[EDITORIALS]Tread lightly with tort reform

The U.S. Senate recently approved a revised bill, that would limit excessive class-action lawsuits filed in the federal court system, by an overwhelming margin. A majority in the U.S. House of Representatives has also approved this bill, and it seems likely President Bush will sign the bill into law.
This bill is the first “masterpiece” of tort reform that President Bush vowed to make a top priority in his second term. The reason that the Bush administration is leading and the U.S. Congress is readily giving its support to this reform is because the existing tort system has long been thought to be ineffective and put a heavy toll on businesses. In the United States ― the “paradise of lawsuits” ― the tort system has long been criticized as being a heavy burden for shareholders and consumers, while helping no one but lawyers get rich. While the reasons given for its justification might seem right, the tort system is doing more harm than good by hindering businesses.
The more internationally and domestically famous a company, and the more cash it possesses, the more likely it will become a target of class-action lawsuits. This is a classic negative side effect of the tort system.
The only countries currently implementing a tort system are the United States, Britain, Australia and Canada. The United States is the only country where class-action lawsuits are filed with frequency. Now it looks like even the United States will be restricting the tort system because of its negative effects.
Korea has started enforcing tort jurisdictions this year without providing any safeguards to protect the companies. All the while, businesses have been requesting the government postpone the enforcement of these jurisdictions or provide supplementary measures to the system to no avail. The government even turned down the companies’ request that they be granted three years’ grace from any class-action lawsuits. Although the government and ruling party initially agreed to suspend for two years class-action lawsuits against bad accounting, the agreement was turned down twice after opposition from a group of lawmakers.
The governing and opposition party legislators in the Legislation and Judiciary Committee agreed earlier this month to reform the class-action jurisdictions. It remains to be seen whether this promise will be kept. Legislators should reconsider if we really need a tort system.