What is a Litigation Reform Act?

A litigation reform act is a law that imposes rule changes to the process of civil litigation. Most proposals for litigation reform are made with the intention of limiting the monetary damages that are imposed on defendants found to be liable in a civil action and preventing frivolous claims from reaching the court. The most common suggestion is a direct cap on certain kinds of damages that do not reflect an actual dollar amount lost by the plaintiff due to the actions of the liable defendant. Another popular suggestion is for panels to review potential cases prior to allowing them to reach the court. Additionally, some litigation reform advocates have proposed a litigation reform act that would reduce many of the statutes of limitations on certain claims.

Perhaps the most common suggestion for a litigation reform act is one that limits non-economic damages suffered by the plaintiff. For example, a plaintiff who sues a company because he or she was harmed by a dangerous product produced by the company may seek damages beyond those he or she actually lost due to the harm suffered. These damages, called non-economic damages, include various classes of compensation such as punitive damages and pain and suffering.

Punitive damages are levied on the defendant purely as punishment for particularly egregious behavior, and is typically only imposed on corporations. Pain and suffering is compensation paid to the plaintiff for the disruption in his or her life suffered because of the harm. A litigation reform act may impose a hard cap on the amount of these non-economic damages that can be awarded to a successful plaintiff.

Another potential aspect of a litigation reform act is a panel that reviews particular types of claims and would either allow or disallow those claims to go to court. These panels are mostly suggested for claims related to very specialized industries that require special knowledge to understand the true nature of the claim, such as claims for legal malpractice. In that particular example, a legal malpractice board would review all legal malpractice claims to determine whether or not they are frivolous before allowing them to proceed to the courts.

Statutes of limitations are time limits on the length of time that may pass between a harmful act and the filing of a lawsuit. After the statutory time period elapses, then the harmed person is not allowed to sue for the harm he or she suffered. The actual length of such a time limit depends on the jurisdiction as well as the type of claim, though most claims must be brought within three years of the harm suffered. A litigation reform act may reduce these statutes of limitations, lessening the time frame in which a plaintiff may bring a lawsuit, and presumptively lowering the number of lawsuits.