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Tort Reform and Insurance Markets
Author(s) -
Viscusi W. Kip
Publication year - 2004
Publication title -
risk management and insurance review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.386
H-Index - 16
eISSN - 1540-6296
pISSN - 1098-1616
DOI - 10.1111/j.1098-1616.2004.00033.x
Subject(s) - punitive damages , damages , tort reform , tort , jury , supreme court , legislature , misconduct , context (archaeology) , business , economics , imperfect , actuarial science , law , political science , finance , liability , linguistics , philosophy , paleontology , biology
Proposed tort reforms have focused on punitive damages and noneconomic damages, each of which pose problems for jury decision making. The U.S. Supreme Court decision in State Farm v. Campbell will greatly limit very large punitive damages awards, and will affect smaller punitive awards to a lesser degree. Noneconomic damages caps enacted by state legislatures have greatly enhanced insurance market performance. Insurers operate within the context of a highly imperfect, regulated market in which there is substantial price rigidity induced by regulation. Reform efforts should strive to establish greater predictability and stability in these awards components rather than simply being concerned with imposing specific numerical caps.