One of the driving forces behind tort costs is insurance fraud and exaggeration. To gauge the extent to which claims of outright fraud are responsible for rapid increases in health and auto insurance premiums, the Federal Bureau of Investigation (FBI) began an investigation of staged automobile accidents. The results of this inquiry led FBI Director Louis Freeh to estimate that "[e]very American household is burdened with more than $200 annually in additional insurance premiums to make up for this type of fraud."[4]

      This report examines three reforms to the U.S. tort system now under consideration in Congress. One proposal is targeted at the automobile tort system, while the other two consist of general tort reform. The three reforms are:

Auto-Choice Reform

Early Offer: Contingency Fee Reform

Early Offer: Moore-Gephardt Reform

      Each of these reforms addresses a different aspect of the legal system and the problem of burdensome tort costs. Each establishes procedural mechanisms which have a relatively limited effect on existing state substantive tort law doctrines. In addition, under the terms of the proposed legislation now being drafted, states retain the right to opt out of any of the above reforms.