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Legal Remedies Commons

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Law and Economics

University of Pennsylvania Carey Law School

Insurance

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Everything’S Bigger In Texas: Except The Medmal Settlements, Tom Baker, Eric Helland, Jonathan Klick Jan 2016

Everything’S Bigger In Texas: Except The Medmal Settlements, Tom Baker, Eric Helland, Jonathan Klick

All Faculty Scholarship

Recent work using Texas closed claim data finds that physicians are rarely required to use personal assets in medical malpractice settlements even when plaintiffs secure judgments above the physician's insurance limits. In equilibrium, this should lead physicians to purchase less insurance. Qualitative research on the behavior of plaintiffs suggests that there is a norm under which plaintiffs agree not to pursue personal assets as long as defendants are not grossly underinsured. This norm operates as a soft constraint on physicians. All other things equal, while physicians want to lower their coverage, they do not want to violate the norm and …


Liability Insurance As Tort Regulation: Six Ways That Liability Insurance Shapes Tort Law In Action, Tom Baker Jan 2005

Liability Insurance As Tort Regulation: Six Ways That Liability Insurance Shapes Tort Law In Action, Tom Baker

All Faculty Scholarship

Leaving aside difficult to interpret doctrinal developments, such as the abrogation of traditional immunities, liability insurance has at least the following six impacts on tort law in action. First, for claims against all but the wealthiest individuals and organizations, liability insurance is a de facto element of tort liability. Second, liability insurance limits are a de facto cap on tort damages. Third, tort claims are shaped to match the available liability insurance, with the result that liability insurance policy exclusions become de facto limits on tort liability. Fourth, liability insurance makes lawsuits against ordinary individuals and small organizations into repeat …