University of Virginia law professor Jeffrey O'Connell and Michael Horowitz of the Hudson Institute have assembled a tort reform proposal that would eliminate these perverse incentives and result in tremendous economic savings for all Americans.

The "auto-choice" reform would make available $40 billion in savings on auto insurance premiums. Individuals could save $31.7 billion and businesses could save $8.3 billion in 1996 premiums. For the typical car insurance premium, this would translate into average savings of $221. In high insurance states, such as New Jersey, the savings would average $395 per premium.

Low-income drivers would particularly benefit, since the auto-choice reform is highly progressive. While the average driver would save 28.6 percent, low-income drivers would save 44.9 percent on their premiums. Moreover, the savings from auto-choice would be enough to offset 61.7 percent of the average tax burden of the poorest fifth of American families.

The contingency fee reform (co-authored by Professor Lester Brickman of the Cardozo Law School) would significantly reduce the total estimated cost of attorney fees of $45 billion each year. Payments to plaintiffs attorneys would reflect the value they add to their client's settlement.