The medical malpractice system in the United States has a poor track record and imposes heavy social costs—up to $2,500 per household, including defensive medicine. In a recent blog post, I proposed a voluntary, contractual, no-fault alternative to the current system.

Here, I name some of the principles that should guide tort reform. 

Principle #1: Victims of torts should be fully compensated—no more, and no less.

Principle #2: Those who commit torts should pay the full cost of their harmful acts—no more, no less.

Principle #3: Whenever possible, damages should be determined in the marketplace (e.g., the market price to repair the damage).

Principle #4: Structured awards are generally preferable to lump sum awards.

Principle #5: Parties should always be free to alter by contract a court- determined award.

Principle #6: Reasonable limits should be set on damages for pain and suffering, subject to market-based rebuttable evidence.

Principle #7: Punitive damages are justified only if there are social costs over and above the victim’s private costs.

Principle #8: Contingency fees should be paid entirely by the defen- dants, with meritorious exceptions.

Principle #9: Attorney’s fees should be awarded in cases of bad faith.

Principle #10: The first nine principles do not apply to settlements.

Source: Priceless: Curing the Healthcare Crisis, by John C. Goodman (Oakland, Calif.: The Independent Institute), p. 191.

Recent Posts in Curing the Healthcare Crisis

Why Did Health Spending Slow Down Before It Sped Up?

HSA/high-deductible plans have helped tame healthcare spending.

What Are the Financial Risks of Being Uninsured?

They're probably smaller than you think.

Obamacare's Cost Is Down 8%, but That May Not Be Good News

The CBO says the healthcare reform is looks more like Medicaid than intended.

Why Is Obamacare a Rube Goldberg Contraption?

The president erred by letting special interests control healthcare reform.

Can Obamacare Be Fixed? Part II

Four changes to the ACA would greatly improve the healthcare choices we make.

Can Obamacare Be Fixed?

Four changes to the healthcare law would undo a lot of damage.