Understanding Tort Reform: Strategic Actors, Public Policy, and Feedback Loops

This paper discusses the problems in the effective implementation of tort reform policy, focusing on several different areas that seek to review both the fundamental problems associated with punitive damages as well as the legal arguments in favor of tort reform. The limitations against the creation of a truly efficient system lie in the fact that strategic actors have the ability to anticipate the effects of reforms, and act to create feedback loops that diffuse the impact of the reform attempt. To implement effective tort reform policy one must understand how these strategic actors behave within the civil justice system, as well as how feedback loops limit the overall effectiveness of the tort reform policy. The findings suggest that the system of “decoupling†liability is the most efficient of all the current reform attempts or proposals, while the system can also be improved by adopting policies that isolate the incentive structures of plaintiff's attorneys.