies to be non-negligent.

For example, a non-negligent nursing home in 2019, foreseeing the possibility of a future outbreak of infectious disease, would have hired adequate staff and trained them properly while stockpiling PPE. It would have swung into action with effective containment measures at the first sign of spreading disease.

The statute gives legal protection to nursing homes that didn’t do those things.

In 1970, the economist Milton Friedman published an essay in the New York Times Magazine titled “The Social Responsibility of Business is to Increase its Profits.” The essay concluded: “there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”

If Friedman’s doctrine is taken seriously, it means the only social responsibility of nursing home administrators in New York is to avoid spending money to provide their patients with care above the legal minimum. There’s reason to believe nursing home operators heeded Friedman’s counsel.

New York state contains 5.9% of the nation’s population. But it’s been the locale of 8.3% of all nursing home COVID-19 deaths, according to the Covid Tracking Project.

Doubtless many factors contributed to the excess deaths, including Cuomo’s mismanagement. Doubtless other factors, such as the state’s world-class medical facilities, kept the total from being worse.

But it’s reasonable to wonder if one factor contributing to the total burden of disease was the rational, profit-maximizing way New York nursing homes adapted to the change in the law.

Tort law is a wildly inefficient mechanism for compensating people injured by other people’s negligence. It overcompensates a few while leaving many more out in the cold. Vast sums of money are siphoned off by intermediaries.

But it gives companies a financial incentive to take reasonable steps to avoid causing harm to others. We remove that incentive at our peril.

Joel Jacobsen is an author who in 2015 retired from a 29-year legal career. If there are topics you would like to see covered in future columns, please write him at legal.column.tips@gmail.com”>href=”http://legal.column.tip”>legal.column.tips@gmail.com.

 

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