In an ideal world, malpractice would never happen. But it does; unfortunately, the standard therefor is too low to be realistic. Suing for malpractice shouldn't be a hope to win the lottery, but be reserved for genuine cases of malpractice - and that's what Cheney is saying. Limiting liability will decrease overall costs.
Edwards seems to be agreeing, but is he really? What's his standard for a frivolous case? He claims that a Kerry plan for tort reform would - by association, I'm not entirely sure - prevent inflation of medical costs? That seems to be a segue into socialized medicine, which is still a loser in American politics.
Cheney makes a good point about the multiplier effect of high liability insurance rates; how much more effective could an economy be not hobbled by multibillions of insurance for frivolous lawsuits?
Hah. Edwards is responding to Cheney's noting he took advantage of a $600,000 tax shelter for medicare costs by engaging in a typically Halliburton-flavoured tu quoque. He actually seemed a bit flustered there. That's sad; did he not expect it?