(FORTUNE Small Business) – With a President hospitable to the idea and the current crisis in medical-malpractice insurance getting front-page coverage, tort reformers are enjoying a resurrection to rival Ozzy Osbourne's. More than 25 states have enacted laws that cap damages in medical-liability cases, and similar legislation is now before Congress. "In Florida and Mississippi, where there are no caps, obstetricians are stopping delivering babies, [and] trauma centers are closing down," says Sherman Joyce, president of the American Tort Reform Association. By getting medical-malpractice reform first, Joyce hopes to make a case for more general tort reform, as the situation is largely the same. "Health care is the most visible area, but we'll see other areas for reform as well," he says.

With a President hospitable to the idea and the current crisis in medical-malpractice insurance getting front-page coverage, tort reformers are enjoying a resurrection to rival Ozzy Osbourne's. More than 25 states have enacted laws that cap damages in medical-liability cases, and similar legislation is now before Congress. "In Florida and Mississippi, where there are no caps, obstetricians are stopping delivering babies, [and] trauma centers are closing down," says Sherman Joyce, president of the American Tort Reform Association. By getting medical-malpractice reform first, Joyce hopes to make a case for more general tort reform, as the situation is largely the same. "Health care is the most visible area, but we'll see other areas for reform as well," he says. In all cases, the centerpiece reform is a cap on so-called noneconomic damages, the pain-and-suffering awards that don't redress lost wages or medical expenses but fuzzier areas, like the value of a limb or an eye. Sympathetic juries often run these damages into the millions. The federal legislation now pending would cap them at $250,000. "A good lawyer can quantify almost anything and make it an economic loss that the cap doesn't cover," says Joyce, explaining why trial lawyer complaints about the cap are overblown. "This is not limiting medical or rehabilitation costs. It's limiting unquantifiable losses." Joyce concedes that caps can be a "tough call" in certain cases, particularly the loss of fertility or movement, "but on balance, you have to look at the big picture." If liability is limited, the argument goes, insurance rates stabilize or, ideally, decrease, and that makes the doctor--or small business person--able to provide a needed service. The Congressional Budget Office has estimated that the HEALTH Act would ultimately lower premiums 25% to 30%.

Making punitive damages harder to get is another key legislative aim. "The idea is that if there is real negligence, you'll get damages, even if the burden of proof is higher," says Brad Close, manager of legislative affairs for the National Federation of Independent Business. Again the goal is to rein in subjective damages in order to keep insurance rates down and businesses open. The NFIB, which has supported ill-fated legislation that capped damages for businesses with fewer than 25 employees, is cautiously optimistic about the future of similar bills. "A lot depends on the medical-malpractice bill," Close says. "If it passes, that's a significant step." The first, he and Joyce hope, of many.