Legal Reform

Legal reform today in America is critical, and critical for economic reform. Our free market economy cannot be sustained without ensuring full guarantees of private property and transparent predictability for entrepreneurship. Legal reform should be an integral part of any state government reform agenda.

In 2009, American’s legal system cost $248.1 billion, or roughly $808 per person. This statistic makes America’s civil justice system the most expensive in the industrialized world. Forecasts also expect higher levels of tort cost growth for 2011, given that growth in legal costs also generally increases with inflation and are directly tied to government spending as well.

The tactics used by aggressive personal injury lawyers cause many companies to settle questionable lawsuits just to stay out of court. They use the media to sensationalize these issues and often plaintiffs can be awarded multi-million dollar punitive damage awards, another reason companies often settle out of court. Lawsuits like this are bad for business and bad for society as one can easily see from the rising cost of our legal system.

Reform must take place on multiple fronts in order to address this serious legal issue. Health care liability reform, class action reform, and punitive damage limitations are among the issues the SGLF believes need to be addressed. Regulation through litigation must be addressed as well. It is crucial that state leaders step up and reform the system at the state level.

Additional Resources


American Tort Reform Association
Studies Towers Perrin, 2009 Update on U.S. Tort Cost Trends
Creating Conditions for Economic Growth: The Role of the Legal Environment
The Federalist Society
Institute for Legal Reform
101 Ways to Improve State Legal Systems

A reformed tort system will also ensure that the United States remains competitive on a global scale. Businesses must do what is in their best interests, and the high costs of the U.S. judicial system do not bode well for them. A reformed, efficient legal system will also greatly benefit the residents of the United States, as it will not only encourage creativity and innovation, but will lower product costs, insurance premiums and taxes and increase employment across multiple sectors.

News & Articles

Alabama Voices » Kay Ivey: It's time to demand a balanced budget

Written by Lieutenant Governor Kay Ivey for The Montgomery Advertiser on April 03, 2014Legal Reform
The Alabama Legislature is completing another legislative session, having developed balanced budgets. Difficult decisions had to be made to reach that point, but just like your family’s finances, spending can’t exceed revenue — a common-sense practice seemingly lost on most in Washington, D.C. In Alabama, leaders are bound by the state Constitution to balance the state’s budget every year. It’s time the federal government followed our lead. That is why I recently pledged my support to Demand Balance Now, a national effort to amplify calls for a balanced budget amendment to the U.S. Constitution through a state-led, limited Article V convention. This historic initiative is being led by statehouses across the nation and is spearheaded nationally by the State Government Leadership Foundation. Now more than ever, states should hold the federal government accountable for out-of-control national spending. I hope you’ll join the call to end runaway federal spending and balance the budget by signing the pledge to Demand Balance Now: www.demandbalancenow.com.
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Michigan petitions Congress for federal balanced budget amendment, constitutional convention

Written by Jonathan Oosting for Michigan Live on March 26, 2014Legal Reform
LANSING, MI -- Michigan has joined more than 20 other states with active applications urging Congress to call a convention for the purposes of drafting a balanced budget amendment to the U.S. Constitution. The Michigan Senate on Wednesday signed off on the final draft of Joint Resolution V, approving House modifications in a 25-12 party-line vote roughly two months after Gov. Rick Snyder backed the push during his State of the State Address. Article V of the U.S. Constitution requires Congress to convene a convention of the states if 34 Legislatures petition it to do so. Any proposed amendment would have to be ratified by 38 states. The process has never been completed, and it's not clear what a convention would look like or who would set the rules. Still, supporters say states must act and force the federal government to stop spending more than it is taking in each year.
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Growing Chorus of State Lawmakers Call for Constitutional Convention to Force Fiscal Discipline in Washington

Written by Fred Lucas for The Blaze on March 20, 2014Legal Reform
Inaction in the face of a $17 trillion debt by the federal government has prompted lawmakers from 29 states to call for a constitutional convention to pass a balanced budget amendment. The list of lawmakers – all Republicans so far — includes state House speakers, Senate presidents and lieutenant governors, among others. Article 5 of the U.S. Constitution allows for a constitutional convention to be convened if two-thirds of the states call for one. If a convention approves an amendment, three-fourths of the states must vote to adopt it into the Constitution. Though this option has never been used for amending the Constitution, Tennessee House Speaker Beth Harwell expects enough states to sign on within the next two years to force a convention. Traveling the state, she said she finds that most citizens are frustrated and disillusioned with the federal government.
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Group wants to limit debt constitutionally

Written by Niki Kelly and Brian Francisco for The Journal Gazette on March 16, 2014Legal Reform
The State Government Leadership Foundation, the national organization that coordinates policy ideas with state-level leaders, unveiled a national initiative last week in support of the state-led effort to pass a balanced-budget amendment to the U.S. Constitution through a limited constitutional convention. “Families know that to balance household budgets, you don’t spend more than you have,” said Foundation Executive Director Matt Walter. “Make no mistake, our national debt is an immediate threat to our country and our children. “It’s time to take back control of our national bank account and Demand Balance Now! We must immediately halt the ballooning $17 trillion debt from Obama’s Washington that will cripple our economy for years to come.” He said states are leading on fiscal issues. Twenty-one states have passed legislation calling for a balanced-budget amendment that would be passed through a state-led constitutional convention. In addition, five more states have passed such legislation in one of their legislative chambers during their current legislative sessions.
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Mo. lawmakers will try to limit medical lawsuits

Written by The Associated Press for The News Tribune on December 16, 2013Legal Reform
JEFFERSON CITY, Mo. (AP) -- Missouri lawmakers plan to try again to limit how much money people can receive in medical malpractice lawsuits. Missouri House Speaker Tim Jones says the liability limits are a priority for the 2014 session. And Rep. Eric Burlison, of Springfield, already is promoting a bill. Republican lawmakers want to reinstate a $350,000 limit on noneconomic damages such as pain and suffering that was struck down by the Missouri Supreme Court in July 2012. The court said the limit violated a common-law right to seek damages for medical malpractice that predated the adoption of a state constitution in 1820. The proposed legislation would abolish that common-law right and instead make medical liability lawsuits subject to state law. A similar bill stalled earlier this year in the Senate.
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Companies find a new way to fight fraudulent lawsuits

Written by Tiger Joyce for Pittsburgh Post-Gazette on October 17, 2013Legal Reform
A federal judge in Wheeling, W.Va., last month stiffened the punishment for two prominent Pittsburgh personal injury lawyers and a discredited radiologist who, a jury found last December, had promulgated fraudulent asbestos lawsuits against CSX Transportation, the freight railroad company that employs nearly 1,000 Pennsylvanians and more than another 31,000 Americans. The federal Racketeer Influenced and Corrupt Organizations Act under which CSX brought its table-turning landmark lawsuit against the fraudsters allowed U.S. District Judge Frederick Stamp to triple the jury's original award for damages to nearly $1.3 million. Judge Stamp also may yet require former law partners Robert N. Peirce Jr. and Louis Raimond and creative X-ray reader Ray Harron to pay all or much of the $10 million CSX says it has spent on legal fees and court costs.

Meanwhile, smaller businesses and larger companies that are frequently targeted by meritless or fraudulent lawsuits have begun to look to CSX's aggressive RICO lawsuit as a new model for punishing those who audaciously perpetrate this kind of costly fraud on our courts. I say "costly" because every dollar companies spend defending themselves against bogus lawsuits is a dollar they will not spend creating jobs and investing in new technologies and growth opportunities. In addition to inflating prices for goods and services, as litigation costs are inevitably passed on to consumers, such lawsuits also clog court dockets, waste precious, taxpayer-provided court resources and delay court cases for those who have suffered real injuries.
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Oklahoma Legislature passes 25 lawsuit reform bills to end weeklong special session

Written by RANDY KREHBIEL & BARBARA HOBEROCK for Tulsa World on September 09, 2013Legal Reform
OKLAHOMA CITY - The House took some persuading, and even then the Republican leadership and the Fallin administration didn't get exactly what they wanted, but a sheaf of 25 lawsuit reform bills went through the final stage of adoption by the Oklahoma Legislature on Monday to bring a weeklong special session to an end. The bills are intended to replace a single, omnibus measure enacted in 2009 and declared unconstitutional by the state Supreme Court in June. Twenty-four of the 25 bills are intended to correct the 2009 law's violation of the state's single-subject rule. The 25th and most controversial deals with the so-called certificate of merit requirement, which the court has twice thrown out on other grounds. House Speaker T.W. Shannon had to come out on the House floor to rustle up the last few votes on that one, SB 1x, as 15 Republicans joined the 21 Democrats on the floor in voting no. Three other Republicans voted "constitutional privilege," and three more were absent, leaving Shannon the bare minimum 51 votes needed for passage.

He never did get the 68 votes needed for the emergency clause, a small victory for the Democratic minority that went through the special session kicking and screaming to the end. The emergency clauses on the last three bills through the House also failed, this time because too many Republicans had left and none of the remaining Democrats cared to bail out the majority. The failed emergency clauses were the only items on Gov. Mary Fallin's to-do list not to be checked. The 21 bills with emergency clauses will become law as soon as they are signed by Fallin. The four without won't become effective until 90 days after signing.
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Special Session Starts Today

Written by Michael Cross for KOSU on September 03, 2013Legal Reform
State lawmakers return to the capitol today for a Special Session to fix a Comprehensive Tort Reform bill declared unconstitutional by the Supreme Court in June. Justices ruled House Bill 1603 passed in 2009 and signed by then Governor Brad Henry contained too many subjects and thus constituted log rolling. The Governor and legislative leaders are hoping to get through as many as 30 bills passed over the next two weeks. While it’s been seven years since lawmakers called a special session, this one wasn’t much of a surprise to political science professor Keith Gaddie.

“If you look back at the history of what the Republican legislature has been doing, this is one of the hallmark pieces of legislation that the chamber and the business community have been pushing for. Hearing that it had been overturned by the Supreme Court you had to know a special session was going to follow.” The seven to two ruling came down from the State Supreme Court just a few days after lawmakers ended the regular session. Over the past two and a half months, Senate staffers worked tirelessly to create the individual bills needed to replace House Bill 1603. Also, state leaders needed to plan the perfect time when all of their lawmakers returned from their summer vacation. Gaddie says the sooner the better as timing becomes essential.
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10 years on, tort reform sees suits, payouts drop

Written by The Associated Press for The News Observer on September 01, 2013Legal Reform
AUSTIN, Texas — Ten years after the Texas Legislature capped damages in the state's medical malpractice lawsuits, the number of suits and the amounts paid out have fallen sharply. The Austin American Statesman reported (http://bit.ly/15rYYMk ) Sunday that state Department of Insurance data shows medical malpractice claims, including lawsuits, resolved in a year fell by nearly two-thirds between 2003 and 2011 to 450. The average payout declined 22 percent to about $199,000. Supporters of the "tort reform" law say doctors worry less about being sued and have seen their malpractice insurance premiums fall. Opponents counter that tort reform has barred many injured by doctors from going to court or relatives suing after losing a loved one due to medical malpractice. The law took effect Sept. 1, 2003, and limited damages for pain and suffering in most malpractice cases to $250,000. Texas is one of 31 states to cap damages, though there is no limit on economic damages like reimbursement for medical bills or lost wages.
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Oklahoma house speaker expects special session on tort reform to take up to 10 days

Published in The Associated Press on August 28, 2013Legal Reform
OKLAHOMA CITY — Oklahoma lawmakers will likely take up more than two dozen bills when they convene at the state Capitol next month for a special session dealing with tort legislation, according to House Speaker T.W. Shannon. Shannon, R-Lawton, said a rewrite of the state's tort system would require 26 to 28 bills. The Journal Record reported Sunday (http://bit.ly/17VUGja ) that Shannon told lawmakers in a memo last week there's no deadline for bill introduction, though all House bills will be read on Sept. 3, the first day of the session. He said he expects the session to last six to 10 days.

Gov. Mary Fallin called the special session to restore several laws overturned by the state Supreme Court that were designed to cut businesses' legal liability costs. It will be the first special legislative session since Fallin took office in 2011, and the governor wants lawmakers to limit the session to restoring the provisions of a bill adopted in 2009 that was designed to reduce the number of frivolous lawsuits and medical malpractice claims filed in Oklahoma. The high court threw out the legislation earlier this year, finding that it violated the single-subject rule in the Oklahoma Constitution and amounted to logrolling, or the passing of legislation that contains multiple subjects.
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Oklahoma Governor Calls Special Session on Lawsuit Reform

Published in The Insurance Journal on August 13, 2013Legal Reform
Oklahoma Governor Mary Fallin has called for a special session of the Oklahoma Legislature, to begin Sept. 3 for work on lawsuit reform. Gov. Mary Fallin’s executive order calls on lawmakers to re-institute components of House Bill 1603, a comprehensive lawsuit reform package signed into law in 2009. HB 1603 was designed to reduce the number of frivolous lawsuits and medical malpractice claims filed in Oklahoma, making the state more business friendly and protecting Oklahoma physicians from frivolous lawsuits. It was passed with bipartisan support and signed into law by Democratic Governor Brad Henry. Earlier this year, the law was struck down by the Oklahoma Supreme Court for violating the Constitution’s “single-subject” rule, a prohibition on legislative logrolling.

Fallin wants legislators to separate the law into appropriate bills, thus reinstating the policy without violating the single subject rule. Leaders of Oklahoma’s House and Senate encouraged Gov. Fallin to call  the special session to work on restoring the legislation, according to Associated Press reports. The 2009 legislation made a number of changes to how civil lawsuits are filed and litigated in the state, including redefining what constitutes a frivolous lawsuit and strengthening summary judgment rules that make it easier for a judge to dismiss a lawsuit that has no legal merit.
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Tort reform is good for Texas

Written by Richard W. Weekley for Houston Chronicle on August 05, 2013Legal Reform
Greg Abbott, Texas attorney general and gubernatorial candidate, has a personal story that is inspirational to Texans, regardless of their politics. At the age of 26, shortly after graduating from law school, Abbott was hit by a falling tree while jogging and was left paralyzed from the waist down. Abbott went on to serve with distinction as a Texas trial judge and as a member of the Texas Supreme Court. In 2012, he was elected to his third term as attorney general. If he is elected next year, he will be the first Texas governor to serve in a wheelchair. Unfortunately, Abbott's personal story, as inspiring as it is, frequently brings out politicized comments from a few personal injury trial lawyers and their sympathizers. Abbott sued and won a settlement in the tree-falling accident. Over the years, trial lawyers have suggested he is hypocritical and somehow didn't deserve the damage award because of his strong support for lawsuit reform.

Abbott has been outspoken in his support for the tort reforms that have reined in the lawsuit abuses that have plagued Texas. Abbott knows these reforms do not deny any Texan the right to access our courts for legal redress of wrongs or injuries like those he suffered. None of us knows, from one day to the next, when we may need to bring a lawsuit or defend ourselves against one. The goal of tort reform in Texas has always been to create and maintain a fair, honest and predictable civil justice system that balances the rights of both plaintiffs and defendants. Every lawsuit reform that has been passed in Texas, beginning in 1995, has assured those rights
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Florida Lawmakers Approve Medical Malpractice Reform

Written by Michael Adams for The Insurance Journal on May 20, 2013Legal Reform
In a victory for medical malpractice insurers and physicians, Florida lawmakers have approved a series of tort reforms that among other things will require expert witnesses testifying against physicians in a malpractice suit to be engaged in the same specialty.   The Florida House of Representatives by a 77-38 margin approved the legislation (SB 1792), which originated in the Senate Judiciary Committee. A priority of the Florida Medical Association, the Florida Chamber Coalition for Legal Reform and the Florida Justice Reform Institute, the bill addresses several areas of the law that proponents said expose physicians to legal action and contribute to higher medical malpractice costs.  

FMA General Counsel Jeff Scott said changes are needed so physicians can be assured they are granted adequate legal rights as they practice medicine. “It is important that we promote the highest standard of medical care our state has to offer by holding bad actors responsible for their actions,” he said in a statement.   The Florida Chamber praised lawmakers and the FMA on the bill’s passage. “We congratulate the FMA on this victory,” said David Hart, executive vice president of the Florida Chamber. “This bill aims to make Florida’s legal environment more friendly for physicians.”
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Lawmakers struggle with tort reform

Written by Rob Moritz for Arkansas News on April 15, 2013Legal Reform
LITTLE ROCK — The failure of tort reform measures to gain much traction among lawmakers this session will leave unresolved a legislative response to a state Supreme Court ruling that struck down part of a 2003 law meant to limit civil lawsuits and damage awards. Now some advocates for action to address the decree say they may have to depend on the high court itself for change.

In 2012, the the state Supreme Court struck down a provision of the 2003 tort reform law that limited who could testify as an expert witness in medical malpractice cases. The decision came on the heals of a 2011 ruling in which the court had stricken provisions in the law that capped punitive damage awards in civil cases. This year, champions of tort reform entered the regular session with the idea of putting in the state constitution parts of the state law that the high court said did not meet constitutional muster. But last week, a joint legislative committee considering proposed constitutional amendments to recommend for referral to the 2014 general election ballot passed over a pair of tort reform proposals.

Senate Joint Resolution 2 by Sen. Jeremy Hutchinson, R-Little Rock, would have required that a person who files a lawsuit deemed to be frivolous pay the other party’s attorney fees; that an expert witness in a medical malpractice lawsuit be trained in the same or similar discipline as the person on trial or have similar education and experience; and that an attorney who files a medical malpractice suit file a “certificate of good faith” stating that a medical expert is ready to testify that medical malpractice occurred.
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Florida physicians closer to medical malpractice reform

Written by Christine Jordan Sexton for South Florida Business Journal on April 04, 2013Legal Reform
The state’s leading physician association is one step closer to passing a medical malpractice bill after it was approved by the Senate Rules Committee on Tuesday. However, the victory came with a stinging rebuke from state Sen. David Simmons, who said the Florida Medical Association should be focusing on other issues more important to Florida doctors, including their future as independent businesses in an ever-changing health care delivery system.

Simmons said doctors in his district email him concerned that corporations are buying their practices. Instead of owning the physician practice, Simmons said, doctors will become employees. “The entire profession is at risk. It’s at risk of no longer being a profession,” said Simmons, who ultimately voted for the bill (SB-1792). “That’s what physicians ought to be dealing with their own future. They are drowning. They are literally drowning and getting ready to be destroyed as a profession within a few years and what we are doing is we are dealing with this; a side issue.”
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The risk of enforcing hospital staffing levels

Written by Tiger Joyce for The Washington Post on February 09, 2013Legal Reform
As drafted, D.C. Council Chairman Phil Mendelson’s well-intentioned “Patient Protection Act,” which would set specific nurse-to-patient ratios for hospitals operating in the city [“District to weigh boosting nurse staffs,” Metro, Feb. 5], invites presumably unintended consequences that could significantly increase health-care costs and decrease access to care.

Under the bill, hospitals in violation of staffing requirements will face civil penalties of up to $25,000 a day, regardless of whether any patient suffers a resulting injury. But it doesn’t limit civil enforcement to the D.C. attorney general. As a result, entrepreneurial personal-injury lawyers could file costly lawsuits, as they did in California three years ago. There, personal-injury lawyers won a jaw-dropping $677 million class-action verdict against an operator of 22 assisted-care facilities across the state, not to compensate any injured persons but simply because records showed occasional dips below mandated nurse-to-patient ratios.
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Arizona lawmaker works to cut down on medical malpractice suits

Written by Howard Fischer for The East Valley Tribune on February 05, 2013Legal Reform

A state legislator wants to impose some new requirements on judges and attorneys in his bid to cut down on medical malpractice lawsuits. The proposal by Rep. Bob Thorpe, R-Flagstaff, would bar lawyers from filing a medical malpractice lawsuit unless they were certified by the state Supreme Court as a "medical malpractice attorney.'' Thorpe's bill does not define what it would take to be certified, leaving the details up to the state's high court.

"The idea is to try to weed out the difference between good, legitimate attorneys that are practicing in the area of medical malpractice ... from the ambulance chasers,'' he said. Thorpe said he envisions the certification process as establishing minimum standards. But HB 2465 does not stop there. It also would allow these cases to be heard only by judges who also have been through special training on medical malpractice cases. Thorpe said the reasoning is the same. "Let's ensure that even a judge assigned to the case has a baseline understanding of the issue.''

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Tort reform package advances

Published in The VLW blog on February 05, 2013Legal Reform
As anticipated, the tort reform package was reported out of the House Courts of Justice full committee on Jan. 28, without further substantive discussion. Del. Dave Albo, R-Springfield, exercised the prerogative of the chair to reflect on the process that brought the bills this far.

The tort reform bills have been a “darn nightmare,” he said. “I’ve been here for 20 years, with everybody getting along, then all of a sudden,” people are finding things they don’t like, and starting to pick the system apart. The reform effort gained momentum this year, despite trial lawyers’ protests that Virginia’s highly regarded civil justice system is not hostile to business.
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Medical Malpractice Tort Reform Signed into Law in Michigan

Published in Insurance Journal on January 11, 2013Legal Reform
Tort reform advocates in Michigan, including medical malpractice insurer, The Doctors Company, lauded the recent signing of reform legislation in Michigan.

The Michigan State Medical Society, with significant support from The Doctors Company and its trade organization, the Michigan Insurance Coalition, initiated the legislation known as the “Patients First Reform Package.”
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Pence seeks tort reform in first year

Written by Tom LoBianco for Associated Press on January 10, 2013Legal Reform
Gov.-elect Mike Pence will include tort reform in a first-year legislative agenda that is slowly taking shape.

Pence has declined to release the details of his legislative agenda before he is sworn in Monday. But Sen. Mike Delph, R-Carmel, told The Associated Press on Thursday that he filed Pence's proposal to make losers in lawsuits pay all the legal fees.
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MO GOP To Bring Back Tort Reform In 2013

Published in Associated Press on January 05, 2013Legal Reform
Missouri lawmakers have their eyes on reinstating liability limits for medical malpractice cases after the state Supreme Court struck down an existing cap on damages last summer.

Republicans claim a supermajority when the Legislature meets Wednesday to start the 2013 session, and GOP leaders say restoring the liability limits invalidated by the high court is needed to control health care costs and help keep doctors in Missouri.
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Tort reform battle ahead for Assembly

Published in Virginia Lawyers Weekly on December 06, 2012Legal Reform
The Virginia Chamber of Commerce is out with its legislative wish list for the 2013 General Assembly and tort reform measures loom large on the Chamber agenda. The Chamber will continue efforts to change Virginia’s 40-year practice of barring depositions from summary judgment motions, an issue already aired in a July 18 hearing.

The chamber hopes to limit the ability of a plaintiff to take a nonsuit in the late stages of a lawsuit and expand the ability of the defense to collect attorneys’ fees and expenses when plaintiffs take such a voluntary dismissal of right. Current law “effectively allows plaintiffs to take a ‘do-over’ after the defendant has expended significant resources preparing for trial,” the Chamber’s statement says.
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Legal battle brews in TN over malpractice caps

Written by Bobby Allyn for The Tennessean on October 14, 2012Legal Reform
How much patients in Tennessee can recover for their pain and suffering could be significantly affected in the coming months if the state’s Supreme Court hears a challenge of a new law that limits medical malpractice awards.

The issue has taken on urgency as fungal meningitis victims start to craft medical malpractice lawsuits and attorneys weigh whether the suits will be filed in Tennessee or in Massachusetts, where injured patients can sue medical facilities for unlimited amounts of money for pain and suffering.
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Guest opinion: Legal reform needed for job creation, economic growth

Written by Webb Brown for Great Falls Tribune on October 07, 2012Legal Reform
I’ve got good news and bad news. First, the good news - in 2010, the U.S. Chamber of Commerce ranked Montana as the number one state for entrepreneurship in the country. Our hard-working, educated workforce, good quality of life, and can-do attitude make Montana a great place to set up a new business.

Now for the bad news. Just last month, the U.S. Chamber also ranked our state in the bottom ten for a good legal climate for small business. It’s a part of their 50-state study called “Lawsuit Climate 2012: Ranking the States.” What does it mean to be in the bottom ten? We may be a good place to start a business, but chances are that business is more likely to face frivolous lawsuits, costly legal bills and unpredictable court decisions.
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2 States Try to Tackle Medical Malpractice Reform

Written by David Levin for Governing.com on September 25, 2012Legal Reform
Medical malpractice is, it seems, a lot like the weather: You can complain about it, but you can’t do anything about it. Malpractice reform has vexed state legislative, health-care and legal communities for decades. But at least two states may actually be making some progress.

Massachusetts’ new health-care cost containment law -- signed by Gov. Deval Patrick in August -- includes malpractice guidelines, known as the "disclosure, apology and offer" approach. The law requires a 182-day cooling-off period between an adverse medical event and the formal filing of a lawsuit. The hope is that, during that time, patients, doctors and insurers -- and their attorneys, of course -- can settle a case before it goes to trial.
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