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For decades, Tennessee has passed laws making it harder for injured people to sue — capping payouts, shortening deadlines, adding new hurdles. The pitch was always economic: less liability means lower insurance costs, more jobs, a stronger economy.
More than ten years later, insurance costs keep climbing anyway. So what happened to the savings?
Critics often describe personal injury lawsuits as pure waste — money spent on lawyers and courts to fight over something that already happened. There’s some truth to that: no lawsuit undoes an injury.
But here’s what that argument misses. The medical bills, lost wages, and lost productivity from an accident are real costs that exist whether or not anyone sues. A lawsuit doesn’t create those costs — it decides who pays them.
If an injured person can’t recover, the bill doesn’t disappear. It gets paid by the victim, their family, their health insurer, or taxpayers through programs like Medicare and Medicaid. Meanwhile, the company or person whose carelessness caused the harm pays nothing and has no reason to fix the problem.
Some of the most respected legal economists of the last century — Ronald Coase, Guido Calabresi, and Richard Posner among them — made a simple point: when the law makes the party who created a risk pay for the harm it causes, that party has a real incentive to prevent it. When the law lets them off the hook, it’s effectively subsidizing carelessness.
A trucking company can inspect its brakes and replace worn tires far more cheaply than thousands of drivers on the highway can protect themselves from a truck that hasn’t. A manufacturer can redesign a defective part more easily than consumers can spot a hidden flaw. A nursing home can prevent falls through better staffing and training far more effectively than residents can protect themselves.
In each case, the party best positioned to prevent the harm is the one being sued — not because it’s an easy target, but because it’s the one who can actually fix the problem. Holding that party accountable is what pushes companies to make safer products, safer trucks, and safer buildings.
Government agencies can’t inspect every truck or test every product. Lawsuits fill that gap. They force information about unsafe products and practices into the open, often uncovering problems regulators never caught.
Many safety features we take for granted — seatbelts, airbags, safer fuel systems, better tire design — improved over time through a mix of regulation, public pressure, and lawsuits working together. A single lawsuit over one injury has often led a company to fix a hazard before it hurts anyone else.
None of this means every lawsuit has merit, or that liability should have no limits. Litigation is expensive, and weak claims should be screened out. The goal isn’t more lawsuits — it’s making sure the people responsible for preventable harm bear the cost of it, rather than shifting that cost onto victims and taxpayers.
As self-driving cars, AI, and other new technologies spread, the people best positioned to catch and prevent problems are the companies designing and deploying them — not the individual using the product, who has no way to inspect the code or evaluate the safety systems inside. The same principle applies: whoever can prevent the harm should bear responsibility for it.
Cutting off people’s ability to sue doesn’t make accidents — or their costs — go away. It just decides that victims, families, and taxpayers should pay instead of the companies or individuals who caused the harm. That’s not really an economic win. It’s a cost shift, and it comes with a hidden price: less incentive for anyone to make things safer in the first place.
