A litigation reform act aims to limit damages imposed on defendants and prevent frivolous claims. Suggestions include limiting non-economic damages, panels to review claims, and shortening statute of limitations.
A litigation reform act is a law that mandates changes to the rules of the civil litigation process. Most litigation reform proposals are designed to limit the pecuniary damages that are imposed on defendants found liable in a civil action and to prevent frivolous claims from reaching the court. The most common suggestion is a direct limit on certain types 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 before allowing them to reach the court. In addition, some litigation reform advocates have proposed a Litigation Reform Act that would shorten many of the statute of limitations on certain claims.
Perhaps the most common suggestion for a litigation reform act is one that limits the non-economic damages suffered by the plaintiff. For example, a plaintiff who sues a company because he was harmed by a dangerous product manufactured by the company may seek damages in excess of what he actually lost as a result of 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 conduct and are typically only imposed on corporations. The pain and suffering is the compensation paid to the plaintiff for the disruption in his life suffered as a result of the damage. A litigation reform act may impose a hard cap on the amount of these non-economic damages that can be awarded to a winning plaintiff.
Another potential aspect of a litigation reform act is a panel that looks at particular types of claims and would allow or disallow those claims to go to court. These panels are mainly suggested for complaints relating to very specialized industries that require special knowledge to understand the true nature of the complaint, such as malpractice complaints. In that particular example, a malpractice board would review all malpractice claims to determine whether or not they are frivolous before allowing them to proceed to the courts.
Statute of limitations are time limits on the length of time that can elapse between a harmful act and the filing of a legal action. After the statutory period of time has elapsed, the injured person is not entitled to sue for the damage he has suffered. The actual length of this period depends on the jurisdiction and the type of claim, although most claims must be filed within three years of the damage suffered. A litigation reform act can shorten these statute of limitations, decreasing the amount of time a plaintiff can file a lawsuit and presumably lowering the number of lawsuits.
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