Table of Contents

Research Handbook on the Economics of Torts

Research Handbook on the Economics of Torts

Research Handbooks in Law and Economics series

Edited by Jennifer H. Arlen

This pioneering Handbook contains specially-commissioned chapters on tort law from leading experts in the field. This volume evaluates issues of vital importance to those seeking to understand and reform the tort law and the litigation process, taking a multi-disciplinary approach, including theoretical economic analysis, empirical analysis, socio-economic analysis, and behavioral analysis. Topics discussed include products liability, medical malpractice, causation, proximate cause, joint and several liability, class actions, mass torts, vicarious liability, settlement, damage rules, juries, tort reform, and potential alternatives to the tort system. Scholars, students, legal practitioners, regulators, and judges with an interest in tort law, litigation, damages, and reform will find this seminal Handbook an invaluable addition to their libraries.

Chapter 21: Do damages caps reduce medical malpractice insurance premiums? A systematic review of estimates and the methods used to produce them

Kathryn Zeiler and Lorian Hardcastle

Subjects: economics and finance, law and economics, law - academic, law and economics, law of obligations

Extract

The medical malpractice liability system is designed to compensate victims of medical malpractice both for economic damages and non-economic damages, such as pain and suffering, and loss of consortium. A second major function of the system is to provide incentives for health care professionals to provide reasonable care. By internalizing the cost of patients’ injuries to physicians, the hope is that the threat of malpractice liability will encourage physicians to provide care that will reduce the likelihood of iatrogenic injuries. Most providers purchase malpractice insurance to protect themselves against the risk of claims. Over the last several decades, insurance prices have fluctuated wildly, and the liability system, and large damage awards in particular, is most often pointed to as the culprit. The U.S. has faced three distinct medical malpractice insurance crises since the mid 1970s. These crises are characterized by sharp increases in premiums followed by market exit of some insurers, which reduces supply, putting additional upward pressure on prices.

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