This essay discusses unlimited insurance subrogation (UIS) as a means of improving the deterrence and compensation results of medical malpractice law. Under UIS, health care insureds could assign their entire potential medical malpractice claims to their first-party commercial and government insurers. UIS should improve deterrence by establishing first-party insurers as plaintiffs to confront liability insurers on the defense side, leading to more effective prosecution of meritorious claims and reducing meritless and unnecessary litigation. UIS should improve compensation outcomes by converting litigation (...) cost- and risk- laden “tort insurance” into cheaper and enhanced first-party insurance. UIS also promises dynamic benefits through further reforms by contract between the first-party and liability insurers that would take charge of system. No UIS-related costs are apparent that would outweigh these benefits. (shrink)

The general consensus is that reform of medical malpractice law should be part of the health care system's overhaul. Medical malpractice litigation results in the expenditure of tens of billions annually, largely paid out of health care insurance funds and mostly paid to defendants' and plaintiffs' lawyers. By all accounts, this tort law regime ill serves the basic deterrence and compensation goals of civil liability. The causes and magnitude of these failings are disputed, and many typical reform proposals sidestep the (...) basic problems and may do more harm than good. In contrast, we advance a straightforward way to improve both deterrence and compensation. Essentially, the proposal is to remove current legal limitations on the scope of insurance subrogation that bar private and public health care insurers from “buying” the whole of their insureds' potential medical malpractice claims in exchange for lower premiums and taxes and expanded insurance coverage. Our proposal’s benefits accrue regardless of the cause and magnitude of the failings of malpractice law or the further reforms that might be adopted. (shrink)

To achieve more cost-effective deterrence of unreasonable risktaking through civil liability, I propose and demonstrate previously unrecognized benefits of using simple random sampling to resolve multiple claims against a business or government defendant in the aggregate. I show that counter to intuition and prevailing assumptions and practice, simple sampling will enhance, not compromise, deterrent results regardless of the number of claims and the variety and significance of differences among them. Indeed, it can be used to resolve multiple claims that bear (...) no resemblance to one another except for targeting the same defendant. The proposal can thus be employed to increase the efficiency of resolving relatively similar claims in class and consolidated actions and, by extending the application of such collectivizing processes, lower the cost of resolving all other claims that would be adjudicated as separate actions. I close by sketching a design for a reformed civil liability system that fully integrates and exploits the law enforcement benefits of sampling to better achieve the primary social objectives of accident risk deterrence and insurance. (shrink)