Publix, Disney Leading Fight For Tort Reform

With two leading retailers—Publix and Disney—heading up the battle to limit money awarded for medical expenses in civil lawsuits, retailers will have their views well represented in this issue that impacts just about all major businesses. Olive Garden is also involved in the effort.

The idea is to try and reduce the dollars awarded in civil lawsuits. The concern has been that juries that see something they think is wrong see retailers as having tons of cash lying around, so a huge dollar award seems simple. The goal, according to The Orlando Sentinel, is to persuade state legislators in Florida to "rewrite the way medical damages are determined if a business is found responsible for an accident, whether a customer slips in the aisle of a grocery store or a tourist is hurt aboard a theme-park ride."

Publix alone spent more than $37 million last year defending itself against (or settling) civil lawsuits, the story said. "Inflated medical costs is one of the major cost drivers in tort litigation today," said William Large, president of the Florida Justice Reform Institute, a Tallahassee-based group (supported by both chains) that lobbies for limits on lawsuits.

Much of the fight involves the non-intuitive ways costs and expenses are presented to juries, costs that are either inflated or reduced depending on who is behind the calculator. For example, the jury is often given an amount the patient has been billed for medical, rather than figures that people either get or pay. Insurance will often sharply reduce how much the consumer pays out of pocket. On the other side of the ledger, insurance also pays medical practitioners a much lower amount than they officially bill.

Current procedures typically have the judge reviewing awards for medical costs and making appropriate reductions to align the figures with reality. But by presenting the much larger bills to the jury, those jurors tend to award much higher amounts for both reimbursement and for punitive amounts. (In retail pricing, this is called creating an anchor. If the conversation involves $11 million in medical costs, that's the number—or a multiple of that—where the jury focuses.)

Making this even more complicated is that litigants can sidestep the process, using a letter of protection. That's where a doctor agrees not to collect any payment from a patient until after litigation is concluded. "As a result, there are no actual charges that could be used to lower the jury's award," the story said.

For more:
- See Orlando Sentinel story

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