South Carolina U.S. Senator Lindsey Graham and republican Senate colleague Saxby Chambliss of Georgia have introduced their ‘Loser Pays’ legislation as an amendment to the health care bill. The senators says the amendment would decrease the number of frivolous lawsuits that increase the cost of medical care for all Americans.

The Graham-Chambliss ‘Loser Pays’ amendment would create a system of preliminary, non-binding arbitration for medical malpractice claims before they ever enter a courtroom. If one or both of the parties involved rejects the arbitrator’s decision, they can take the claim to court but are then subject to the ‘Loser Pays’ rule. Additionally, states will have the option to create their own alternative dispute resolution system, with the freedom to tailor procedures as they see fit. The proposed non-binding arbitration for medical malpractice claims would involve defendants who take Medicare patients as at least 25 percent of their total patient inventory.

According to Graham, “Reform of medical malpractice is one of the key, missing ingredients from the health care reform proposals being debated in Congress. “A ‘Loser Pays’ system is one of the best devices available to prevent frivolous lawsuits from costing all of us. When both parties in a lawsuit are subject to financial penalty, people think longer and harder about bringing a questionable case forward. Most western nations already have a ‘Loser Pays’ rule, and it is time our own country adopts this concept.”

Tort costs have grown more quickly than the rest of the economy, at an average annual rate of 9.2 percent between 1951 and 2006. The direct cost of tort litigation in the United States was $247 billion in 2006 or $825 per person.