Large damages awards in tort litigation have to be paid by someone. If the defendant is insured, then insurance companies foot the bill. Ultimately, though, high insurance rates are passed on to consumers of goods and services in the United States. Consequently, tort reform that reduces the size and number of damages awards ultimately will mean lower costs of goods and services to consumers. The downside of these lower costs, though, might be higher risks of medical malpractice and dangerous products.

1.

Do you believe that this trade-off is real? Why, or why not?

2. Considering that punitive damages are intended in part to punish, should a defendants financial situation be taken into account in setting the amount?