Furthermore, they claim that predicting losses is more difficult now than ever before, one reason being that claims are turning up long after the policy covering the period in question has expired. Tort reform may help some if the number of huge judgements can be reduced. More predictability in the judgements of the lawsuits would make it far easier for the insurance system to work properly. This is true for someone who is self-insured or for someone who buys commercial insurance. And since the self-insured are just as vulnerable to the uncertainties of the legal system as are the insurance companies, everyone has a stake in this issue.
Giant judgments create a continuing cost in the system through their intimidating nature.
Seventy-one plaintiffs won judgements of over one million dollars in 1984, while only three were awarded in 1975. The insurance adjustor is aware that once in a while there will be a huge award, and it may cause the company to offer more money than equity would demand or to overlook the defenses. When the adjustor is concerned about being involved in a huge claim, it creates a cross-purpose between the insured and the insurance companies. Evolution of the tort system that has occurred through case law and court decision rather than by legislation has brought about an environment that is chilling to adjustors because when bad things happen, they happen in very large numbers. The current tort system began under English common law as a peaceful way of resolving disputes between injured or aggrieved individuals and their accused.